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Income Tax Act 2007
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Income Tax Act 2007
| Public Act | 2007 No 97 |
| Date of assent | 1 November 2007 |
Contents
BD 1 Income, exempt income, excluded income, nonresidents' foreign-sourced income, and assessable income
Exclusions for residential land
Exclusions for business premises
CD 33 Payments corresponding to notional distributions of producer boards and co-operative companies
Attributed repatriation calculation rules
Restrictive covenants and exit inducement payments
Matching rules: revenue account property, prepayments, and deferred payments
Avoidance and non-market transactions
Interest apportionment on thin capitalisation
Attributed controlled foreign company income
Foreign investment fund income
Transfers to or from superannuation funds and superannuation schemes
Treatment of amounts when superannuation fund becomes superannuation scheme or vice versa
Treatment of distributions when superannuation fund wound up
Income from business or trade-like activities
CW 1 Forestry companies established by the Crown, Maori owners, and holding companies buying land with standing timber from founders
Income from holding property (excluding equity)
Certain income of transitional resident
Income from living allowances, compensation, and government grants
Income from certain activities
CX 55 Proceeds from certain disposals by portfolio investment entities or New Zealand Superannuation Fund
CX 56 Portfolio investor allocated income and distributions of income by portfolio investment entities
Transactions between companies in consolidated groups
CZ 5 Exempt interest: overseas money lent to government or local or public authority before 29 July 1983
CZ 13 Treatment of units and interests in unit trusts and group investment funds on issue as at 1 April 1996
Financial arrangements adjustments
Matching rules: revenue account property, prepayments, and deferred payments
DB 49 Adjustment for opening values of trading stock, livestock, and excepted financial arrangements
Use of motor vehicle under certain arrangements
DB 56 Expenditure incurred in operating motor vehicle under agreement or arrangement affected by section CX 7
Payments to spouses, civil union partners, or de facto partners
Avoidance and non-market transactions
Attributed controlled foreign company (CFC) loss
Foreign investment fund (FIF) loss
DP 8 Forestry business on land bought from the Crown, Maori owners, or holding company: no deduction
DP 9 Cost of acquiring timber: forestry business on land bought from the Crown, Maori owners, or holding company
Petroleum exploration expenditure
Petroleum development expenditure
DV 14 Amalgamated company: expenditure on improvements for farming, horticultural, aquacultural, and forestry businesses
Valuation of specified livestock
Valuation of non-specified livestock
Valuation of high-priced livestock
Meaning of depreciable property
How amounts of depreciation loss and depreciation recovery income are calculated
Amount of depreciation loss under diminishing value method or straight-line method
Amount of depreciation loss under pool method
EE 25 Depreciation loss for plant variety rights application granted in 2005–06 or later income year
Improvements, items of low value, or items no longer used
Transfers of depreciable property: associated persons and certain amalgamations
Main income equalisation scheme
Adverse event income equalisation scheme
Thinning operations income equalisation scheme
Refunds: general provisions, and tax credits
EH 77 Sections of main income equalisation scheme that apply to thinning operations income equalisation scheme
Research, development, and resulting market development
Meaning of financial arrangement and excepted financial arrangement
Application of financial arrangements rules
Calculation and allocation of income and expenditure over financial arrangement’s term
Consideration when financial arrangement involves property or services
EW 32 Consideration for agreement for sale and purchase of property or services, hire purchase agreement, specified option, or finance lease
Consideration treated as paid to person
Consideration treated as paid by person
Consideration when legal defeasance has occurred
Consideration when anti-avoidance provision applies
Income and deduction provisions specifically related to financial arrangements
Treatment of original share acquired under financial arrangement
Application of financial arrangements rules to cash basis persons
Controlled foreign company (CFC) rules
When is a company a controlled foreign company?
Calculation of person’s control interest
Calculation of person’s income interest
Ten percent threshold and variations in income interest level
Calculation of attributed CFC income or loss
Calculation of branch equivalent income or loss
Change of residence of companies
Ownership measurement concession
Anti-avoidance rule: stapled stock
Foreign investment fund (FIF) rules
What is a foreign investment fund?
Calculation of FIF income or loss
Relationship with other provisions in Act
EX 59 Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method
Cases of entry into and exit from FIF rules
Commissioner’s default assessment power
EY 19 Premium loading formulas: when life insurers not providing life insurance at start of income year
EY 29 Mortality profit formula: when life insurers not providing life insurance at start of income year
EZ 11 Amounts of depreciation recovery income and depreciation loss for part business use up to 2004–05 income year
EZ 12 Amount of depreciation loss for item acquired from associated person on or before 23 September 1997
EZ 13 Annual rate for item acquired on or after 1 April 1993 and before end of person’s 1994–95 income year
EZ 18 Section EZ 17 amount of depreciation loss when items transferred between companies in wholly-owned group before 1 April 1993
EZ 19 Section EZ 17 amount of depreciation loss when person previously exempt from tax acquires item
EZ 23 Economic rate for plant or equipment acquired before 1 April 2005 and buildings acquired before 19 May 2005
Controlled foreign company and foreign investment fund rules
Old financial arrangements rules
EZ 47 Election to continue to treat certain excepted financial arrangements as financial arrangements
EZ 49 Determination of core acquisition price where consideration for property denominated in foreign currency
Exceptions for property transferred on death of person
Debt percentage of New Zealand group
Debt percentage of worldwide group
Determining membership of groups
Measuring ownership interests in companies
Membership and debt percentages of foreign groups
Calculating taxable income for consolidated group returns
Accounting for particular property
Treatment of foreign dividends
Membership of consolidated groups
Forming, joining, or leaving consolidated groups
When membership starts and stops
Treatment of shares, income, expenditure, and bad debts
Property passing to amalgamated company on amalgamation
Treatment of financial arrangements between amalgamating companies
Arrangements involving dividend stripping
Arrangements involving transfer pricing
Arrangements involving tax losses
Arrangements to defeat continuity provisions
Arrangements involving qualifying companies
Arrangements involving controlled foreign companies
Arrangements involving foreign investment funds
Arrangements involving film rights
Arrangements involving petroleum mining
Arrangements involving financial arrangements
Arrangements involving trust beneficiary income
Arrangements involving repatriation of commercial bills
Attribution rule for income from personal services
Arrangements involving restrictive covenants
Arrangements involving fringe benefit tax
Arrangements involving depreciation loss
Arrangements involving imputation rules
Arrangements involving foreign dividends
Arrangements involving Maori authority credits
Arrangements involving family support credits
Arrangements involving money not at risk
Arrangements involving returning share transfers
Disposals of trading stock or similar property
Treatment of profits, dividends, and tax losses
Special tax matters for loss-attributing qualifying companies
Elections: qualifying companies
Elections: loss-attributing qualifying companies
Qualifying company election tax
Effective interests in qualifying companies
Tax treatment of amounts that beneficiaries derive from trusts
Tax treatment of trustee income
Settlors and their liabilities
Treatment of transition situations
Valuation of property, trading stock, and financial arrangements
Rate and payment of income tax
Eligibility requirements: portfolio investment entities and foreign investment vehicles
Becoming and ceasing to be portfolio investment entity
Periods relevant to calculation of portfolio entity tax liability
Allocation of income in some cases
Calculating portfolio entity tax liability
HL 20 Portfolio class taxable income and portfolio class taxable loss for portfolio allocation period
Payment by portfolio tax rate entity of tax for tax year
HL 27 Treatment of portfolio investor allocated loss for zero-rated portfolio investors and investors with portfolio investor exit period
Treatment of losses for entity
Partnerships and joint ventures
Tax loss components carried forward
Tax credits for persons on low incomes
Tax credits for transitional circumstances
Adjustments to certain tax credits
Use of credits in later tax years
Treatment of taxable distributions
Supplementary dividend holding companies
Underlying foreign tax credits
Credits for certain non-resident investment companies
Credits for interest on home vendor mortgages
Credits for savings in special home ownership accounts
Shareholder continuity requirements
Treatment of credits and debits on resident’s restricted amalgamation
Amalgamation of companies in consolidated groups
Imputation credits attached to dividends
Distributions of statutory producer boards and co-operative companies
Tables of credits and debits in memorandum accounts
FDP credits attached to dividends
CTR credits attached to dividends
Table O5: conduit tax relief credits
Table O6: conduit tax relief debits
Companies with branch equivalent tax accounts
Persons with branch equivalent tax accounts
Table O7 branch equivalent tax credits
Table O8 branch equivalent tax debits
Table O9 person's equivalent tax credits
Table O10 person's equivalent tax debits
Companies with policyholder credit accounts
Policyholder credits of PCA company
Policyholder debits of PCA company
Persons with policyholder credit accounts
Policyholder credits of PCA person
Policyholder debits of PCA person
Table O13 policy holder credits
Table O15 person's policyholder credits
Table O16 person's policyholder debits
Maori authority credits attached to distributions
Table O17 Maori authority credits
Table O18 Maori authority debits
Consolidated groups and imputation credit accounts
Imputation credits of consolidated imputation groups
Imputation debits of consolidated imputation groups
Table O19 imputation credits of consolidated imputation groups
Table O20 imputation debits of consolidated imputation groups
Consolidated groups and FDP accounts
FDP credits of consolidated FDP groups
FDP debits of consolidated FDP groups
Table O21 : credits of consolidated FDP groups
Table O22 : FDP debits of consolidated FDP groups
Consolidated groups and CTR credits
CTR credits of consolidated groups
CTR debits of consolidated groups
Consolidated groups’ FDP payments and refunds
Table O23 : conduit tax relief credits of consolidated groups
Table O23 : conduit tax relief debits of consolidated groups
Consolidated groups and branch equivalent tax accounts
Branch equivalent tax credits of consolidated BETA groups
Branch equivalent tax debits of consolidated BETA groups
Table O25 : branch equivalent tax credits of consolidated BETA groups
Table O26 : branch equivalent tax debits of consolidated BETA groups
Consolidated groups and policyholder credit accounts
Policyholder credits of consolidated groups
Policyholder debits of consolidated groups
Payment and withholding obligations
Application of other provisions
Calculating provisional tax liability
Instalments of provisional tax
Requirements for using GST ratio
When persons start or stop paying GST, or change taxable periods
Treatment of groups of companies and amalgamated companies
Attribution rule for income from personal services
PAYE rules and PAYE income payments
Adjustments for certain PAYE income payments
Fringe benefit tax (FBT) rules and fringe benefits
Attributing fringe benefits to employees
Taxable value of fringe benefits
Employer’s superannuation contribution tax (ESCT) rules and employer’s superannuation contributions
Tax on certain withdrawals from superannuation funds
Limits on refunds and transfers
Companies receiving foreign dividends
Persons with policyholder credit accounts
Certain unit trusts and group investment funds
Obligations and treatment of PAYE intermediaries
PAYE intermediaries’ responsibilities
YA 3 Treatment of qualifying company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax
Table Y1 Associated person rules
Voting and market value interests
Voting and market value interests: modifications for continuity provisions
The Parliament of New Zealand enacts as follows:
Part R
General collection rules
Subpart RA—General withholding and payment obligations
Introductory provisions
RA 1 What this Part does
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This Part provides the rules to require a person to pay to the Commissioner interim and terminal payments of tax and other amounts payable under the Inland Revenue Acts. The Part provides for—
(a) a person’s general withholding and payment obligations; and
(b) the payment of terminal tax, seesubpart RB; and
(c) the payment of provisional tax, seesubpart RC; and
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(d) the payment of the following employment-related taxes, seesubpart RD:
(i) pay-as-you-earn (PAYE):
(ii) fringe benefit tax (FBT):
(iii) employer’s superannuation contribution tax (ESCT); and
(e) the payment of resident withholding tax (RWT), seesubpart RE; and
(f) the payment of non-resident withholding tax (NRWT), seesubpart RF; and
(g) the payment of a foreign dividend payment (FDP), seesubpart RG; and
(h) the treatment of refunds by the Commissioner, seesubpart RM; and
(i) the use of intermediaries in the tax system, seesubpart RP.
Defined in this Act: amount, Commissioner, employer’s superannuation contribution, ESCT, FBT, FDP, fringe benefit tax, Inland Revenue Acts, intermediary, NRWT, pay, PAYE, provisional tax, RWT, tax, terminal tax,
RA 2 Amounts treated as income tax
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The provisions of this Act and the Tax Administration Act 1994 apply in relation to an amount that a person is liable to pay under this Part as if the amount were income tax imposed under section BB 1 (Imposition of income tax).
Defined in this Act: amount, income tax, pay,
Compare: 2004 No 35 ss MB 12, NC 2(1), ND 1W(2), NE 7(2), NF 13, NG 17(2), NH 3(7)
Payment and withholding obligations
RA 3 Terminal tax obligations
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A person liable under section BC 8 (Satisfaction of income tax liability) to pay an amount of terminal tax for a tax year must pay the amount to the Commissioner under subpart RB (Terminal tax) by the due date.
Defined in this Act: amount, Commissioner, pay, tax year, terminal tax,
Compare: 2004 No 35 ss BC 9, MC 1
RA 4 Provisional tax obligations
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A person liable to pay provisional tax must pay instalments on account of their income tax liability for a tax year to the Commissioner under subpart RC (Provisional tax) by the due dates.
Defined in this Act: Commissioner, income tax liability, pay, provisional tax, tax year,
Compare: 2004 No 35 ss BB 2(3), MB 4
RA 5 Tax obligations for employment-related taxes
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A person who makes a payment or provides a benefit of 1 of the following kinds must either withhold and pay, or pay, the amount of tax for the payment or benefit to the Commissioner under subpart RD (Employment-related taxes) by the due dates:
(a) a PAYE income payment:
(b) a fringe benefit:
(c) an employer’s superannuation contribution.
Defined in this Act: amount of tax, Commissioner, employer’s superannuation contribution, fringe benefit, pay, PAYE income payment,
Compare: 2004 No 35 ss BE 1(1), (4), (5), NC 15, ND 1, NE 3
RA 6 Withholding and payment obligations for passive income
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Resident passive income
(1) A person who makes a payment of resident passive income must withhold and pay RWT for the payment to the Commissioner under subpart RE (Withholding tax on resident passive income (RWT)) by the due dates.
Non-resident passive income
(2) A person who makes a payment of non-resident passive income must withhold and pay NRWT for the payment to the Commissioner under subpart RF (Withholding tax on non-resident passive income (NRWT)) by the due dates.
Foreign dividends
(3) A company that receives a foreign dividend must pay FDP for the dividend to the Commissioner under subpart RG (Payments for foreign dividends (FDP)) by the due date.
Defined in this Act: Commissioner, company, FDP, foreign dividend, non-resident passive income, NRWT, pay, resident passive income, RWT,
Compare: 2004 No 35 ss BE 1(4)–(6), NF 4, NG 11, NH 3
RA 7 Payment of tax by public authorities
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A public authority that pays an amount under this Act acts within its capacity, whether further appropriation is made or not.
Defined in this Act: amount, pay, public authority,
Compare: 2004 No 35 s MH 1
RA 8 Liability of persons receiving payments or benefits
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Despite sections RA 5 and RA 6, a person receiving or deriving a payment or benefit in relation to which an amount of tax must be withheld or paid may be liable under this Part for payment of the tax.
Defined in this Act: amount of tax, pay, tax,
Compare: 2004 No 35 ss NC 16, NE 2A(1), (2), NF 3, NG 12
RA 9 Treatment of amounts withheld as received
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Payments treated as received or derived
(1) An amount withheld from a payment under this Part, unless a provision in this Part states otherwise,—
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(a) is treated as received—
(i) by the person to whom the payment is made; and
(ii) at the time the payment is made; and
(b) is treated for the purposes of this Act as derived by the person at the same time and in the same way as they derive the payment from which the amount is withheld; and
(c) includes a combined tax and earner-related payment.
Exclusion
(2) Subsection (1) does not apply to a replacement payment under a share-lending arrangement.
Defined in this Act: amount, combined tax and earner-related payment, pay, replacement payment, share-lending arrangement,
Compare: 2004 No 35 ss NC 19, NE 6, NF 12, NG 15
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RA 10 When obligations not met
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When this section applies
(1) This section applies when—
(a) a person liable to withhold an amount of tax for a PAYE income payment, an employer’s superannuation contribution, a payment of resident passive income, or a payment of non-resident passive income, does not withhold and pay the amount to the Commissioner; or
(b) a person liable to pay an amount of tax to the Commissioner for a fringe benefit does not pay the amount; or
(c) a person liable to pay FDP does not pay the amount to the Commissioner.
Debt payable to Commissioner
(2) The amount is a debt payable to the Commissioner.
When payable
(3) The amount is due to be paid to the Commissioner on the relevant due date after the end date for the original liability set out in section RA 15.
Premiums and levies
(4) The amount includes a combined tax and earner-related payment.
Defined in this Act: amount, amount of tax, combined tax and earner-related payment, Commissioner, employer’s superannuation contribution, FDP, fringe benefit, non-resident passive income, pay, PAYE income payment, resident passive income,
Compare: 2004 No 35 ss NC 5(2), NC 16, NC 20(1), ND 1, ND 1W(2), NE 5, NF 3, NF 4, NF 13, NG 12, NG 13
RA 11 Adjustment to correct errors: certain underpayments
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When this section applies
(1) This section applies when—
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(a) a person (the payer) is required to withhold and pay to the Commissioner—
(i) RWT in relation to a payment to another person (the payee) of resident passive income that is interest or a dividend treated as interest; or
(ii) NRWT in relation to a payment to the payee of non-resident passive income; and
(b) the payer, through an error, does not withhold some or all of the amount.
Amount withheld from later payment or recovered
(2) The payer may—
(a) subtract from a later payment to the payee an amount to correct the deficiency; or
(b) recover from the payee an amount to correct the deficiency.
Requirements when withholding from later payment
(3) For the purposes of subsection (2)(a),—
(a) the later payment must be a payment of interest, a dividend treated as interest, or a payment of non-resident passive income, as applicable; and
(b) the payment must be made in the same tax year in which the first payment is made.
Defined in this Act: amount, Commissioner, dividend treated as interest, interest, non-resident passive income, NRWT, pay, resident passive income, RWT, tax year,
Compare: 2004 No 35 ss NF 6(1), NG 16A(1)
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RA 12 Adjustment to correct errors: certain excess amounts
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When this section applies
(1) This section applies when—
(a) a person (the payer) is required to withhold and pay to the Commissioner an amount of RWT or NRWT for a payment to another person (the payee); and
(b) the payer, through an error, withholds an amount (the excess amount) that is more than the amount required under this Part.
Refunding excess amount of resident passive income
(2) For a payment of resident passive income, the payer may pay the excess amount to the payee at any time before the end of the tax year in which the amount of tax is withheld if,—
(a) for a payment of interest or a dividend treated as interest, an RWT withholding certificate relating to the amount has either not been sent out or has been returned and cancelled:
(b) for a payment of a dividend other than a dividend treated as interest, a shareholder dividend statement relating to the amount has either not been sent out for the purposes of section 29 of the Tax Administration Act 1994 or has been returned and cancelled:
(c) for a taxable Maori authority distribution, a notice relating to the amount has either not been given to a member of the Maori authority under section 31 of that Act or has been returned and cancelled.
Treatment of amount
(3) For the purposes of this section, when the payer pays the excess amount under subsection (2), the amount is no longer treated as RWT.
Amendments to notices
(4) If the RWT withholding certificate, shareholder dividend statement, or notice referred to in subsection (2)(c) has been returned or cancelled, the payer must provide the payee with an amended certificate, statement, or notice, as applicable.
Commissioner refunding overpayment
(5) If the excess amount has been paid to the Commissioner, the Commissioner must refund the amount of the overpayment to—
(a) the payee; or
(b) the payer, if they have not subtracted the amount under subsection (6)(a) from a later payment made in relation to the payee.
Payer’s options
(6) For the purposes of subsection (5), if the excess amount has been refunded to the payee, the payer may—
(a) subtract the amount from an amount paid later to the Commissioner under section RE 21 or RF 13 (which relate to resident passive income and non-resident passive income), noting the action in the statement required under section 50 of the Tax Administration Act 1994; or
(b) apply for a refund of the amount under section RM 8 (Overpaid RWT or NRWT).
Overpayment through payee’s act or omission
(7) Despite subsections (2) and (5), if the excess amount arises from an act or omission by the payee, the payer must pay the full amount withheld to the Commissioner and is not liable to repay the excess amount to the payee or another person.
Defined in this Act: amount, amount of tax, Commissioner, dividend, dividend treated as interest, interest, Maori authority, non-resident passive income, notice, NRWT, pay, resident passive income, RWT, RWT withholding certificate, shareholder dividend statement, tax year, taxable Maori authority distribution,
Compare: 2004 No 35 ss NF 6(2)–(4), NF 7(1), (2), NG 16A(2), (3)
Payment dates
RA 13 Payment dates for terminal tax
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When payment due
(1) A person must pay their terminal tax for a tax year by—
(a) the 7th day of the month in schedule 3, part A, column G or H (Payment of provisional tax and terminal tax) for the person’s corresponding income year, unless paragraph (b) applies; and
(b) the 15th day of January, if December is the month in schedule 3, part A, column G or H, for the person’s corresponding income year.
Columns G and H
(2) For the purposes of subsection (1), the month in schedule 3, part A, column G or H, for the person’s corresponding income year is—
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(a) the month in column H, if—
(i) the person’s return of income for the income year was linked to a tax agent as described in subsection (3); or
(ii) the person has asked for an income statement under section 80C of the Tax Administration Act 1994 or has been sent an income statement under section 80D of that Act, and the Commissioner has been notified that a tax agent will respond to the income statement sent to the person; or
(b) the month in column G in any other case.
First occurrence of month
(3) For the purposes of subsection (1),—
(a) the month in column G is the first occurrence of that month after the balance date:
(b) the month in column H is the first occurrence of that month after the month in column G.
Linked to tax agent
(4) For the purposes of subsection (2)(a)(i), a return of income is linked to a tax agent if the Commissioner has been notified that the return is to be filed by the tax agent who has an extension of time under section 37(4) of the Tax Administration Act 1994.
Defined in this Act: Commissioner, corresponding income year, income statement, notify, pay, return of income, tax agent, tax year, terminal tax,
Compare: 2004 No 35 s MC 1
RA 14 Payment dates for provisional tax
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A person must pay their provisional tax for a tax year under section RC 9 (Provisional tax payable in instalments) according to the relevant cycle of instalments set out in schedule 3, part A, columns A to F (Payment of provisional tax and terminal tax).
Defined in this Act: pay, provisional tax, tax year,
Compare: 2004 No 35 s MB 8(1), (2)
RA 15 Payment dates for interim and other tax payments
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When this section applies
(1) This section applies when a person is required—
(a) to withhold under section RA 5 an amount of tax for a payment and pay it to the Commissioner; or
(b) to withhold and pay, or pay, under section RA 6 an amount to the Commissioner for a payment received or benefit provided by them.
When payment due
(2) The person must pay the amount to the Commissioner by the following dates:
(a) when the period for which the payment is made is shorter than a month, by the 5th day after the relevant end date:
(b) when the period for which the payment is made is a month or a period that is longer than a month, by the 20th day after the relevant end date:
(c) when the period for which the payment is made is a tax year or income year or both, or the last quarter of a year, by 31 May:
(d) for a close company that pays FBT on a tax year basis, by terminal tax date.
Relevant end dates
(3) In this section, an end date means 1 of the following, as applicable:
-
(a) for PAYE and ESCT payable for 2 payment periods in a month under section RD 4(1)(b) or RD 65(3) (which set out the basis for payment of PAYE and ESCT),—
(i) for the first payment period, the 15th day of the month; and
(ii) for the second payment period, the last day of the month:
(b) for PAYE, RWT, and NRWT payable monthly under sections RD 4(1)(a), RE 21(2) and (7), or RF 13(3) (which set out the basis for payment of PAYE, RWT, and NRWT), as applicable, the last day of a month:
(c) for FBT and FDP payable quarterly under sections RD 58 to RD 59 and RD 62, or RG 3 (which set out the basis for payment of FBT and FDP), as applicable, the last day of a quarter:
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(d) for RWT and NRWT payable by instalment under section RE 21(3) or RF 13(2) (which set out the basis for payment of RWT and NRWT)—
(i) for the first instalment, the last day of September; and
(ii) for the second instalment, the last day of March.
When payment due in December
(4) Despite subsection (2), for the purposes of this section and the payment of PAYE and ESCT to the Commissioner, if the month referred to in subsection (3) is December, the payment is due by 15 January.
Discrepancies
(5) Subsection (6)—
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(a) applies when a discrepancy arises in the information that a person is required to provide under,—
(i) for resident passive income, section 51(1), (4), or (5) of the Tax Administration Act 1994:
(ii) for non-resident passive income, section 49(1) or (2) of that Act:
(b) does not apply to an unpaid amount that the Commissioner assesses for a particular return period.
Payment dates
(6) If an amount of RWT or NRWT remains unpaid, the person required to withhold the amount must pay it to the Commissioner no later than—
(a) 20 April after the end of the tax year in relation to information provided under section 49(1) or 51(1) of the Tax Administration Act 1994:
(b) the last date for providing the information, in relation to information provided under section 49(2) or 51(4) or (5) of that Act.
Non-resident passive income
(7) The Commissioner may extend the time for payment of NRWT.
Defined in this Act: amount of tax, assessment, close company, Commissioner, end date, ESCT, FBT, FDP, first payment period, income year, non-resident passive income, NRWT, pay, PAYE, quarter, resident passive income, RWT, second payment period, tax year, terminal tax,
Compare: 2004 No 35 ss NC 15, ND 9(2), (3), ND 10, ND 13, ND 14, NE 4, NF 4, NG 11, NH 3
RA 16 Payment date when taxable activity ends
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When this section applies
(1) This section applies for a month when a registered person is required under section RA 6 to withhold and pay RWT or NRWT, and the person—
(a) stops carrying on a taxable activity; or
(b) no longer carries on a taxable activity in New Zealand.
Payment to Commissioner
(2) The person must pay to the Commissioner by the 20th day of the next month the total amount of tax for all payments relating to the taxable activity to the extent to which an amount of tax remains unpaid.
Exemption continuing
(3) This section does not apply for resident passive income if the person continues to hold an RWT exemption certificate.
Defined in this Act: amount of tax, Commissioner, NRWT, pay, registered person, resident passive income, RWT, RWT exemption certificate, taxable activity,
Compare: 2004 No 35 ss NF 4(5), NG 11(4)
RA 17 Payment date when RWT exemption certificate expires
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When this section applies
(1) This section applies in relation to a month of a tax year when an RWT exemption certificate of a person expires.
Payment to Commissioner
(2) The person must pay to the Commissioner by the 20th day of the month following that in which the certificate expires the total amount of tax withheld by them to the extent to which the amount remains unpaid.
Exclusion
(3) This section does not apply if the person continues to be required to withhold RWT through the carrying on of a taxable activity.
Defined in this Act: amount of tax, Commissioner, pay, RWT, RWT exemption certificate, tax withheld, tax year, taxable activity,
Compare: 2004 No 35 s NF 4(6)
RA 18 Payment date for emigrating companies
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When this section applies
(1) This section applies to an emigrating company that is treated under section FL 2 (Treatment of emigrating companies and their shareholders) as paying a distribution to a shareholder.
Payment
(2) On or before the date that is 3 months after the time of emigration, the company must pay to the Commissioner all amounts of tax for resident passive income or non-resident passive income withheld in relation to the distribution.
Defined in this Act: amount of tax, Commissioner, emigrating company, non-resident passive income, pay, resident passive income, shareholder, time of emigration,
Compare: 2004 No 35 ss NF 4(6B), NG 11(4B)
Refunds
RA 19 Refunds of excess amounts or when amounts mistakenly paid
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When this section applies
(1) This section applies for a person (the payer) and the withholding of an amount of tax that is more than the amount required to be withheld and paid under this Part (the excess amount) or an amount mistakenly paid, when—
(a) the payer withholds and pays to the Commissioner an excess amount of RWT or NRWT:
(b) the payer pays FDP of an excess amount:
(c) a PAYE intermediary pays an amount of tax for an employer through an error, or when the payment is not funded by the employer, as described in section RM 7 (Refunds to PAYE intermediaries):
(d) the result of a calculation for FBT made by an employer under sections RD 50 to RD 53 (which relate to attributed benefits and non-attributed benefits) is negative.
Refunds
(2) The Commissioner must refund the excess amount to the payer.
Defined in this Act: amount, amount of tax, Commissioner, employer, FBT, FDP, NRWT, pay, PAYE intermediary, RWT,
Compare: 2004 No 35 ss NBA 7, ND 10(4)(a), NF 7(1), NG 16, NH 4
Amalgamations
RA 20 Amalgamation of companies
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If an amalgamating company ends its existence on a resident’s restricted amalgamation, an unsatisfied obligation that the amalgamating company has at the time of the amalgamation to withhold and pay an amount of tax to the Commissioner under this Part is treated as an obligation of the amalgamated company.
Defined in this Act: amalgamated company, amalgamating company, amount of tax, Commissioner, pay, resident’s restricted amalgamation,
Compare: 2004 No 35 ss NC 15(7), ND 13(8), ND 14(8), NH 4(8)
Regulations
RA 21 Regulations
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PAYE income payments
(1) The Governor-General may make regulations by Order in Council to—
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(a) declare a particular payment, or particular class of payments, to be included in, or excluded from, the definition of—
(i) salary or wages; or
(ii) extra pay; or
(iii) schedular payment:
(b) provide further rules in relation to schedular payments as set out in subsection (2):
(c) provide that the regulations do not apply to a particular person, or class or persons, on notification from the Commissioner.
Schedular payments
(2) For the purposes of subsection (1)(b), regulations may be made under this Act or the Tax Administration Act 1994 in relation to schedular payments for the following purposes:
(a) to set the amount of tax for a particular schedular payment or particular class of schedular payment:
(b) to provide that the Commissioner may, if a person asks, set the rate of tax for a schedular payment to the person:
(c) to provide that the amount of tax for a particular schedular payment, class of schedular payment, or schedular payments under a particular threshold is the person’s income tax liability in relation to the relevant kind of income:
(d) to provide that an amount of tax must be withheld and paid despite any assignment or charge.
Employment-related loans
(3) The Governor-General may make regulations by Order in Council to declare the rate of interest applying to employment-related loans.
Application to quarters
(4) When regulations referred to in subsection (2) are made, they apply to quarters starting from a date at least 1 month following the date the regulations were made. Regulations that reduce the rate of interest from the prescribed rate of interest at the time, if made at least 1 month before the quarter ends, may apply for that quarter.
Defined in this Act: amount of tax, employment-related loan, extra pay, income, income tax liability, interest, notify, pay, prescribed rate of interest, quarter, salary or wages, schedular payment, tax,
Compare: 2004 No 35 ss NC 21, ND 1F
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Application of other provisions
RA 22 Limits on application of other provisions for purposes of PAYE rules
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Amounts not separated
(1) For an amount of tax not withheld and paid to the Commissioner, the provisions listed in subsection (2) do not require—
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(a) the separate identification of the amounts of a combined tax and earner-related payment that are attributable to—
(i) an amount of tax for a PAYE income payment that an employer or PAYE intermediary is required to make under the PAYE rules:
(ii) an amount that an employer must subtract under the sections referred to in subsection (2)(b) to (d):
(b) the bringing of separate proceedings or separate treatment for the collection, recovery, or imposition of penalties in relation to an amount of a combined tax and earner-related payment.
Provisions
(2) The sections referred to in subsection (1) are—
(a) sections 143, 143A, and 156 to 165 of the Tax Administration Act 1994:
(b) section 115 of the Accident Rehabilitation and Compensation Insurance Act 1992:
(c) section 285 of the Accident Insurance Act 1998:
Defined in this Act: amount, amount of tax, combined tax and earner-related payment, Commissioner, employer, pay, PAYE income payment, PAYE intermediary, PAYE rules,
Compare: 2004 No 35 s NC 20
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RA 23 Application of other provisions for purposes of ESCT rules and NRWT rules
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References
(1) For the purposes of the ESCT rules and the NRWT rules, sections 167 and 169 of the Tax Administration Act 1994 apply, modified as necessary, as if—
(a) a reference to an amount of tax withheld were a reference to ESCT or NRWT, as applicable:
(b) a reference to an employer were a reference to a person required to withhold and pay ESCT or NRWT, as applicable:
(c) a reference to the PAYE rules were a reference to the ESCT rules or the NRWT rules.
Exclusion
(2) Sections 121 and 122 of the Tax Administration Act 1994 do not apply to an amount of tax for an employer’s superannuation contribution.
Defined in this Act: amount of tax, employer, employer’s superannuation contribution, ESCT, ESCT rules, NRWT, NRWT rules, pay, PAYE rules, tax withheld,
Compare: 2004 No 35 ss NE 7, NG 17(1)
Subpart RB—Terminal tax
RB 1 Payment of terminal tax
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A person must pay their terminal tax for a tax year on the due date set out in section RA 3 (Terminal tax obligations).
Defined in this Act: pay, tax year, terminal tax,
Compare: 2004 No 35 s MC 1
RB 2 Income tax liability for non-filing taxpayers for non-resident passive income
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For the purposes of calculating a person’s terminal tax under section BC 8 (Satisfaction of income tax liability), the income tax liability of a non-filing taxpayer who derives non-resident passive income is determined under section BC 1 (Non-filing and filing taxpayers).
Defined in this Act: income tax liability, non-filing taxpayer, non-resident passive income, terminal tax,
Compare: 2004 No 35 s BC 1
RB 3 Schedular income tax liability for filing taxpayers for non-resident passive income
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When this section applies
(1) This section applies for the purposes of calculating a filing taxpayer’s terminal tax under section BC 8 (Satisfaction of income tax liability).
Calculating amount of liability
(2) The schedular income tax liability of the filing taxpayer under section BC 7 (Income tax liability of person with schedular income) for each class of non-resident passive income that is schedular income under paragraph (h) of the definition of schedular income is equal to an amount calculated using the formula—
amount of income × tax rate.
Definition of item in formula
(3) In the formula, tax rate is the rate set out in sections RF 7 to RF 10, and RF 12 (which relate to the calculation of NRWT) that applies to the class of non-resident passive income.
No imputation credits
(4) If the taxpayer derives a dividend to which subsection (2) applies, they do not have a credit under section LE 1 (Tax credits for imputation credits) for an imputation credit attached to the dividend.
Defined in this Act: amount, dividend, filing taxpayer, imputation credit, non-filing taxpayer, non-resident passive income, NRWT, schedular income, schedular income tax liability, terminal tax,
Compare: 2004 No 35 ss BC 7, NG 3
RB 4 Using refunds to satisfy tax liabilities
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If a person is entitled to a refund of an amount of tax from the Commissioner, the amount may be applied under section RM 10 (Using refund to satisfy tax liability) to satisfy a liability that the person has under the Inland Revenue Acts.
Defined in this Act: amount of tax, Commissioner, Inland Revenue Acts,
Compare: 2004 No 35 s MD 1(3), (3A)
Subpart RC—Provisional tax
Introductory provisions
RC 1 What this subpart does
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When this subpart applies
(1) Sections RC 3 to RC 39 apply, for the purposes of the provisional tax rules, to provide—
(a) the circumstances in which a person has a provisional tax obligation:
(b) a person’s provisional tax liability for a tax year, and the methods for calculating the amount payable for the tax year:
(c) the number of instalments of provisional tax and the instalment dates for a corresponding income year:
(d) how the amount of an instalment of provisional tax is determined:
(e) the payment of provisional tax in a transitional year:
(f) the application of the rules relating to use of money interest in Part 7 of the Tax Administration Act 1994, and late payment penalties and shortfall penalties in Part 9 of that Act.
Instalment dates
(2) In this subpart, a reference to an instalment classified by the letters A to F is a reference to a date in the table in schedule 3, part A (Payment of provisional tax and terminal tax) on which an instalment of provisional tax is payable for an income year corresponding to a tax year.
Defined in this Act: amount, corresponding income year, income year, instalment date, pay, provisional tax, provisional tax rules, shortfall penalty, tax year, transitional year,
Compare: 2004 No 35 s MB 1
RC 2 Provisional tax rules and their application
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Meaning
(1) The provisional tax rules means—
(a) this subpart; and
(b) section LB 2 (Tax credits for provisional tax payments); and
(c) sections 15N to 15S, 119, 120KB to 120N, 120OE, 139B and 139C, 173P to 173R of the Tax Administration Act 1994.
Application
(2) The provisional tax rules apply to a person who is required or who chooses to pay provisional tax.
Defined in this Act: provisional tax, provisional tax rules,
Compare: 2004 No 35 s OB 1 provisional tax rules
RC 3 Who is required to pay provisional tax?
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Threshold or election
(1) A person who is liable to pay provisional tax for a tax year is—
(a) a person whose residual income tax for the tax year is more than $2,500; or
(b) a person who chooses under section RC 4 to pay provisional tax.
Exclusions
(2) Despite subsection (1), the following persons do not pay provisional tax:
(a) a company that does not have a fixed establishment in New Zealand and is not treated as resident in New Zealand:
(b) a person referred to in section 33A(1) of the Tax Administration Act 1994:
(c) a non-resident contractor who has not been given an exemption certificate by the Commissioner for the tax year:
(d) a portfolio tax rate entity that does not make an election under section HL 23 (Payments of tax by portfolio tax rate entity choosing to pay provisional tax).
No obligation
(3) A person has no obligation to pay provisional tax for a tax year if their residual income tax for the preceding tax year is $2,500 or less.
Defined in this Act: Commissioner, company, exemption certificate, fixed establishment, New Zealand, non-resident, non-resident contractor, pay, portfolio tax rate entity, provisional tax, resident in New Zealand, residual income tax, tax year,
Compare: 2004 No 35 ss MB 2, OB 1 provisional taxpayer
RC 4 Choosing to pay provisional tax
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Election
(1) A person, when first providing a return of income for a tax year, may choose to pay provisional tax for the tax year if—
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(a) they have paid provisional tax of more than $2,500 on or before—
(i) the date of instalment F for the corresponding income year; or
(ii) the final instalment date in a transitional year; and
(b) they have, on the day on which the first payment of provisional tax is made for the tax year, a reasonable expectation that they are liable to pay provisional tax for the tax year, other than by this election.
Exclusion
(2) This section does not apply to a person described in section RC 3(2).
Defined in this Act: corresponding income year, final instalment, instalment date, pay, provisional tax, return of income, tax year, transitional year,
Compare: 2004 No 35 s MB 3
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Calculating provisional tax liability
RC 5 Methods for calculating provisional tax liability
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Choice of method
(1) A person liable to pay provisional tax must calculate the amount payable for a tax year using 1 of the methods described in subsections (2) to (7).
Standard method: 5% uplift
(2) Under the standard method, the amount of provisional tax payable for the tax year is 105% of the person’s residual income tax for the preceding tax year, determined under section RC 6. Subsection (3) overrides this subsection.
Standard method: 10% uplift
(3) Despite subsection (2), the amount of provisional tax payable for the tax year is 110% of the person’s residual income tax for the tax year before the preceding tax year if—
(a) they are required to provide a return of income for the preceding tax year; and
(b) the return is not due on or before the date on which the first payment of provisional tax for the tax year is required through the application of section 37 of the Tax Administration Act 1994, or an extension granted under that section; and
(c) they have not provided the return on or before that date; and
(d) the date is not the date of instalment F for the corresponding income year.
Relationships and modification of standard method
(4) Subsections (5) to (7) override subsection (3). Section RZ 3 (Standard method: 2008–09 and 2009–10 income years) modifies subsection (3).
Estimation method
(5) The person may estimate their provisional tax liability for the tax year under section RC 7.
GST ratio method
(6) A person who is eligible under section RC 16 and not excluded by section RC 17 may choose to use a goods and services tax (GST) ratio under section RC 8 to determine their provisional tax liability for the tax year.
Commissioner’s determination
(7) If the Commissioner determines a person’s provisional tax liability under section 119 of the Tax Administration Act 1994, the amount or liability is that last determined by the Commissioner and notified to the person at least 30 days before the instalment date. The 30-day requirement does not apply in a case to which section 119(1)(d) of that Act applies (which relates to an estimate of residual income tax that is not fair and reasonable).
Life insurance business
(8) A person who carries on a business of providing life insurance and who is liable for income tax under the life insurance rules, must at the time they determine their provisional tax liability provide the Commissioner with details of the calculation of that liability. In particular, they must detail the extent to which the amount of provisional tax relates to the policyholder base.
Defined in this Act: amount, business, Commissioner, corresponding income year, GST ratio, income tax, instalment date, life insurance, life insurance rules, notify, pay, policyholder base, provisional tax, residual income tax, return of income, tax year,
Compare: 2004 No 35 s MB 4
RC 6 Standard method
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When this section applies
(1) This section applies to a person liable to pay provisional tax for the purposes of section RC 5(2) and (3) and the calculation of the amount of provisional tax payable for a tax year under the standard method.
Assessment for preceding tax year
(2) The person’s residual income tax for a tax year is based on their assessment for the preceding tax year unless the Commissioner has sent out a notice of assessment for the tax year at least 30 days before the relevant instalment date, in which case the amount of residual income tax is based on the Commissioner’s assessment for the preceding tax year.
Commissioner’s assessment for preceding tax year
(3) The person’s residual income tax is based on the Commissioner’s assessment for the preceding tax year, whenever the assessment is made, if—
(a) they are required under sections 33 and 37 of the Tax Administration Act 1994 to provide a return of income for the preceding tax year but have failed to do so by the relevant instalment date; or
(b) they are not required under sections 33 and 37 of that Act to provide a return by the relevant instalment date, and subsections (2) and (4) do not apply.
Residual income tax for preceding tax year
(4) The amount of provisional tax payable for a tax year is the amount of the person’s residual income tax for the preceding tax year if—
(a) they are not required to provide a return of income for the preceding tax year; or
(b) their residual income tax for the tax year before the preceding tax year was $2,500 or less, and they were not required to provide, and have not provided, a return of income for the tax year by the date of instalment F for the corresponding income year.
Later increased assessment
(5) If the Commissioner’s assessment of a person’s income tax liability occurs after the payment date for an instalment of provisional tax and would result in an increase in the person’s residual income tax for the preceding tax year, the residual income tax is treated for the purposes of the provisional tax rules as if it had not been increased.
Transitional years and consolidated groups
(6) A person’s residual income tax in a transitional year is calculated under section RC 20. For consolidated groups, the calculation is made under section RC 29.
Defined in this Act: amount, assessment, Commissioner, consolidated group, corresponding income year, income tax liability, instalment date, notice, pay, provisional tax, provisional tax rules, residual income tax, return of income, tax year, transitional year,
Compare: 2004 No 35 s MB 5
RC 7 Estimation method
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When this section applies
(1) This section applies to a person who is liable to pay provisional tax under section RC 5(5) and to the calculation of the amount of their provisional tax payable for a tax year under the estimation method.
Fair and reasonable estimate
(2) On or before an instalment date, the person may make a fair and reasonable estimate of their residual income tax for the tax year by informing the Commissioner of the estimate. The amount of provisional tax payable for a tax year is the amount of the estimated residual income tax.
Revising estimates
(3) The person may choose to revise an estimate made under subsection (2) before an instalment date. The amount last estimated is the amount taken into account under section RC 5(5).
Reasonable care in making and maintaining assessment
(4) A person who makes an estimate under subsection (2) must take reasonable care in making it, and must revise the estimate for the tax year if, at some time in the tax year, the amount estimated is no longer fair and reasonable.
Estimation higher than provisional tax payable
(5) If a person’s estimate is more than the provisional tax that is payable for the tax year, they are treated as having taken reasonable care in making the estimate.
Changing calculation method from GST ratio
(6) If, under section RC 18(5), a person changes the way they determine the amount of provisional tax after the date of an instalment, they must estimate their residual income tax for the corresponding income year, and must pay provisional tax on whichever of instalment dates B, D, and F for their income year occur after 30 days from their last ratio instalment date.
Disaster relief
(7) A person who is significantly affected by a self-assessed adverse event or qualifying event may make an estimate of their provisional tax under section RC 36, and that section overrides this section.
Defined in this Act: amount, Commissioner, corresponding income year, GST ratio, instalment date, pay, provisional tax, qualifying event, ratio instalment date, residual income tax, self-assessed adverse event, tax year,
Compare: 2004 No 35 s MB 6
RC 8 GST ratio method
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Using GST ratio
(1) A person liable to pay provisional tax who meets the requirements of section RC 16 and is not excluded by section RC 17 may choose to use a GST ratio to determine the amount of provisional tax payable for a tax year.
Meaning of GST ratio
(2) The person’s GST ratio is the percentage figure that is obtained by dividing their residual income tax for the preceding tax year by their total taxable supplies for the corresponding income year. The amount of residual income tax and the amount of total taxable supplies are called base amounts for the purposes of this section.
When amounts based on tax year before preceding tax year
(3) If a base amount for the preceding tax year or corresponding income year is not known, the GST ratio is the percentage based on the assessment for the tax year and corresponding income year that are just before the preceding tax year and corresponding income year.
Commissioner’s calculation
(4) The Commissioner must calculate a person’s GST ratio, informing them by—
(a) including the percentage figure on the person’s preprinted GST return form; or
(b) advising them in writing or by telephone; or
(c) some other means.
Adjustment to GST ratio
(5) The Commissioner must adjust a person’s GST ratio if a base amount is revised through, among other reasons,—
(a) an assessment or an amended assessment of the person’s income tax return for the preceding tax year; or
(b) a change in the value of the total taxable supplies for the corresponding income year; or
(c) the disposal of an asset to which section RC 19 applies.
New GST ratio
(6) When subsection (5) applies, the Commissioner must inform the person of the new GST ratio. The new ratio applies in relation to the relevant instalment dates that occur 30 days after the date on which the person is informed.
Transitional years
(7) If a person has paid instalments of provisional tax in a transitional year, for the tax year that follows the transitional year, for the purposes of this section and section RC 11, they must—
(a) ignore the transitional year when determining their residual income tax or total taxable supplies; and
(b) base their determination of residual income tax and total taxable supplies on the tax year preceding the transitional year.
Total taxable supplies
(8) In subsections (2), (5), and (7), and in sections RC 11, RC 19, and RC 31, total taxable supplies, for a person and a period, means the amount that is the total value of taxable supplies by the person for the period. The amount includes the GST charged on the supplies.
Modification
(9) Section RZ 4 (GST ratio method: 2008–09 and 2009–10 income years) modifies this section.
Defined in this Act: amount, assessment, base amount, Commissioner, corresponding income year, GST, GST ratio, income tax, instalment date, pay, provisional tax, residual income tax, return, tax year, taxable supply, total taxable supplies, transitional year,
Compare: 2004 No 35 s MB 7
Instalments of provisional tax
RC 9 Provisional tax payable in instalments
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Who this section applies to
(1) This section applies to a person who is liable to pay provisional tax.
General principle
(2) For a person liable to pay provisional tax using the standard and estimation methods, the amount of the provisional tax liability must be spread evenly over the applicable number of instalments, so that equal amounts are paid on each instalment date. If the full amount is not divisible into exactly equal instalments, the final instalment carries the difference.
Provisional tax payable in 3 instalments
(3) A person pays provisional tax in 3 instalments on the interest instalment dates for the tax year in the months set out in schedule 3, part A, columns B, D, and F (Payment of provisional tax and terminal tax) for the person’s corresponding income year. The amount of each instalment is calculated under section RC 10. Subsection (4) overrides this subsection.
Exclusions
(4) Subsection (3) does not apply—
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(a) to a person liable to pay provisional tax who—
(i) pays GST on a 6-monthly basis; or
(ii) uses a GST ratio to determine the amount of provisional tax payable, or who changes their calculation method under section RC 18(5); or
(iii) changes the cycle of their taxable periods under section 15C of the Goods and Services Tax Act 1985:
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(b) to a person with an initial provisional tax liability who—
(i) pays GST on a 6-monthly basis; or
(ii) pays GST on a monthly or 2-monthly basis, and starts a taxable activity within 30 days before the date of instalment B in their corresponding income year:
(c) to a person liable to pay provisional tax who has not provided a return of income for the preceding tax year, and whose residual income tax for the tax year before the preceding tax year was $2,500 or less:
(d) in a transitional year.
Provisional tax when GST paid on 6-monthly basis
(5) A person liable to pay provisional tax who pays GST on a 6-monthly basis must pay provisional tax on the 2 interest instalment dates for the tax year in the months set out in schedule 3, part A, columns C and F for their corresponding income year. This subsection applies to a person with an initial provisional tax liability other than 1 who pays GST on a 6-monthly basis and starts a taxable activity within 30 days before the date of instalment C.
Provisional tax determined using GST ratio
(6) A person liable to pay provisional tax who uses a GST ratio to determine the amount of provisional tax payable for a tax year, must pay provisional tax on the 6 ratio instalment dates in the months set out in schedule 3, part A, columns A to F for their corresponding income year. The amount of each instalment is calculated under section RC 11.
Changing calculation method
(7) A person who is unable or who decides not to use a GST ratio, changing their calculation method under section RC 18, must pay the provisional tax payable for the tax year on the relevant instalment dates under the replacement method. The amount of each instalment is calculated under section RC 7 or RC 10, as applicable.
Changing cycle of taxable periods
(8) A person who changes the cycle of their taxable periods under section 15C of the Goods and Services Tax Act 1985 must pay provisional tax for the tax year on the instalment dates set out in section RC 27 after the change in taxable period takes effect. The amount of each instalment is calculated under section RC 10.
Persons with initial provisional tax liability
(9) A person with an initial provisional tax liability who starts a taxable activity in a tax year in relation to which they pay GST must pay provisional tax for the tax year—
(a) in 3 instalments under subsection (3) if they start a taxable activity at some time in the period that starts at the beginning of the corresponding income year and ends 30 days before the date of instalment B:
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(b) in 2 instalments—
(i) in a case to which section RC 13 applies; or
(ii) if they start a taxable activity at some time in the period that starts at the beginning of the corresponding income year and ends 30 days before the date of instalment C:
(c) in 1 instalment in a case to which section RC 14 applies.
Extension of time for return
(10) A person who has not provided a return of income for a preceding tax year and whose residual income tax for the tax year before the preceding tax year was $2,500 or less must pay provisional tax for the tax year on the instalment dates set out in section RC 13 or RC 14, as applicable.
Transitional years
(11) In a transitional year, provisional tax is payable as set out in section RC 21 and schedule 3, part B. The amount of each instalment is calculated under sections RC 22 to RC 24.
Voluntary payments
(12) A person liable to pay provisional tax may pay an instalment under section RC 12 at any time.
Defined in this Act: amount, corresponding income year, final instalment, GST, GST ratio, initial provisional tax liability, instalment date, interest instalment date, pay, provisional tax, ratio instalment date, residual income tax, return of income, tax year, taxable activity, taxable period, transitional year,
Compare: 2004 No 35 s MB 8
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RC 10 Calculating amount of instalment under standard and estimation methods
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When this section applies
(1) This section applies for the purposes of—
(a) section RC 5(2), (3), and (5) (which relates to the calculation of a provisional tax liability); and
(b) section RC 9(3) and (7) (which relates to payment of instalments); and
(c) sections RC 13 and RC 14 (which relate to persons with an initial provisional tax liability and those with an extension of time for providing a return); and
(d) sections RC 26 and RC 27 (which relate to changes in taxable periods).
Calculation
(2) The amount of an instalment of provisional tax is calculated using the formula—
Definition of items in formula
(3) In the formula,—
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(a) residual income tax is a person’s residual income tax, as applicable—
(i) for the preceding tax year, uplifted by 5% (modified as applicable by section RZ 5 (Calculating amounts under standard method: 2008–09 and 2009–10 income years); or
(ii) for the tax year before the preceding tax year, uplifted by 10% (modified as applicable by section RZ 5); or
(iii) the amount estimated by them:
(b) instalment number is the number of the instalment for the tax year, whether first, second, or third:
(c) total instalments is the total number of instalments for the tax year:
(d) provisional tax is the amount of a person’s provisional tax liabilities for the tax year to date.
Instalment amounts after change in balance date or taxable period
(4) If a change occurs to the balance date or cycle of a person’s taxable periods, the calculation of the amount of an instalment is made under this section, applying the updated figures to the items in the formula.
Defined in this Act: amount, balance date, initial provisional tax liability, pay, provisional tax, residual income tax, return of income, tax year, taxable period,
Compare: 2004 No 35 s MB 9
Table R1—Summary of Instalment dates and calculation methods for provisional tax
Categories Variables Method Instalments Instalment dates Calculation Interest penalties Standard RC 5(2), (3) RC 6 3: RC 9(3) B, D, F RC 10 120KE(1), (2) Estimation RC 5(5) RC 7 3: RC 9(3) B, D, F RC 10 120KB GST Ratio RC 5(6) 1 month RC 8 6: RC 9(6) A to F RC 11 120KE(3), 139C 2 month RC 8 6: RC 9(6) A to F RC 11 120KE(3), 139C GST 6-month RC 9(4) standard RC 6 2: RC 9(5) C and F RC 11 120KE(1) estimation RC 7 2: RC 9(5) C and F RC 11 120KB Categories: exceptional Persons with initial provisional tax liability RC 6 or RC 7 RC 9(9), RC 13(3), RC 14(2) D and F, or F as required RC 10 (RC 13(4)), RC 10 (RC14(3)) 120KC Transitional years RC 20 RC 22 (RC 9(11)) B, D, F, or C, F as required RC 22 – RC 24 120KC Changing taxable period, or starting and stopping Gst registration RC 27, 15C, 15E (GST Act) RC 27 (RC 9(8)) B, D, F, or C, F as required RC 26, RC27 120KD Changing calculation method RC 18 RC 7(6), RC 9(7) B, D, F, or C, F as required RC 18 120KE(5)–(7) Voluntary payments RC 12 120E
RC 11 Calculating amount of instalment using GST ratio
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Calculation
(1) For a person who uses a GST ratio, the amount of provisional tax payable on an instalment date for a tax year is calculated using the formula—
GST ratio for tax year × total taxable supplies.
Definition of item in formula
(2) In the formula, total taxable supplies is the amount of the person’s total taxable supplies in the taxable period that matches the instalment period.
Taxable supplies when person pays on monthly basis
(3) For the purposes of subsection (1), a person who pays GST on a 1-month cycle under section 15 of the Goods and Services Tax Act 1985 must apply the GST ratio to the sum of their taxable supplies in the current taxable period and the preceding taxable period, that is, the taxable supplies in the 2-month period matching the instalment period.
Modification
(4) Section RZ 4 (GST ratio method: 2008–09 and 2009–10 income years) modifies this section.
Defined in this Act: amount, GST, GST ratio, instalment date, pay, provisional tax, tax year, taxable period, taxable supply, total taxable supplies,
Compare: 2004 No 35 s MB 10
RC 12 Voluntary payments
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A person who is liable to pay provisional tax may at any time make a voluntary payment of an amount of provisional tax that—
(a) relates to their income tax liability for a tax year in which they are not liable for provisional tax; or
(b) is more than the provisional tax payable by them for the tax year; or
(c) is more than the income tax payable by them for the tax year.
Defined in this Act: amount, income tax, income tax liability, pay, provisional tax, tax year,
Compare: 2004 No 35 s MB 12
RC 13 Paying 2 instalments for tax year
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Who this section applies to
(1) This section applies for a tax year to—
(a) a person with an initial provisional tax liability whose first business day occurs in the period that starts 30 days before the date of instalment B and ends 30 days before the date of instalment D; or
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(b) a person liable to pay provisional tax whose return of income for the preceding tax year is provided in the period that starts on the date of instalment B and ends on the date of instalment D if—
(i) they were required to provide a return for the preceding tax year but, under section 37 of the Tax Administration Act 1994 or an extension under that section, are not required to provide the return by the date of instalment B; and
(ii) their residual income tax for the tax year before the preceding tax year was $2,500 or less.
Exclusion
(2) Despite subsection (1), this section does not apply to a person liable to pay provisional tax who pays GST on a 6-monthly basis.
When instalments are payable
(3) For the purposes of section RC 9(9)(b), the instalments are payable on the date of instalments D and F for the person’s corresponding income year.
Formula for amount of instalment
(4) The amount of each instalment is calculated under section RC 10.
Defined in this Act: amount, corresponding income year, first business day, GST, initial provisional tax liability, pay, provisional tax, residual income tax, return of income, tax year,
Compare: 2004 No 35 s MB 13
RC 14 Paying 1 instalment for tax year
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Who this section applies to
(1) This section applies for a tax year to—
(a) a person with an initial provisional tax liability whose first business day occurs in the period that starts 30 days before the date of instalment D and ends at the end of the corresponding income year:
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(b) a person liable to pay provisional tax whose return of income for the preceding tax year is not provided on or before the date of instalment D if—
(i) they were required to provide a return for the preceding tax year but, under section 37 of the Tax Administration Act 1994 or an extension under that section, are not required to provide the return by the date of instalment D; and
(ii) their residual income tax for the tax year before the preceding tax year was $2,500 or less:
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(c) a person who pays GST on a 6-monthly basis if—
(i) their first business day occurs in the period that starts 30 days before the date of instalment C and ends at the end of the corresponding income year; or
(ii) they meet the requirements of paragraph (b)(i) and (ii) as if the reference to instalment D in paragraph (b)(i) were a reference to instalment C.
When instalment payable
(2) For the purposes of section RC 9(9)(c), the instalment is payable on the date of instalment F for the person’s corresponding income year.
Amount of instalment
(3) The amount of the instalment is calculated under section RC 10.
Defined in this Act: amount, corresponding income year, first business day, GST, initial provisional tax liability, pay, provisional tax, residual income tax, return of income, tax year,
Compare: 2004 No 35 s MB 14
Requirements for using GST ratio
RC 15 Choosing to use GST ratio
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A person who meets the requirements of section RC 16(2) and (3) for a tax year may choose to use a GST ratio for the corresponding income year if they inform the Commissioner of their election before the start of the income year.
Defined in this Act: Commissioner, corresponding income year, GST ratio, tax year,
Compare: 2004 No 35 s MB 16
RC 16 Who may use GST ratio?
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General eligibility
(1) A person liable to pay provisional tax may choose to use a GST ratio to determine under section RC 5(6) the amount of provisional tax payable for a tax year only if they meet all the requirements of subsections (2) and (3) in relation to the same entity.
Requirements for preceding tax year
(2) For the purposes of determining their eligibility for a tax year, the person must meet the following requirements in the preceding tax year:
(a) their residual income tax, as calculated, was more than $2,500 but no more than $150,000; and
(b) they were a registered person for the whole tax year, and provided a return under the Goods and Services Tax Act 1985 for an entity whose taxable activity did not begin operations in that tax year; and
(c) the ratio of their residual income tax to total taxable supplies, as calculated under section RC 11 and expressed as a percentage, is between zero and 100%.
Requirement for current year
(3) For the tax year in which the person uses a GST ratio, they must be liable to file a return under the Goods and Services Tax Act 1985 for a 2-month or a 1-month period under section 15(1)(b) and (c) of that Act.
When election applies
(4) A person’s election under section RC 15 to use a GST ratio applies for the tax year for which the election is made and in later tax years, unless the person changes their calculation method under RC 18.
References to preceding tax year
(5) In this section, a reference to a preceding tax year includes a reference to the tax year before the preceding tax year if that earlier tax year is used for the purposes of calculating a GST ratio.
Defined in this Act: amount, GST ratio, pay, provisional tax, registered person, residual income tax, tax year, taxable activity, total taxable supplies,
Compare: 2004 No 35 s MB 15(1)–(4), (11)
RC 17 When GST ratio must not be used
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Requirement to discontinue use of GST ratio
(1) Despite section RC 16, a person must stop using a GST ratio for a tax year and must apply section RC 18(4) or (5) if—
(a) their GST registration ends under section 52 of the Goods and Services Tax Act 1985 in the tax year; or
(b) they no longer qualify under section RC 16(2) as a result of an amended assessment of their income tax liability or their GST liability for the preceding tax year; or
(c) they no longer qualify under section RC 16(3) as a result of a change in their taxable period.
No GST return
(2) A person must not use, or must stop using, a GST ratio for a tax year if they—
(a) are liable to provide a return under the Goods and Services Tax Act 1985 for a period in their corresponding income year; and
(b) do not file the return within 60 days after the due date for filing the return.
Instalments following default
(3) A person who is required by subsection (2) to stop using a GST ratio must pay the provisional tax instalments required under section RC 18 for an instalment period beginning on or after the due date for filing the return referred to in subsection (2) that is not the subject of notification under subsection (4).
Further use of GST ratio
(4) Despite subsections (2) and (3), a person may use a GST ratio for an instalment period referred to in subsection (3) if—
(a) they apply to the Commissioner; and
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(b) the Commissioner considers—
(i) the failure to file the return is caused by an event or circumstance beyond the person’s control; and
(ii) the event or circumstance provides reasonable justification or excuse for the failure; and
(iii) the person remedied the failure as soon as practicable; and
(c) the Commissioner notifies the person that they may use the GST ratio for the instalment period.
Standard required
(5) For the purposes of subsection (4)(b), the Commissioner must use the same approach that would be used to justify the remission of a penalty under section 183A of the Tax Administration Act 1994.
Later default
(6) Notification under subsection (4) does not apply to an instalment period if—
(a) the person fails to file a return due after the date of the notice unless the failure is anticipated and referred to in the notice; and
(b) the instalment period begins on or after the due date of the return described in paragraph (a).
Defined in this Act: assessment, Commissioner, corresponding income year, GST ratio, income tax liability, notify, pay, provisional tax, tax year, taxable period,
Compare: 2004 No 35 s MB 15(5)–(10)
RC 18 Changing calculation method
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When this section applies
(1) This section applies if, after having chosen to use a GST ratio for a tax year, a person liable to pay provisional tax either—
(a) chooses another way to calculate the amount of provisional tax payable for the tax year; or
(b) is required under section RC 17(1) or (2) to stop using a GST ratio for the corresponding income year.
Informing Commissioner of decision to change
(2) The person must inform the Commissioner of their decision under subsection (1)(a), and may do this either in writing or by telephone. Subsection (3) or (4) then applies for the remaining instalments of provisional tax for the tax year.
Date on which use of GST ratio stopped
(3) For the purposes of subsection (1)(b), the date on which the person stops using a GST ratio is, as applicable,—
(a) the date their GST registration ends; or
(b) the date of the amended assessment of their income tax liability or GST liability for the preceding tax year; or
(c) the effective date of a change in taxable period; or
(d) the last day of the period in which a return is liable to be provided under the Goods and Services Tax Act 1985.
Changing method before date of instalment A
(4) If the person is unable or decides not to use a GST ratio before the date of instalment A, they may choose to determine the amount of provisional tax payable under section RC 5(2), (3) or (5), as if the election to use the GST ratio had not been made.
Changing method after instalment date
(5) If the person is unable or decides not to use the GST ratio after an instalment date, they must determine the amount of provisional tax payable on instalment for the remainder of the income year under section RC 5(5) using the estimation method. For this purpose, the person may provide the estimate in writing or by telephone.
Date of application when method changed
(6) If the person changes their calculation method under subsection (4) or (5), the date on which the change applies may be a future date agreed between the person and the Commissioner.
Other consequences of changing method
(7) For the purposes of this section,—
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(a) the number of instalments and the instalment dates remaining for an income year depend on—
(i) the requirements of the method chosen by the person when they stop using the GST ratio; and
(ii) the cycle of taxable periods chosen by the person, being either a monthly or 2-monthly basis:
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(b) a person may change from using a GST ratio to a 6-monthly cycle of taxable periods only if—
(i) the requirements of section 15C of the Goods and Services Tax Act 1985 are met; and
(ii) their 6-month taxable period is aligned with their balance date under section 15B of the Goods and Services Tax Act 1985:
(c) section 120KE(5) to (7) of the Tax Administration Act 1994 applies in deciding whether use of money interest is payable in relation to instalments under the new method.
Defined in this Act: amount, assessment, balance date, Commissioner, corresponding income year, GST ratio, income tax liability, income year, instalment date, pay, provisional tax, tax year, taxable period,
Compare: 2004 No 35 s MB 17
RC 19 Disposal of assets
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When this section applies
(1) This section applies if, as part of the taxable activity of an entity referred to in section RC 16(2) and (3), a person who is liable to pay provisional tax, disposes of an asset—
(a) that is not revenue account property; and
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(b) the value of the supply of which is not less than the greater of—
(i) an amount equal to 5% of the total taxable supplies of the business for the previous 12 months; or
(ii) $1,000.
Adjustment to GST ratio for current and next income year
(2) The person may choose to take the disposal of the asset into account by adjusting their taxable supplies for the relevant taxable period and income year. The adjustment must be made to both—
(a) the amount of their total taxable supplies for the purposes of the formula in section RC 11(1), by subtracting an amount that equals the value of the supply of the asset (as determined under 10 of the Goods and Services Tax Act 1985) plus the GST on the supply from the amount of taxable supplies for the relevant income year or taxable period; and
(b) the base amount of the their total taxable supplies for the next income year, by subtracting the amount that equals the value of the supply of the asset and the GST on the supply referred to in paragraph (a) from total taxable supplies in working out the GST ratio under section RC 8(2).
Informing Commissioner
(3) For the purposes of subsection (2), the person must inform the Commissioner of both the disposal of the asset and the value of its supply, and may do this either in writing or by telephone.
Rounding percentages
(4) In the determination of the value of the supply of the asset under subsection (1)(b)(i), the amount must be rounded to a whole percentage number.
Defined in this Act: amount, base amount, business, Commissioner, GST, GST ratio, income year, pay, provisional tax, revenue account property, taxable activity, taxable period, taxable supply, total taxable supplies,
Compare: 2004 No 35 s MB 18
Transitional years
RC 20 Calculating residual income tax in transitional years
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Calculation for transitional year
(1) This section applies for the purposes of section RC 5(2) and (3) and the calculation of a person’s residual income tax for a tax year if—
(a) the preceding tax year is a transitional year:
(b) the tax year before the preceding tax year is a transitional year.
Amount increased or decreased
(2) The amount of residual income tax for the transitional year must be increased or decreased by the amount calculated under subsection (3) to reflect the amount that would apply in a 12-month period.
Formula
(3) The amount of residual income tax is calculated using the formula—
Definition of items in formula
(4) In the formula,—
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(a) residual income tax is a person’s residual income tax, as applicable—
(i) for the preceding tax year, uplifted by 5%; or
(ii) for the tax year before the preceding tax year, uplifted by 10%; or
(iii) the amount estimated by them:
(b) days in current tax year is the number of days in the current tax year:
(c) days in transitional year is the number of days in the person’s transitional year.
Defined in this Act: amount, residual income tax, tax year, transitional year,
Compare: 2004 No 35 s MB 19
RC 21 Paying provisional tax in transitional years
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Total amount payable
(1) A person liable to pay provisional tax in a transitional year must pay the sum of all instalments of provisional tax payable for the transitional year, both interim instalments under subsection (2) and a final instalment under subsection (3).
When instalments payable
(2) The person must pay an instalment other than a final instalment on—
(a) the 28th day of the months set out in schedule 3, part B (Payment of provisional tax and terminal tax) unless paragraph (b) applies:
(b) the 15th day of January, when the month set out in schedule 3, part A is December.
When final instalment payable
(3) The person must pay the final instalment on—
(a) the 28th day of the month following the final month in the transitional year; or
(b) the 15th day of January, when November is the final month.
Modifications to instalment dates
(4) For the purposes of subsection (2), provisional tax is not payable on—
(a) the date of instalment B, if section RC 13 would have applied if the year were not a transitional year; or
(b) the dates of instalments B and D, if section RC 14(1)(a) and (b) would have applied if the year were not a transitional year; or
(c) the dates of instalments B, D, and F, if the person liable to pay provisional tax is a person with an initial provisional tax liability whose first business day occurs within 30 days of the date of instalment F; or
(d) the date of instalment C, if section RC 14(1)(c) would have applied if the year were not a transitional year; or
(e) the dates of instalments C and F, if the person liable to pay provisional tax is a person with an initial provisional tax liability who pays GST on a 6-monthly basis whose first business day occurs after the day that is 30 days before the date of instalment F.
Counting months in transitional years
(5) In this section, and in sections RC 22 to RC 25, and in schedule 3, part B, the number of months in a transitional year is determined as follows:
(a) the first month in a person’s transitional year is the first whole month in the transitional year:
(b) the final month in a person’s transitional year is the month in which their new balance date under section 39 of the Tax Administration Act 1994 occurs:
(c) each month falling between the first and final months must be included in determining the length of the transitional year.
Defined in this Act: balance date, final instalment, first business day, GST, initial provisional tax liability, pay, provisional tax, transitional year, year,
Compare: 2004 No 35 s MB 20
RC 22 Calculating instalments in transitional years: standard method
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When this section applies
(1) This section applies to a person liable to pay provisional tax using the standard method in relation to instalments of provisional tax payable in a transitional year under section RC 21.
Instalment other than final instalment
(2) For an instalment date other than the date of the final instalment, the person must pay an amount calculated using the formula—
Definition of items in formula
(3) In the formula in subsection (2),—
(a) person’s provisional tax is the person’s provisional tax liability under section RC 5(2) or (3):
(b) instalments payable is the number of instalments that the person has in the transitional year on or before the instalment date:
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(c) total instalments is whichever of the following applies:
(i) 3, for a person who pays on instalment dates B, D, and F; or
(ii) 2, for a person who pays on instalment dates C and F:
(d) tax previously payable is the amount for the transitional year of the person’s provisional tax payable before the instalment date.
Final instalment
(4) For the final instalment, the person must pay an amount calculated using the formula—
Definition of items in formula
(5) In the formula in subsection (4),—
(a) person’s provisional tax is the person’s provisional tax liability under section RC 5(2) or (3):
(b) transitional year days is the number of days in the person’s transitional year:
(c) preceding year days is the number of days in the person’s preceding tax year:
(d) tax previously payable is the amount of provisional tax for a tax year calculated on the basis of the person’s transitional year that is payable before the instalment date.
Defined in this Act: amount, instalment date, final instalment, pay, provisional tax, tax year, transitional year,
Compare: 2004 No 35 s MB 21
RC 23 Calculating instalments in transitional years: estimation method
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When this section applies
(1) This section applies to a person liable to pay provisional tax using the estimation method in relation to instalments of provisional tax payable in a transitional year under section RC 21.
Instalment other than final instalment
(2) For an instalment date other than the date of the final instalment, the person must pay an amount calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) tax estimate is the person’s provisional tax liability last estimated by the person under section RC 5(5):
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(b) instalments payable is either—
(i) 4 multiplied by the number of instalments in the person’s transitional year payable on or before the instalment date, for a person who pays on the equivalent of instalment dates B, D, and F; or
(ii) 6 multiplied by the number of instalments in the person’s transitional year payable on or before the instalment date, for a person who pays on the equivalent of instalment dates C and F:
(c) transitional months is the number of months in the person’s transitional year:
(d) tax previously payable is the amount of provisional tax for a tax year calculated on the basis of the person’s transitional year that is payable before the instalment date.
Final instalment
(4) For the final instalment, the person must pay the amount calculated under section RC 5(5) less the amount of any instalment previously payable.
Defined in this Act: amount, final instalment, instalment date, pay, provisional tax, tax year, transitional year,
Compare: 2004 No 35 s MB 22
RC 24 Calculating instalments in transitional years: GST ratio method
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What this section applies to
(1) This section applies to a person liable to pay provisional tax using a GST ratio in relation to instalments of provisional tax payable in a transitional year.
Adjustment if required
(2) For a period or part period before the start of the new income year, the person must apply the GST ratio under section RC 11 on whichever dates of instalments A to F for their corresponding income year occur in the transitional year.
Defined in this Act: corresponding income year, GST ratio, income year, pay, provisional tax, transitional year,
Compare: 2004 No 35 s MB 23
RC 25 Consequences of change in balance date
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Continuing frequency
(1) This section applies to a person liable to pay provisional tax who changes their balance date.
Continuing to use instalment dates to new balance date
(2) The person must continue to use the instalment dates that applied before the change in balance date was approved until the new balance date is reached.
How amounts determined
(3) Sections RC 20 to RC 24 and schedule 3, part B (Payment of provisional tax and terminal tax) apply for the person’s transitional year to determine the amount and payment date of the instalments.
Estimation method
(4) In a transitional year, if the person uses the estimation method, they must,—
(a) before the date on which the Commissioner notifies a change in balance date, estimate the residual income tax as if no change in balance date is or will be approved; and
(b) after the date on which the Commissioner notifies a change in balance date, re-estimate the residual income tax.
GST ratio method
(5) Subsection (6) applies if the person uses a GST ratio to determine the provisional tax payable for a tax year, and in changing their balance date, moves from—
(a) a set of instalment dates in even-numbered months to a set of instalment dates in odd-numbered months; or
(b) a set of instalment dates in odd-numbered months to a set of instalment dates in even-numbered months.
Adjustment to liability
(6) The person must adjust their provisional tax liability for the income year for the part-period of 1 month before the start of the new income year. The part-period is their final taxable period, and the instalment of provisional tax is payable 28 days after the end of that period.
Aligning taxable periods
(7) For a registered person, if a change in balance date means that their taxable period is not aligned with the balance date, an adjustment must be made to their taxable period under section 15B(3) or 15C of the Goods and Services Tax Act 1985.
Defined in this Act: amount, balance date, Commissioner, GST ratio, income year, instalment date, notify, pay, provisional tax, registered person, residual income tax, tax year, taxable period, transitional year,
Compare: 2004 No 35 s MB 24
When persons start or stop paying GST, or change taxable periods
RC 26 Registering for GST or cancelling registration
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When this section applies
(1) This section applies if a person who uses the standard or estimation method to determine the amount of provisional tax payable for a tax year—
(a) applies to the Commissioner to become a registered person under section 51 of the Goods and Services Tax Act 1985; or
(b) is treated as registered under section 51B of that Act; or
(c) asks the Commissioner to cancel their GST registration, or has their GST registration cancelled under section 52 of that Act.
Starting or ending GST registration: monthly or 2-monthly basis
(2) For a person liable to pay provisional tax who becomes registered for GST paying on a monthly or 2-monthly basis, or who cancels or has their GST registration cancelled having paid on that basis, the instalments of provisional tax payable by them for the tax year are unaffected.
Starting GST registration: 6-monthly basis
(3) A person liable to pay provisional tax who becomes registered for GST paying on a 6-monthly basis must pay their instalments of provisional tax on whichever dates of instalments C and F for their corresponding income year coincide with the cycle of their taxable periods after they become a registered person.
Ending GST registration: 6-monthly basis
(4) A person liable to pay provisional tax who pays GST on a 6-monthly basis and cancels their GST registration or has their registration cancelled, must pay their instalments of provisional tax on whichever dates of instalments B, D, and F for their corresponding income year occur after 30 days from the date of cancellation.
Date of cancellation
(5) For the purposes of subsection (4) and the provisional tax rules, the date of cancellation is the date on which the cancellation of GST registration is notified.
Formula for amount of instalment
(6) The amount of each instalment is calculated under section RC 10.
Defined in this Act: amount, Commissioner, corresponding income year, GST, pay, provisional tax, provisional tax rules, registered person, tax year, taxable period,
Compare: 2004 No 35 s MB 25
RC 27 Payment of provisional tax instalments when GST cycle changed
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When subsection (2) applies
(1) Subsection (2) applies in a tax year to a person liable to pay provisional tax who—
(a) uses the standard or estimation method to determine the amount of provisional tax payable; and
(b) has been paying GST on a monthly or 2-monthly basis; and
(c) changes to a 6-monthly basis under section 15C(1) of the Goods and Services Tax Act 1985.
Changing to 6-monthly basis
(2) The person must pay their instalments of provisional tax on whichever dates of instalments C and F for their corresponding income year occur after the change in taxable period takes effect.
When subsection (4) applies
(3) Subsection (4) applies in a tax year to a person liable to pay provisional tax who—
(a) uses the standard or estimation method to determine the amount of provisional tax payable; and
(b) has been paying GST on a 6-monthly basis; and
(c) changes to a monthly or 2-monthly basis under section 15C(2) or (3) of the Goods and Services Tax Act 1985.
Changing to monthly or 2-monthly basis
(4) The person must pay their instalments of provisional tax on whichever dates of instalments B, D, and F for the person’s corresponding income year occur after the change in taxable period takes effect.
Interest instalment dates in new cycle
(5) If an instalment of provisional tax that falls on an instalment date in the new cycle is payable in relation to a period in the person’s original cycle that was, under that original cycle, an interest instalment date, it remains an interest instalment date in the new cycle. However, if the instalment falls on an instalment date other than an interest instalment date, the change does not affect the nature of the instalment.
Formula for amount of instalment
(6) The amount of each instalment is calculated under section RC 10.
Defined in this Act: amount, corresponding income year, GST, instalment date, interest instalment date, pay, provisional tax, tax year, taxable period,
Compare: 2004 No 35 s MB 27
Treatment of groups of companies and amalgamated companies
RC 28 Provisional tax rules and consolidated groups
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Single company
(1) The provisional tax rules apply, modified as necessary, to a consolidated group of companies as if it were a single company.
Joint and several liability
(2) Each company in a consolidated group in a tax year is jointly and severally liable for the amount of provisional tax payable by the consolidated group to be credited against the income tax liability of the group for the tax year. The liability of a group company for income tax for the tax year is substituted by that joint and several liability to the extent to which the liability arises while the company is part of the consolidated group.
Relationship with section FM 4
(3) Section FM 4(3) to (5) (Limiting joint and several liability of group companies) overrides this section.
Defined in this Act: amount, company, consolidated group, income tax, income tax liability, pay, provisional tax, provisional tax rules, tax year,
Compare: 2004 No 35 s MB 29
RC 29 Residual income tax of consolidated groups
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When this section applies
(1) This section applies for the purposes of the provisional tax rules if a company is part of a consolidated group of companies in a tax year but was not part of the group for some or all of the preceding tax year.
Increased residual income tax
(2) The residual income tax of the consolidated group for the preceding tax year is treated as increased by an amount equal to the residual income tax of the company for the preceding tax year. If the company is part of the group for part of the current tax year, the amount of residual income tax is increased as a proportion on the basis of the part of the tax year during which the company is part of the group.
Instalments after company joins group
(3) If the company is part of a group for part of the tax year, this section applies only to instalments of provisional tax payable after the date on which the company becomes part of the group.
Defined in this Act: amount, company, consolidated group, pay, provisional tax, provisional tax rules, residual income tax, tax year,
Compare: 2004 No 35 s MB 30
RC 30 Consolidated groups using estimation method
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When subsection (2) applies
(1) Subsection (2) applies for the purposes of the provisional tax rules if a company is part of a consolidated group of companies for some or all of a tax year but is not part of the group for some or all of the following tax year.
Estimation before final instalment date
(2) The company must estimate its residual income tax on or before the date of instalment F for the following income year that corresponds to the tax year, and the company is treated as a person to which section RC 7 applies for the purposes of its estimate.
When company part of another consolidated group
(3) The consolidated group, in the case of a company that is part of another consolidated group, must make an estimate of residual income tax on or before the date of instalment F for the following income year that corresponds to the tax year, and the consolidated group is treated as a person to which section RC 7 applies for the purposes of its estimate.
When company no longer part of group
(4) If a company stops being part of the consolidated group in the following tax year, the company’s estimate applies only to instalments of provisional tax payable after the date on which it stopped being part of the group.
Defined in this Act: company, consolidated group, corresponding income year, pay, provisional tax, provisional tax rules, residual income tax, tax year,
Compare: 2004 No 35 s MB 31
RC 31 Consolidated groups using GST ratio method
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Sections RC 8, RC 9(6), RC 11, and RC 15 to RC 19 apply to a consolidated group of companies with the following modifications:
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(a) if a consolidated group that is eligible to use, or is using, a GST ratio for a tax year is joined by a company, the following subparagraphs apply:
(i) if the company joins at the start of the tax year and, as a result, the threshold in section RC 16(2)(a) is exceeded, the group is no longer eligible to use a GST ratio:
(ii) if the company joins at the start of the tax year, and the group, allowing for the inclusion of the company, is eligible under section RC 16(1), the group may use a GST ratio, subject to the recalculation of the ratio under paragraph (c):
(iii) if the company joins at some time in the tax year, the group may continue to use a GST ratio for the tax year, as recalculated under paragraph (c), provided the requirements for eligibility other than the threshold in RC 16(2)(a) are met:
(b) if a consolidated group that does not determine provisional tax payable for a tax year using a GST ratio, is joined by a company that is using a GST ratio for the tax year, the group may not start using a GST ratio for this purpose for the tax year:
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(c) for the purposes of paragraph (a),—
(i) the group must recalculate the GST ratio applying for a tax year to include the residual income tax of the company for the preceding tax year and the total taxable supplies of the company for the corresponding income year, applying section RC 8(3) if required; and
(ii) the recalculated GST ratio applies to provisional tax payments made for the corresponding income year on or after the date on which the company joins the group:
(d) sections RC 17(3) and RC 18(4) or (5), as applicable, apply to a company that leaves a consolidated group at some time in a tax year.
Defined in this Act: company, consolidated group, corresponding income year, GST ratio, pay, provisional tax, residual income tax, tax year, total taxable supplies,
Compare: 2004 No 35 s MB 32
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RC 32 Wholly-owned groups of companies
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When this section applies
(1) This section applies for the purposes of the provisional tax rules and Part 7 of the Tax Administration Act 1994 in relation to a company (company A) that is in a tax year part of a wholly-owned group of companies that includes another company (company B). Sections RM 13 to RM 17 (which relate to refunds) override this section.
Company A transferring overpayment to company B
(2) If, for a tax year, company A has paid an amount that is more than the provisional tax payable for the tax year, the company may transfer some or all of the overpayment to company B to the extent to which the amount of provisional tax paid by company B is less than their residual income tax for the tax year. Company A must notify the Commissioner under subsection (4).
When transfer made
(3) Company A may transfer an amount under subsection (2) on or after the later of—
(a) the day on which company A overpays the provisional tax; or
(b) the day on which the first instalment of provisional tax for the tax year becomes payable by company B.
Notice
(4) A notice under subsection (2) must—
(a) name company B, and the amount to be transferred; and
(b) state the date on which the overpayment is treated as transferred to company B; and
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(c) be given to the Commissioner within—
(i) the time for providing a return of income for the tax year for company B; or
(ii) an extension of time allowed by the Commissioner.
When transfer made, and how transfer treated
(5) For the purposes of this section,—
(a) a transfer under subsection (2) is treated as made on the date stated in the notice; and
(b) provisional tax transferred by company A to company B is treated as provisional tax paid by company B and not by company A.
Defined in this Act: amount, Commissioner, company, notice, notify, pay, provisional tax, provisional tax rules, residual income tax, return of income, tax year, wholly-owned group of companies,
Compare: 2004 No 35 s MB 33
RC 33 Amalgamated companies: calculating residual income tax
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When this section applies
(1) This section applies for a tax year when an amalgamating company ends its existence on an amalgamation.
Residual income tax for preceding tax year
(2) The residual income tax of the amalgamated company for the preceding tax year is the amount that would have been the residual income tax of the amalgamated company for the preceding tax year if the amalgamating company and the amalgamated company had been 1 company.
Exclusion
(3) Subsection (2) does not apply for the purposes of the provisional tax rules in relation to instalments of provisional tax payable before the amalgamation.
Defined in this Act: amalgamated company, amalgamating company, amalgamation, amount, pay, provisional tax, provisional tax rules, residual income tax, tax year,
Compare: 2004 No 35 s MB 34
Attribution rule for income from personal services
RC 34 Attribution rule for income from personal services
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When this section applies
(1) This section applies for the purposes of the provisional tax rules and Part 7 of the Tax Administration Act 1994 for provisional tax paid for income from personal services to which section GB 27 (Attribution rule for income from personal services) may apply.
Person B transferring amount to person C
(2) If, in a tax year, person B pays an amount that is more than the provisional tax payable for the tax year, person B may transfer some or all of the overpayment to person C to the extent to which the amount of provisional tax paid by person C is less than their residual income tax for the tax year.
Person C transferring amount to person B
(3) If, in a tax year, person C pays an amount of tax that is more than the provisional tax payable for the tax year, person C may transfer some or all of the overpayment to person B to the extent to which the amount of provisional tax paid by person B is less than their residual income tax for the tax year.
When transfer made
(4) Persons B and C may transfer an amount under subsection (2) or (3) on or after the later of—
(a) the day on which the overpayment of provisional tax is paid by person B or person C, as applicable; or
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(b) the day on which the first instalment of provisional tax payable for the tax year becomes payable by—
(i) person C, if person B is making the transfer; or
(ii) person B, if person C is making the transfer.
Notice
(5) The Commissioner must be notified of a transfer under subsection (2) or (3) in a notice that—
(a) names the person to whom a transfer is made, and the amount to be transferred; and
(b) states the date on which the overpayment is treated as transferred to person B or person C, as applicable; and
(c) is provided within the time for providing a return of income for the tax year for the person to whom the transfer is made, or an extended time allowed by the Commissioner.
When transfer made and how transfer treated
(6) For the purposes of this section,—
(a) a transfer under subsection (2) or (3) is treated as made on the day stated in the notice; and
(b) provisional tax transferred by person B to person C for a tax year is treated as provisional tax paid by person C and not by person B; and
(c) provisional tax transferred by person C to person B is treated as provisional tax paid by person B and not by person C.
Defined in this Act: amount, Commissioner, income, notice, notify, pay, provisional tax, provisional tax rules, residual income tax, return of income, tax year,
Compare: 2004 No 35 s MB 35
Credits
RC 35 Further income tax credited to provisional tax liability
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When this section applies
(1) This section applies for the purposes of sections RC 9 to RC 11 if, under sections OB 65 to OB 69 (which relate to further income tax for ICA companies), a company applies an amount of further income tax to pay an instalment of provisional tax for which the company becomes liable after the date of payment of the further income tax.
Amount treated as provisional tax
(2) The instalment is satisfied to the extent of the amount of further income tax. The amount is treated as provisional tax paid on the date on which the instalment was payable.
Order
(3) The Commissioner must credit the amount of the further income tax in payment successively of—
(a) the instalment of provisional tax that is first payable after the date of payment of the further income tax; and
(b) to the extent of the amount of further income tax, to later instalments in the order in which they are payable.
Defined in this Act: amount, Commissioner, company, further income tax, ICA company, pay, provisional tax,
Compare: 2004 No 35 s MB 37
Disaster relief
RC 36 Persons affected by adverse events
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Who this section applies to
(1) This section applies to a person liable to pay provisional tax who has a business and is significantly affected by a self-assessed adverse event or qualifying event. This section overrides section RC 7.
Person’s request
(2) The person may ask the Commissioner to accept an estimate or a revised estimate of the residual income tax payable by them for a tax year.
Acceptance of estimate
(3) The Commissioner may accept an estimate or revised estimate described in subsection (2) if all the following requirements are met:
(a) the business is significantly affected by the self-assessed adverse event or qualifying event; and
(b) it is not reasonable to require the person to provide under section RC 7 an estimate or revised estimate of residual income tax payable by them for the tax year; and
(c) the basis on which the person has chosen to pay provisional tax is now inappropriate; and
(d) the person asks to revise their estimate as soon as practicable.
Treatment of revised estimate
(4) If a revised estimate is accepted under subsection (3), it is treated as the estimate applying on the date of instalment F.
Defined in this Act: business, Commissioner, pay, provisional tax, qualifying event, residual income tax, self-assessed adverse event, tax year,
Compare: 2004 No 35 s MB 38
Early-payment discounts
RC 37 Availability of early-payment discounts
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Sections RC 38 and RC 39 apply for an income year to a small-business person who is not liable to pay provisional tax for the income year and, for earlier income years,—
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(a) has never been liable to pay provisional tax and either—
(i) has never received an early-payment discount; or
(ii) has not derived assessable income from a business in a period of 4 income years starting after the latest income year for which they received an early-payment discount; or
(b) has not derived assessable income from a business in a period of 4 income years starting after the latest income year for which they were liable to pay provisional tax.
Defined in this Act: assessable income, business, early-payment discount, income year, pay, provisional tax, small-business person,
Compare: 2004 No 35 s MBB 2(1)(a), (d)
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RC 38 Crediting income tax with early-payment discount
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When this section applies
(1) This section applies when a small-business person—
(a) pays income tax on or before their balance date for the income year; and
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(b) during the period from the balance date for the income year to their terminal tax date for the income year, has a credit in their tax account with the Commissioner that is greater than or equal to the lesser of—
(i) the total amount paid under paragraph (a):
(ii) the amount that would be their terminal tax for the income year in the absence of this section; and
(c) files a return of income for the tax year corresponding to the income year; and
(d) applies for an early-payment discount on or before the last date for filing a return of income under section 37(5) of the Tax Administration Act 1994.
Crediting early-payment discount
(2) The Commissioner must credit the tax account of the small-business person with an early-payment discount calculated under subsection (3).
Amount of early-payment discount
(3) The amount of the early-payment discount is found by multiplying the discount rate under subsection (4) by the lesser of—
(a) the total amount paid under subsection (1)(a):
(b) 105% of the small-business person’s residual income tax for the income year.
Discount rate
(4) The discount rate is—
(a) 6.7%, if no rate is set under paragraph (b):
(b) the rate set by the Governor-General by Order in Council.
Defined in this Act: amount, balance date, Commissioner, corresponding income year, early-payment discount, income, income tax, income year, pay, residual income tax, return of income, small-business person, tax account with the Commissioner, tax year, terminal tax,
Compare: 2004 No 35 s MBB 2(1)(b), (c), (2)–(4)
RC 39 Credit treated as payment of income tax
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A credit of an early-payment discount under section RC 38 is treated as a payment made by a small-business person on the day after the last day of the income year referred to in section RC 38 as income tax for the income year.
Defined in this Act: early-payment discount, income tax, income year, pay, small-business person,
Compare: 2004 No 35 s MBB 3
RC 40 Some definitions
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In this subpart,—
early-payment discount means a discount of income tax under sections RC 38 and RC 39
small-business person means a person who—
(a) conducts a business on their own account, acting alone or as a partner in a partnership; and
(b) does not use a company or a trust in the conduct of the business; and
(c) derives income that is mainly from the business, and does not consist of interest, dividends, royalties, rent, or beneficiary income.
Defined in this Act: beneficiary income, business, company, dividend, income, income tax, interest, royalty,
Compare: 2004 No 35 s MBB 4
Subpart RD—Employment-related taxes
Introductory provision
RD 1 What this subpart does
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This subpart establishes and measures an employer’s liability under—
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(a) the PAYE rules by—
(i) listing the types of payments to which the rules apply:
(ii) calculating the amounts of tax that must be withheld and paid to the Commissioner under the rules:
(iii) providing for certain adjustments to the amounts:
(iv) providing some rules related to the payment of the amounts:
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(b) the FBT rules by—
(i) calculating the value of the benefit provided:
(ii) attributing certain fringe benefits to employees:
(iii) setting out the taxable value of certain fringe benefits:
(iv) providing options for the payment of FBT to the Commissioner:
(c) the ESCT rules by setting out the payments to which the rules apply and calculating the amounts of tax that must be withheld and paid to the Commissioner under the rules.
Defined in this Act: amount of tax, Commissioner, employee, employer, ESCT rules, FBT, FBT rules, fringe benefit, fringe benefit tax, pay, PAYE rules,
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PAYE rules and PAYE income payments
Introductory provisions
RD 2 PAYE rules and their application
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Meaning
(1) The PAYE rules means—
(a) section BC 1 (Non-filing and filing taxpayers); and
(b) sections LA 6 (Remaining refundable credits: PAYE, RWT, and certain other items) and LB 1 (Tax credits for PAYE income payments); and
(c) sections RD 3 to RD 24; and
(d) sections RP 2 to RP 16 (which relate to PAYE intermediaries); and
(e) sections 15C to 15M, 24, 24B to 24P, 48, and 133, Part 9, and sections 167 to 169 of the Tax Administration Act 1994.
Application
(2) The PAYE rules apply to a person who makes or is required to make a PAYE income payment and, in certain circumstances, to the person to whom the PAYE income payment is made.
Deceased employers
(3) The executor or administrator of a deceased employer must complete any uncompleted PAYE obligations of the employer.
Defined in this Act: employer, PAYE income payment, PAYE rules,
Compare: 2004 No 35 ss NC 15(4), OB 1 PAYE rules
RD 3 PAYE income payments
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Meaning generally
(1) The PAYE rules apply to a PAYE income payment which—
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(a) means—
(i) a payment of salary or wages, seesection RD 5; or
(ii) extra pay, seesection RD 7; or
(iii) a schedular payment, seesection RD 8:
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(b) does not include—
(i) an amount attributed under section GB 29 (Attribution rule: calculation):
(ii) an amount paid to a shareholder-employee in the circumstances set out in subsection (2).
When subsections (3) and (4) apply: close companies
(2) Subsections (3) and (4) apply for an income year when a person is a shareholder-employee of a close company, and—
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(a) they do not derive as an employee salary or wages of a regular amount for regular pay periods—
(i) of 1 month or less throughout the income year; or
(ii) that total 66% or more of the annual gross income of the person in the corresponding tax year as an employee; or
(b) an amount is paid as income that may later be allocated to them as an employee for the income year.
Income in current tax year
(3) The person may choose that an amount paid to them in the income year in their capacity as employee of the close company is not a PAYE income payment.
Income in later tax years
(4) The person may choose that an amount that they derive in a later income year in their capacity as an employee of the close company is treated as income derived otherwise than from a PAYE income payment.
If questions arise
(5) If a question arises whether the PAYE rules apply to all or part of a PAYE income payment, other than an amount referred to in subsections (2) to (4), the Commissioner must determine the matter.
Defined in this Act: amount, annual gross income, close company, Commissioner, employee, extra pay, income, income year, pay, pay period, PAYE income payment, PAYE rules, salary or wages, schedular payment, shareholder-employee, tax year,
Compare: 2004 No 35 ss NC 1(2), OB 2
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RD 4 Payment of amounts of tax to Commissioner
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Payments monthly or fortnightly
(1) An employer or PAYE intermediary who withholds an amount of tax for a PAYE income payment must pay the amount to the Commissioner as follows
(a) on a monthly basis, if they are an employer to whom section RD 22(3) or (4) applies:
(b) for 2 payment periods in a month, if paragraph (a) does not apply.
Liability when amount not withheld
(2) If some or all of the amount of tax for a PAYE income payment is not withheld and paid under subsection (1), the employee in relation to whom the payment is made must—
(a) pay an amount equal to the amount of tax to the Commissioner by the 20th day of the month following that in which the PAYE income payment was made; and
(b) provide an employer monthly schedule to the Commissioner by the date described in paragraph (a).
When taxable activity ends
(3) Section RA 17 (Payment date when RWT exemption certificate expires) overrides subsection (1).
Defined in this Act: amount, amount of tax, Commissioner, employee, employer, employer monthly schedule, pay, PAYE income payment, PAYE intermediary,
Compare: 2004 No 35 ss NC 15(1), NC 16
Types of PAYE income payments
RD 5 Salary or wages
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Meaning
(1) Salary or wages—
(a) means a payment of salary, wages, or allowances made to a person in connection with their employment; and
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(b) includes—
(i) a bonus, commission, gratuity, overtime pay, or other pay of any kind; and
(ii) a payment described in subsections (2) to (7); and
(iii) an accident compensation earnings-related payment; and
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(c) does not include—
(i) an amount of exempt income:
(ii) an extra pay:
(iii) a schedular payment:
(iv) an amount of income described in section RD 3(3) and (4):
(v) an employer’s superannuation contribution:
(vi) a payment excluded by regulations made under this Act.
Employees’ expenditure on account
(2) A payment of expenditure on account of an employee is included in their salary or wages.
Payments to working partners
(3) A payment to a working partner under section DC 4 (Payments to working partners) is included in their salary or wages.
Payments to past employees
(4) A periodic payment of a pension, allowance, or annuity made to a person or their spouse, civil union partner, de facto partner, child, or dependant in connection with the past employment of the person is included in their salary or wages.
Payments to members of Parliament and judicial officers
(5) The following payments made under a determination of the Remuneration Authority are included in salary or wages
(a) salary or allowances made to a member of Parliament:
(b) salary and principal allowances made to a judicial officer.
Certain benefits and grants
(6) A payment of the following benefits or grants is included in salary or wages
(a) an amount of income under section CF 1 (Benefits, pensions, compensation, and government grants):
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(b) a payment of—
(i) an income-tested benefit; or
(ii) a veteran’s pension; or
(iii) New Zealand superannuation; or
(iv) a living alone payment:
(c) a basic grant and independent circumstances grant made under regulations made under section 193 of the Education Act 1964 or section 303 of the Education Act 1989.
Parental leave payments
(7) A parental leave payment made under Part 7A of the Parental Leave and Employment Protection Act 1987 is included in salary or wages.
Defined in this Act: accident compensation earnings-related payment, amount, de facto partner, employer’s superannuation contribution, employment, exempt income, expenditure on account of an employee, extra pay, income, income-tested benefit, living alone payment, New Zealand superannuation, pay, salary or wages, schedular payment, veteran’s pension,
Compare: 2004 No 35 s OB 1 salary or wages
RD 6 Certain benefits and payments
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When this section applies
(1) This section applies when an employee receives—
(a) a benefit under section CE 1(c) (Amounts derived in connection with employment) made in connection with their employment; or
(b) a benefit in kind that is included in their salary or wages; or
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(c) 1 or more of the following payments:
(i) a superannuation payment:
(ii) a pension:
(iii) a retiring or other allowance:
(iv) an annuity.
Value or amount included in salary or wages
(2) The value of the benefit or amount of the payment is treated as—
(a) accruing from day to day; and
(b) included in the employee’s salary or wages for the pay period or, as applicable, as part of their salary or wages for the pay period.
When non-cash benefit treated as paid
(3) If the employee receives the benefit otherwise than in cash, the value is treated as paid—
(a) for a benefit that constitutes the only salary or wages of the employee, on the last day of the pay period; or
(b) for all other benefits, when the last amount of salary or wages for the pay period is paid.
Defined in this Act: employee, employment, pay, pay period, salary or wages,
Compare: 2004 No 35 s NC 4
RD 7 Extra pay
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Meaning
(1) An extra pay—
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(a) means a payment that—
(i) is made to a person in connection with their employment; and
(ii) is not a payment regularly included in salary or wages payable to the person for a pay period; and
(iii) is not overtime pay; and
(iv) is made in 1 lump sum or in 2 or more instalments; and
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(b) includes a payment of the kind described in paragraph (a) made—
(i) as a bonus, gratuity, or share of profits; or
(ii) as a redundancy payment; or
(iii) when the person retires from employment; or
(iv) as a result of a retrospective increase in salary or wages, but only to the extent described in subsection (2); and
(c) includes an amount of income that a person derives under section CE 9 (Restrictive covenants) or CE 10 (Exit inducements) if the income is derived in connection with an employment relationship between the person and the person who paid the amount; and
(d) does not include a payment of exempt income.
Limit on retrospective increase in salary or wages
(2) A payment described in subsection (1)(b)(iv) is included in extra pay only to the extent to which,—
(a) it accrues from the start of the increase until the start of the first pay period in which the increase is included in salary or wages; and
(b) when a week ends with a Saturday, the total of the increase for the week, and of the salary or wages for the week excluding the increase, and of any other salary or wages that the person earns for the week, is more than $4.
Defined in this Act: amount, employment, exempt income, income, pay, pay period, salary or wages,
Compare: 2004 No 35 s OB 1 extra pay
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RD 8 Schedular payments
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Meaning
(1) A schedular payment—
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(a) means—
(i) a payment of a class set out in schedule 4 (Rates of tax for schedular payments); and
(ii) in relation to a sale, the net amount paid after subtracting from the purchase price all commission, insurance, freight, classing charges and other expenses incurred by the seller in connection with the sale; and
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(b) does not include—
(i) salary or wages; or
(ii) an extra pay; or
(iii) a payment for services provided by a public authority, a local authority, a Maori authority, or a company, other than a non-resident contractor, a non-resident entertainer, or an agricultural, horticultural, or viticultural company; or
(iv) a payment covered by an exemption certificate provided under section 24M of the Tax Administration Act 1994; or
(v) a payment for services provided by a non-resident contractor who does not have full relief from tax under a double tax agreement, and is present in New Zealand for 92 or fewer days in a 12-month period; or
(vi) a contract payment for a contract activity or service of a non-resident contractor when the total amount paid for those activities to the contractor or another person on their behalf is $15,000 or less in a 12-month period.
Protected payments
(2) The fact that a schedular payment may be protected against assignment or charge does not override a person’s obligation to withhold the amount of tax for the payment.
Determination of expenditure incurred
(3) The Commissioner may determine from time to time the amount or proportion of expenditure that a person incurs in deriving a particular schedular payment or class of schedular payments.
Defined in this Act: agricultural, horticultural, or viticultural company, amount, amount of tax, Commissioner, company, contract activity or service, contract payment, double tax agreement, exemption certificate, extra pay, local authority, Maori authority, New Zealand, non-resident contractor, non-resident entertainer, pay, public authority, salary or wages, schedular payment,
Compare: 2004 No 35 s NC 21(f)–(h), Income Tax (Withholding Payments) Regulations 1979, regulations 2, 4, 6–8
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Calculating amounts of tax
RD 9 Maximum amount
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When a person calculates an amount of tax for a PAYE income payment, they must use the maximum rate under schedule 2 (Basic tax rates for PAYE income payments) at the time for the payment and the person receiving the payment, unless this Act states otherwise.
Defined in this Act: amount of tax, pay, PAYE income payment,
Compare: 2004 No 35 s NC 6(1A), (3)
RD 10 Amounts of tax for PAYE income payments
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PAYE income payments other than schedular payments
(1) The amount of tax for a PAYE income payment that a person must withhold and pay to the Commissioner under section RA 5 (Tax obligations for employment-related taxes) is the relevant amount under schedule 2 (Basic tax rates for PAYE income payments). Subsections (2) and (3) and sections RD 12 to RD 20 override this subsection.
Choosing rate for extra pay
(2) An employee who notifies their employer of their tax code may choose to have the amount of tax for an extra pay fixed as follows
(a) for an employee whose taxable income for the income year is expected to be no more than $60,000, the rate set out in schedule 2, part B, table 1, row 2; or
(b) for other employees, the rate set out in schedule 2, part B, table 1, row 3.
Schedular payments
(3) The amount of tax for a schedular payment is determined—
(a) at the relevant rate set out in schedule 4 (Rates of tax for schedular payments); and
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(b) on the basis of the gross amount of the payment, whether—
(i) some or all of the payment is income; and
(ii) the full income tax liability lies with the person receiving the payment, or lies partly with an employee or subcontractor of the person.
Tax tables
(4) The Commissioner may provide tables for the calculation of an amount of tax for a PAYE income payment that may incorporate other relevant information.
Defined in this Act: amount, amount of tax, Commissioner, employee, employer, extra pay, gross, income, income tax liability, income year, notify, pay, PAYE income payment, schedular payment, tax code, taxable income,
Compare: 2004 No 35 ss NC 6, NC 8(1A), Income Tax (Withholding Payments) Regulations 1979, regulation 3
RD 11 Reduction in certain circumstances
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Special circumstances
(1) Despite sections RD 2 to RD 10, the Commissioner may, in special circumstances, reduce the amount of tax for a PAYE income payment to an employee or a class of employees. The PAYE rules then apply as if amended.
When schedule or regulations inapplicable
(2) If the amount of tax for a PAYE income payment cannot be determined under schedule 2 (Basic tax rates for PAYE income payments) or under regulations made under this Act because of the size of the PAYE income payment, or the number of the employee’s dependants, or for any other reason, the amount of tax for the payment must be determined by the Commissioner, taking into account the factors considered in fixing the amount of tax for other similar payments.
Income-tested benefits and education allowances
(3) The amount of tax for a PAYE income payment that is an income-tested benefit or an allowance paid under regulations made under section 303 of the Education Act 1989 must be determined by the Commissioner in consultation with the chief executive of the administering department or the Secretary of Education.
Defined in this Act: amount of tax, chief executive of the administering department, Commissioner, employee, income-tested benefit, PAYE income payment, PAYE rules,
Compare: 2004 No 35 ss NC 6(1C), (1D), NC 13
Adjustments for certain PAYE income payments
RD 12 Multiple payments of salary or wages
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When this section applies
(1) This section applies when an employee receives more than 1 payment of salary or wages in a week or part of a week that ends on a Saturday. The employment may relate to 1 or more employment situations.
When this section does not apply
(2) This section does not apply—
(a) when an employee leaves regular full-time employment before engaging in another regular full-time employment; or
(b) to salary or wages from employment as casual agricultural employee or an election-day worker.
Treatment as 1 payment
(3) The total amount of tax for all payments of salary or wages is the amount that would be required to be withheld if all the payments were treated as 1 payment made by 1 employer for the week.
Defined in this Act: amount of tax, casual agricultural employee, election-day worker, employee, employer, employment, pay, salary or wages,
Compare: 2004 No 35 s NC 10
RD 13 Advance payments of salary or wages
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When this section applies: increase in amount of tax
(1) This section applies when—
(a) an employee receives a payment of salary or wages from an employer; and
(b) the amount of tax under schedule 2 (Basic tax rates for PAYE income payments) for all or part of the payment is increased; and
(c) the payment is made before the date of the increase.
When this section applies: becoming subject to PAYE rules
(2) This section also applies when all or part of a payment of salary or wages becomes subject to the PAYE rules, but the payment is made before the date on which it becomes subject to the rules.
Addition to amount of tax for next payment
(3) The amount of the difference caused by the increase referred to in subsection (1)(b) is added to the amount of tax for the next payment of salary or wages made by the employer to the employee.
Defined in this Act: amount of tax, employee, employer, pay, PAYE rules, salary or wages,
Compare: 2004 No 35 s NC 11
RD 14 Changes to tax rates for salary or wages
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When subsection (2) applies
(1) Subsection (2) applies when a change occurs to the amounts of tax for PAYE income payments set out in schedule 2 (Basic tax rates for PAYE income payments).
Determining amount of tax
(2) The amount of tax for a payment of salary or wages for the pay period in which the change occurs is determined as follows
(a) for a pay period of 1 month or less, the amount of tax for the full payment for the pay period is the altered amount:
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(b) for a pay period of more than 1 month, the amount of tax is determined on the basis set out in schedule 2, clause 2, by—
(i) determining the proportionate parts of the payment before and after the change; and
(ii) calculating each part of the relevant amount of tax; and
(iii) adding together the relevant amounts of tax.
When subsection (4) applies
(3) Subsection (4) applies for a week when—
(a) a change occurs to the amounts of tax for PAYE income payments set out in schedule 2; and
(b) an employee receives more than 1 payment of salary or wages for the week as described in section RD 12.
Determining amount of tax
(4) The total amount of tax for all payments of salary or wages for the week in which the change occurs is the amount determined under section RD 12.
Later payment for earlier services
(5) The amount of tax for a payment of salary or wages made after the date of the change for a pay period ending before the date in relation to services provided before the date must be calculated using the basic amounts of tax for PAYE income payments applicable in the pay period or week.
Defined in this Act: amount of tax, employee, pay, pay period, PAYE income payment, salary or wages,
Compare: 2004 No 35 s NC 12
RD 15 Payments of salary or wages in pay periods
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Payment for part of period
(1) If an employee who is in regular full-time employment is paid salary or wages for part of a pay period, the payment is treated as a payment for a full pay period.
Payment on production basis
(2) If an employee who is paid on a production basis for work performed as a piece worker or out-worker is paid salary or wages, the payment is treated as payment for the period that runs from the date the work starts to the date of its completion.
Payments in several sums
(3) If a PAYE income payment for a pay period is paid in 2 or more separate sums, those sums must be added together to determine the amount of tax for the payment.
When impractical to make payments at same time
(4) Despite subsection (3), if it is impractical for an employer to pay an employee overtime pay and other salary or wages for a pay period at the same time, the employer may add the amount of the overtime pay of the employee to their salary or wages for a later pay period, but not their overtime pay if, for both pay periods,—
(a) the amounts of the employee’s salary or wages are more or less the same; and
(b) the amounts of tax withheld from the employee’s salary or wages are the same; and
(c) the employee has the same tax code.
Periods not coinciding
(5) For the purposes of subsection (4), if overtime pay is paid for a particular period that is the same length as a pay period but does not coincide with a pay period, it may be treated as overtime pay for the pay period in which the particular period ends.
Defined in this Act: amount of tax, employee, employer, employment, pay, pay period, PAYE income payment, salary or wages, tax code, tax withheld,
Compare: 2004 No 35 s NC 2(2)–(4)
RD 16 Payments to private domestic workers
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When this section applies
(1) This section applies to a person who is employed as a private domestic worker by another person and—
(a) the employer is the occupier, or 1 of the occupiers, of a house or premises used exclusively for residential purposes; and
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(b) the employment—
(i) is for the performance of work in or about the house or premises, or a garden or grounds belonging to the house or premises; and
(ii) is not for a business carried on by the employer, or an occupation or calling of the employer; and
(iii) is not regular full-time employment.
No amount of tax withheld
(2) No amount of tax is required to be withheld for a PAYE income payment relating to the person’s employment as a private domestic worker when sections RA 8 (Liability of persons receiving payments or benefits) and RD 4(2) apply.
Defined in this Act: amount of tax, business, employer, employment, PAYE income payment, private domestic worker,
Compare: 2004 No 35 s NC 2(1)
RD 17 Payment of extra pay with other PAYE income payments
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When this section applies
(1) This section applies when a person pays an amount of extra pay to an employee who also receives a PAYE income payment from the person. The amount of tax for the extra pay is based on the sum of the extra pay and the annualised value of all PAYE income payments made to the employee in the period that starts 4 weeks before the date of the payment of the extra pay and ends on the date of that payment.
Between $38,000 and $60,000
(2) If the sum of the amounts referred to in subsection (1) is more than $38,000 but no more than $60,000, the amount of tax for the extra pay that must be withheld is the amount determined using the basic amounts of tax for PAYE income payments set out in schedule 2, part B, table 1, row 2 (Basic tax rates for PAYE income payments).
Over $60,000
(3) If the sum of the amounts referred to in subsection (1) is more than $60,000, the amount of tax for the extra pay that must be withheld is the amount determined using the basic amounts of tax for PAYE income payments set out in schedule 2, part B, table 1, row 3.
Defined in this Act: amount, amount of tax, employee, extra pay, pay, PAYE income payment,
Compare: 2004 No 35 s NC 2(5)
RD 18 Schedular payments without notification
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When this section applies
(1) This section applies when a person makes a schedular payment but the notification required under section 24L of the Tax Administration Act 1994 has not been provided to them.
When this section does not apply
(2) This section does not apply when a person other than a company incorporates a company to obtain a reduction in an amount of tax for a schedular payment.
Amount of tax
(3) The person must withhold the amount of tax for the schedular payment of an amount determined as follows:
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(a) 5% of the amount of the schedular payment in addition to an amount calculated under section RD 10(3) if—
(i) the person receiving the payment is a company that is a non-resident contractor; and
(ii) the non-resident contractor receives the payment other than as a result of a choice that is made for purposes that include a purpose of defeating the intent and application of paragraph (c); and
(iii) paragraph (b) does not apply:
(b) zero, if the schedular payment is made to a non-resident entertainer:
(c) 15% of the amount of the schedular payment if paragraphs (a) and (b) do not apply.
Defined in this Act: amount, amount of tax, company, non-resident contractor, non-resident entertainer, notify, pay, schedular payment,
Compare: 2004 No 35 s NC 7(2)
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RD 19 Schedular payments to non-resident entertainers
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When this section applies
(1) This section applies when a non-resident entertainer derives income from an activity or performance connected with any of the activities or performances described in the definition of non-resident entertainer.
Amounts withheld
(2) If the only amount of income derived by the entertainer in a tax year is from a schedular payment from which the amount of tax has been withheld, their income tax liability is treated as equal to the total amount withheld.
Amounts not withheld
(3) If the entertainer has received a schedular payment from which no amount of tax has been withheld, the entertainer must pay the amount of tax to the Commissioner by the 20th day of the month following that in which the payment was made, or by the date of their departure from New Zealand if that is earlier.
Defined in this Act: amount, amount of tax, Commissioner, income, income tax liability, New Zealand, non-resident entertainer, pay, schedular payment, tax year,
Compare: Income Tax (Withholding Payments) Regulations 1979, regulations 10, 11
RD 20 Schedular payments to subcontractors
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When this section applies
(1) This section applies when a contractor is paid a schedular payment for services provided under a contract, and a subcontractor has provided services under the contract.
Obligation to retain amount
(2) The PAYE rules apply to the contractor in relation to a payment made to the subcontractor in relation to the work carried out under the contract.
Defined in this Act: pay, PAYE rules, schedular payment,
Compare: Income Tax (Withholding Payments) Regulations 1979, regulation 12
Paying amounts of tax
RD 21 When amounts of tax not withheld or payment insufficient
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Employees’ obligations
(1) If, for any reason, some or all of the amount of tax for a PAYE income payment is not withheld at the time it is paid to an employee, the employee must—
(a) provide an employer monthly schedule with the relevant details; and
(b) pay the amount of the deficiency.
When person exempt or not liable to pay
(2) Subsection (1)(b) does not apply if the employee is exempt from paying the amount or is not liable for the amount of tax.
When payment less than amount of tax
(3) If the amount of a PAYE income payment is less than the amount of tax for the payment, the employee must pay the amount of the deficiency to their employer or PAYE intermediary. If the employee does not pay the amount of the deficiency to their employer or PAYE intermediary, they must pay the amount to the Commissioner under section RD 4(2).
Defined in this Act: amount, amount of tax, Commissioner, employee, employer, employer monthly schedule, pay, PAYE intermediary, PAYE income payment,
Compare: 2004 No 35 s NC 5
RD 22 PAYE income payment forms for amounts of tax paid to Commissioner
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Paying amount withheld with payment form
(1) An employer or a PAYE intermediary who withholds an amount of tax from a PAYE income payment must pay the amount to the Commissioner under section RD 4 and provide a PAYE income payment form in relation to the amount.
General rule
(2) The employer or PAYE intermediary must provide the PAYE income payment form referred to in subsection (1) by—
(a) the 20th day of the month in which they withhold an amount of tax for a PAYE income payment in a first payment period described in section RA 15(3) (Payment dates for interim and other tax payments):
(b) the 5th day of the month following that in which they withhold an amount of tax for a PAYE income payment in a second payment period described in section RA 15(3), or if the month is December, by the 15th day of January.
When gross amounts of tax less than $100,000
(3) Despite subsection (2), an employer who is not a new employer whose gross amounts of tax for PAYE income payments and employer’s superannuation contributions payable for the preceding tax year are less than $100,000, must provide the PAYE income payment form by the 20th day of the month following that in which an amount of tax is withheld.
New employers
(4) Despite subsection (2), an employer who is a new employer, must provide the PAYE income payment form by the 20th day of the month following that in which an amount of tax is withheld until their gross amounts of tax for PAYE income payments and employer’s superannuation contributions payable for the tax year are more than $100,000.
Thresholds
(5) For the purposes of determining whether the threshold referred to in subsections (3) and (4) is reached, if the employer ends their business and starts a new business, or operates 2 or more businesses at the same time, all amounts of tax withheld must be aggregated.
When business ended
(6) Despite subsections (2) to (4), if the employer stops carrying on a business in relation to which an amount of tax for a PAYE income payment has been withheld, they must notify the Commissioner and provide a PAYE income payment form by the 15th day of the second month following the month in which the business is ended.
Single employer
(7) For the purposes of subsections (3) and (4), the following are treated as 1 employer:
(a) 2 or more companies if they were a group of companies at a time in the relevant tax year:
(b) all partners in a partnership:
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(c) all persons in whom property has become vested, or to whom the control of property has passed in the case of—
(i) an estate of a deceased person; or
(ii) a trust; or
(iii) a company in liquidation; or
(iv) an assigned estate; or
(v) another fiduciary relationship.
Defined in this Act: amount of tax, business, Commissioner, company, employer, employer’s superannuation contribution, first payment period, gross, group of companies, liquidation, notify, pay, PAYE income payment, PAYE income payment form, PAYE intermediary, second payment period, tax withheld, tax year,
Compare: 2004 No 35 s NC 15(1), (5), (6)
RD 23 Bonds given by employers of certain non-resident employees
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When this section applies
(1) This section applies if it cannot reasonably be determined at the time an employer or PAYE intermediary is required to withhold the amount of tax for a PAYE income payment whether the payment will be exempt income of an employee under either section CW 19 (Amounts derived during short-term visits) or a double tax agreement.
Providing bond
(2) The employer or PAYE intermediary may apply to the Commissioner to be released from their obligation to withhold the amount by providing a bond or other security for the amount that would be required to be withheld but for this section.
Consequences of acceptance of bond
(3) If the Commissioner accepts the bond or security referred to in subsection (2),—
(a) the employer or PAYE intermediary must not withhold the amount of tax for a PAYE income payment to the employee; and
(b) information concerning the employee must not be included in an employer monthly schedule; and
(c) the no notification rate referred to in section 24B(3)(h) of the Tax Administration Act 1994 must not be used in relation to the PAYE income payment.
When subsection (3) no longer applies
(4) If the employee later becomes liable to pay income tax because of an event provided for in an arrangement made under section BH 1 (Double tax agreements) or section CW 19, the application of subsection (3) ends, and the employer or PAYE intermediary must withhold the amount of tax for a PAYE income payment made to the employee.
Employee’s liability
(5) If the Commissioner considers that the employee is liable for income tax in relation to a PAYE income payment from which no amount of tax is withheld because of the application of subsection (3), the Commissioner must notify the employer or PAYE intermediary, as applicable. The employer or intermediary must then account for and pay the total amount of tax for all PAYE income payments that would have been due, or a lesser amount as the Commissioner determines.
Treatment of amount paid under subsection (5)
(6) An amount paid to the Commissioner under subsection (5) is treated as the amount of tax for a PAYE income payment made on the date of the Commissioner’s notice. section 120U of the Tax Administration Act 1994 overrides this subsection.
Defined in this Act: amount, amount of tax, arrangement, Commissioner, double tax agreement, employee, employer, employer monthly schedule, exempt income, income tax, notify, pay, PAYE income payment, PAYE intermediary,
Compare: 2004 No 35 s NC 18
RD 24 Exemption certificates for non-resident contractors
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When this section applies
(1) This section applies when—
(a) a non-resident contractor derives an amount from a contract activity or service that is not income, whether because of a double tax agreement or for another reason; or
(b) the contractor provides a bond or other security for the payment of any income tax payable on an amount derived by them from a contract activity or service; or
(c) the contractor has in the period of 24 months before the date of the application referred to in subsection (2) paid all income tax payable by them and complied with their obligations under the Inland Revenue Acts, and the Commissioner is satisfied that the contractor will continue to do this.
Exemption certificate
(2) The non-resident contractor may apply to the Commissioner to provide them with an exemption certificate under section 24M of the Tax Administration Act 1994 for a contract payment made to them or another person acting on their behalf in relation to a contract activity or service set out in the certificate for which no amount of tax is to be withheld.
Defined in this Act: amount, amount of tax, Commissioner, contract activity or service, contract payment, double tax agreement, exemption certificate, income, income tax, Inland Revenue Acts, non-resident contractor, pay,
Compare: 2004 No 35 s NC 18(1), Income Tax (Withholding Payments) Regulations 1979, regulation 5(3)
Fringe benefit tax (FBT) rules and fringe benefits
Introductory provisions
RD 25 FBT rules and their application
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Meaning
(1) The FBT rules means—
(a) sections CX 2 to CX 38 (which relate to fringe benefits); and
(b) sections GA 2, GB 31, and GB 32 (which relate to FBT); and
(c) sections RD 26 to RD 63; and
(d) schedules 1, part C (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) and 5 (Fringe benefit values for motor vehicles); and
(e) sections 46B to 46E, 93, Part 7, and section 139B of the Tax Administration Act 1994.
Application
(2) The FBT rules apply to an employer who provides a fringe benefit to their employee in connection with their employment.
Defined in this Act: employee, employer, employment, FBT, FBT rules, fringe benefit,
Compare: 2004 No 35 s OB 1
“FBT rules”
RD 26 Liability for FBT
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Liability
(1) An employer who provides a fringe benefit to an employee is liable to pay FBT under sections RD 27 to RD 57, choosing a method of payment described in subsection (2).
Payment options
(2) An employer must choose 1 of the following options for the payment of FBT:
(a) the single rate option, seesection RD 58; or
(b) the alternate rate option, seesection RD 59; or
(c) if eligible, the close company option, seesection RD 60; or
(d) if eligible, the small business option, seesection RD 61.
Election
(3) An employer may make an election under subsection (2)(a) or (b) by providing a return setting out the rate chosen.
Defined in this Act: business, close company, employee, employer, FBT, fringe benefit, pay,
Compare: 2004 No 35 s ND 1(1)–(3)
Value of fringe benefits
RD 27 Determining fringe benefit values
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What sections RD 28 to RD 53 do
(1) Sections RD 28 to RD 53 set out the rules for determining the value of a fringe benefit provided by an employer to an employee in connection with their employment. The taxable value of a fringe benefit when an employee pays an amount for receiving the benefit is dealt with in sections RD 54 to RD 57.
When value cannot be ascertained
(2) If, under sections RD 28, RD 29, and RD 33 to RD 41, the value of a fringe benefit cannot be ascertained, the value is the market value or otherwise as the Commissioner determines.
Meaning of market value
(3) In subsection (2), market value means the price, at the time at which the goods or services were provided to the employee, for which the goods or services would normally be sold in a sale—
(a) in the open market in New Zealand; and
(b) freely offered; and
(c) made on ordinary trade terms; and
(d) to a member of the public at arm’s length.
Defined in this Act: amount, Commissioner, employee, employer, employment, fringe benefit, market value, New Zealand, pay,
Compare: 2004 No 35 ss ND 1A(1), ND 1L
RD 28 Private use of motor vehicle: calculation methods
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What this section does
(1) This section limits the way an employer may use a method for calculating the value of the benefit that they provide to an employee by making a motor vehicle available for the employee’s private use.
Choosing method in first return
(2) When a person first files a return relating to a vehicle for the purposes of this section, they may calculate the value of the benefit using either of the valuation methods set out in schedule 5 (Fringe benefit values for motor vehicles).
Using method in first return
(3) The person must use the method chosen in the first return referred to in subsection (2) in calculating the value of the benefit for the length of time—
(a) starting after the end of the period of the first return; and
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(b) continuing to the earliest of the following dates:
(i) the date of the disposal of the vehicle:
(ii) the date on which the vehicle ceases to be leased by the employer or an associated person without a consecutive or successive lease of the vehicle by them:
(iii) the date that is 5 years after start of the period of the first return.
Returns after 5 years
(4) In a return relating to the vehicle for a period beginning 5 years or more after the start of the period of the first return, the person may calculate the value of the benefit using either of the valuation methods set out in schedule 5.
Cost price valuation method
(5) Despite subsections (3) and (4), the person must apply schedule 5, clause 1 or 2, using the cost price valuation method if—
(a) the vehicle is owned, leased, or rented by the employer or an associated person; and
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(b) the employer or the associated person owned, leased, or rented the vehicle—
(i) during the period of the first return, if the period begins before 1 April 2006:
(ii) before 1 April 2006.
Exception: vehicle not subject to arrangement
(6) Subsection (5) does not apply if a first return for the vehicle is for a period that starts on or after 1 April 2006 and the vehicle is not the subject of an agreement or arrangement referred to in section CX 7 (Employer or associated person treated as having right to use vehicle under arrangement).
Exception: 5 years after first return
(7) Subsection (5) does not apply if the person owns the vehicle and a period of 5 years or more since the start of the period of the first return has elapsed.
Defined in this Act: arrangement, associated person, employee, employer, lease, motor vehicle, private use,
Compare: 2004 No 35 s ND 1A(1)–(1D)
RD 29 Private use of motor vehicle: formulas
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What this section does
(1) This section sets out the formulas for calculating the value of the benefit that an employer provides to an employee by making a motor vehicle available for their private use.
Quarterly payment
(2) If FBT is paid quarterly, the value of the benefit is calculated using the formula—
Annual payment
(3) If FBT is paid on an annual basis, the value of the benefit is the total of the amounts calculated under subsection (2) for the 4 quarters in the applicable tax year.
Payment by income year
(4) If FBT is paid on an income year basis, the value of the benefit is calculated using the formula—
Definition of items in formulas
(5) In the formula,—
(a) in subsection (2), days refers to the number of days in the quarter on which the vehicle is made available for private use, reduced by the number of days on which the vehicle was a work-related vehicle, or 90, whichever is less:
(b) in subsection (4), days refers to the number of days in the income year on which the vehicle is made available for private use, reduced by the number of days on which the vehicle was a work-related vehicle:
(c) in subsections (2) and (4), schedule 5 amount refers to the amount calculated under schedule 5 (Fringe benefit values for motor vehicles) as the value of the benefit that would have been received for unlimited private use of the vehicle in that quarter or income year, as applicable.
Test period
(6) To calculate the value of the benefit, an employer may choose to use a test period under section RD 31 to establish private use.
Defined in this Act: amount, employee, employer, FBT, income year, motor vehicle, private use, quarter, tax year, work-related vehicle,
Compare: 2004 No 35 s ND 1A(2)–(6)
RD 30 Private use of motor vehicle: 24-hour period
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When this section applies
(1) This section applies for the purposes of a calculation of the value of a benefit under section RD 29.
Meaning of day
(2) In section RD 29(5)(a) and (b), in relation to a motor vehicle and the item days in the formulas, a day is—
(a) a 24-hour period starting from a time in a day that a person who owns or leases the vehicle chooses; or
(b) a 24-hour period starting at midnight if paragraph (a) does not apply.
Choosing starting point and notifying Commissioner
(3) For the purposes of subsection (2)(a), the person must—
(a) choose a starting point for the day that is a whole number of an hour after midnight; and
(b) notify the Commissioner of their election when filing the next return relating to the vehicle.
Elections
(4) An election under subsection (2)(a)—
(a) is effective from the start of the quarter, income year, or tax year to which a return relates; and
(b) applies to all vehicles in relation to which the person files a return.
Hour applying for 2 income years
(5) If the person chooses under subsection (3)(a) a particular hour in the 24-hour period as the starting point of the day, that hour continues to apply to the use of the vehicle from the start of the relevant quarter, income year, or tax year, as applicable, for a minimum period of 2 income years.
When circumstances change
(6) An employer may ask the Commissioner to amend the starting point of the 24-hour period, or to treat the election as revoked, if the employer’s circumstances have changed in a way that—
(a) is more than minor; and
(b) makes the starting point no longer relevant to the employer’s business.
Defined in this Act: business, Commissioner, day, employer, income year, motor vehicle, notify, quarter, tax year,
Compare: 2004 No 35 s ND 1AB
RD 31 Motor vehicle test period
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Recording details for test period
(1) To establish the value of the benefit provided through a motor vehicle being made available to an employee for their private use, an employer may choose to record the details of the use of the vehicle by the employee for a test period.
Number used in calculations
(2) The number of days on which a vehicle is available for an employee’s private use that is ascertained in the test period is the number used in the calculation in section RD 29(2). For the calculation in RD 29(4), the relevant number is the number of days ascertained in the test period multiplied by 4.
Quarter or 3 months for test period
(3) If FBT is paid quarterly or annually, the test period is a quarter. If FBT is paid on an income year basis, the test period is 3 consecutive months of an income year.
Period showing pattern of use
(4) The employer must—
(a) choose a test period that shows, or is likely to show, a pattern of use of the motor vehicle by the employee that fairly represents the use of the vehicle by the employee over the whole of the applicable term; and
(b) keep a record of the test period, including accurate details of the days in the period on which the vehicle is available for the employee’s private use.
Work-related vehicles
(5) In subsection (4), a day on which the vehicle is a work-related vehicle is treated as a day on which the vehicle is not available for private use.
Term of 3 years
(6) The number of days of availability for private use ascertained in the test period applies for a term of 3 years. The term starts, as applicable, as follows:
(a) if FBT is paid quarterly, on the first day of the test period:
(b) if FBT is paid on an annual basis, on the first day of the tax year in which the test period occurs:
(c) if FBT is paid on an income year basis, on the first day of the income year in which the test period occurs.
Reduction of term
(7) The term referred to in subsection (6) is reduced if the number of days of actual private use of the motor vehicle is 20%, or more than 20%, higher than the number ascertained in the test period. In this case, the term ends on the last day of the applicable quarter, year, or income year. If the employer chooses to start another test period, the existing term ends just before the start of the new term.
When test period no longer representative
(8) If the Commissioner considers that the result ascertained in the test period does not, or does no longer, fairly represent the actual private use of the motor vehicle by the employee, the Commissioner may notify the employer that the term will end on a particular date. Following notification, the employer must not use that result again.
Defined in this Act: Commissioner, employee, employer, FBT, income year, motor vehicle, notify, private use, quarter, tax year, work-related vehicle,
Compare: 2004 No 35 s ND 1B(1)–(6)
RD 32 Replacement motor vehicles
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For the purposes of section RD 31, a replacement motor vehicle is treated in the same way as the vehicle it replaces if the result ascertained in the test period is likely to be fairly representative of the average availability for the private use of the vehicle during the term.
Defined in this Act: motor vehicle, private use,
Compare: 2004 No 35 s ND 1B(7)
RD 33 Subsidised transport
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Percentage of highest public fare
(1) The value of a benefit that an employer provides to their employee in subsidised transport is 25% of the highest fare the employer charges the public for the equivalent transport in terms of class, extent, and occasion. This subsection is overridden by subsection (2).
When benefit provided under arrangement
(2) Despite section CX 2(2) (Meaning of fringe benefit), if the fringe benefit is provided under an arrangement with a third person, the value of the benefit is determined under subsection (3).
Percentage or actual payment
(3) If a third person provides the employee with subsidised transport under an arrangement with their employer, the value of the benefit is the greatest of—
(a) 25% of the highest fare the employer charges the public for the equivalent transport in terms of class, extent, and occasion; and
(b) 25% of the highest fare the third person charges the public for the equivalent transport in terms of class, extent, and occasion, if the third person is a company in the same group of companies as the employer; and (c) the amount that the employer has paid or is liable to pay the person for the benefit provided.
GST
(4) In this section, for a registered person who may claim input tax for subsidised transport, amount means the GST-inclusive amount.
Defined in this Act: amount, arrangement, company, employee, employer, fringe benefit, group of companies, GST, input tax, pay, subsidised transport,
Compare: 2004 No 35 s ND 1C
RD 34 Employment-related loans: value using prescribed interest rates
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When this section applies
(1) This section applies when an employer provides a benefit to their employee in an employment-related loan and the employer does not choose to determine the value of the benefit under section RD 35.
Amount of interest or amount under financial arrangement
(2) The value of the benefit in a period is the amount by which the prescribed interest on the loan is more than—
(a) the amount of interest that accrued on the loan in the period; or
(b) when the loan is a financial arrangement and it is appropriate for the nature of the loan, the income that would have accrued to the employer’s benefit in the period as calculated under the yield to maturity method.
Meaning of prescribed interest
(3) For the purposes of this section, prescribed interest means,—
(a) except as provided in paragraph (b), the amount of interest that would have accrued on the loan during the quarter or tax year had the interest been calculated on the daily balance of that loan at the prescribed rate of interest:
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(b) for loans made on or before 31 March 1985, the interest on which is not subject to review, the amount of interest that would have accrued on the loan during the quarter or tax year had the interest been calculated on the daily balance of the loan at the non-concessionary rate of interest for—
(i) the tax year in which the agreement to make the loan was signed; or
(ii) if the agreement was not in writing, the year in which the loan was agreed to by all parties.
Defined in this Act: amount, employee, employer, employment-related loan, financial arrangement, income, interest, non-concessionary rate of interest, prescribed interest, quarter, tax year,
Compare: 2004 No 35 ss ND 1D, ND 1G
RD 35 Employment-related loans: value using market interest rates
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Choosing to use market interest rate
(1) An employer who is in the business of lending money to the public may choose to value a benefit provided to their employee in an employment-related loan using the market interest on the loan.
Value of benefit
(2) The value of the benefit referred to in subsection (1) in a period is the amount by which the market interest on the loan is more than—
(a) the amount of interest that accrued on the loan in the period; or
(b) when the loan is a financial arrangement and it is appropriate having regard to the nature of the loan, the income that would have accrued to the employer’s benefit in the period as calculated under the yield to maturity method.
Using method for 2 income years
(3) Having made an election under subsection (1), the employer must use the method for the income year to which the election relates and for the next income year.
Notifying Commissioner of change to method
(4) An employer may not change the method of calculating the value of the benefit for an income year unless the employer notifies the Commissioner of the proposed change at least 1 year before the start of the income year in which the change is to occur.
Market interest
(5) In this section, market interest means the amount of interest calculated at the interest rate that would apply to a borrower belonging to a group of persons to whom a loan of the kind provided to the employee is offered when the group meets the following requirements:
(a) the group has a comparable credit risk to the group to which the employee belongs; and
(b) membership of the group arises from a factor or factors that do not include a connection between a member and the employer; and
(c) the group is sufficient in number to ensure a transaction on an arm’s-length basis.
Calculating amount of interest
(6) For the purposes of subsection (5), the amount of interest is the amount accrued on the loan during the quarter or tax year calculated on the daily balance of the loan at the rate referred to in the subsection.
Defined in this Act: amount, business, Commissioner, employee, employer, employment-related loan, financial arrangement, group of persons, income, income year, interest, market interest, notify, quarter, tax year,
Compare: 2004 No 35 s ND 1DB
RD 36 Repayment of employment-related loans
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Repayment at start of tax year
(1) For the purposes of sections RD 34 and RD 35, an amount of income of an employee applied in an income year to repay an employment-related loan provided to the employee is treated as applied towards repayment on the first day of the income year or, if the date of the advance of the loan falls after that day, the later date.
Limitation
(2) Subsection (1) applies only when an employee derives income that—
(a) is salary or wages, an extra pay, a dividend, or interest; and
(b) is not resident passive income, non-resident passive income, or an amount subject to a withholding obligation under the PAYE rules; and
(c) is income of the employee in the tax year in which it is applied to repay the loan, or in an earlier income year.
Amounts derived and applied in different tax years
(3) Subsection (4) applies when an employee derives income that—
(a) is applied to repay an employment-related loan; and
(b) relates to an income year after the income year in which it is applied to repay the loan.
Treatment of amount
(4) The employee may treat the amount as derived in the earlier income year, but must notify the Commissioner of their decision within the time allowed to the employer for providing a return of income for the income year, or a longer time if the Commissioner allows.
Defined in this Act: amount, Commissioner, dividend, employee, employer, employment-related loan, extra pay, income, income year, interest, non-resident passive income, notify, pay, PAYE rules, resident passive income, return of income, salary or wages, tax year,
Compare: 2004 No 35 s ND 1E
RD 37 Contributions to superannuation schemes
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Amount of contribution
(1) The value of a benefit that an employer provides in contributing to a superannuation scheme for an employee is the amount of the contribution made by the employer.
GST
(2) In this section, for a registered person who may claim input tax for a contribution to a superannuation scheme, amount means the GST-inclusive amount.
Defined in this Act: amount, contribution, GST, employee, employer, input tax, superannuation scheme,
Compare: 2004 No 35 s ND 1H
RD 38 Contributions to funds, trusts, and insurance premiums
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Sickness, accident, or death benefit fund
(1) The value of the benefit that an employer provides in contributing to a sickness, accident, or death benefit fund for an employee is the amount of the contribution made by the employer.
Funeral trust
(2) The value of the benefit that an employer provides in contributing to a funeral trust for an employee is the amount of the contribution made by the employer.
Specified insurance premium
(3) The value of the benefit that an employer provides in paying an insurance premium described in section CX 16 (Contributions to life or health insurance) for an employee is the amount of the premium paid by the employer.
Insurance fund of friendly society
(4) The value of the benefit that an employer provides in contributing to an insurance fund of a friendly society for an employee is the amount of the contribution made by the employer.
Defined in this Act: amount, contribution, employee, employer, friendly society, sickness, accident, or death benefit fund, specified insurance premium,
Compare: 2004 No 35 s ND 1I
RD 39 Benefits provided by charitable organisations
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Value of benefit
(1) The value of a benefit under section CX 25(2) (Benefits provided by charitable organisations) that a charitable organisation provides in a short-term charge facility is the sum of—
(a) the amount that the organisation pays for or towards buying or hiring the goods and services obtained by the employee under the short-term charge facility:
(b) any interest incurred in relation to buying or hiring the goods and services:
(c) when the short-term charge facility is a credit card or charge card provided for an employee’s use solely for purposes unconnected with the organisation or its operations, the associated account or service fee.
When subsections (3) and (4) apply
(2) Subsections (3) and (4) apply in a tax year to an employer that is a charitable organisation when—
(a) the employer provides a benefit to their employee in a short-term charge facility that is a fringe benefit under section CX 25(1); and
(b) the employer is required to pay FBT for the tax year on a quarterly basis; and
(c) the value of the benefit in the short-term charge facility in the first quarter of the tax year is no more than 5% of the employee’s salary or wages for the tax year.
Employer’s liability
(3) The employer’s liability to pay FBT on a benefit provided in a quarter of the tax year depends on whether the taxable value of all the benefits (the accumulated value) that the employer provides to the employee in the period from the start of the tax year to the end of the quarter is more than 5% of the employee’s salary or wages for the tax year (the threshold value).
Calculation of liability
(4) The employer is liable to pay FBT for a quarter of a tax year on the following amounts:
(a) zero, if the accumulated value for the quarter is no more than the threshold value:
(b) the accumulated value if the quarter is the first in the tax year for which the accumulated value is more than the threshold value:
(c) the taxable value of all the benefits provided in the quarter, if neither paragraph (a) or (b) applies.
Defined in this Act: amount, charitable organisation, employee, employer, FBT, fringe benefit, interest, quarter, salary or wages, short-term charge facility, tax year,
Compare: 2004 No 35 ss ND 1IB, ND 8B
RD 40 Goods
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Market value or cost
(1) The value of a fringe benefit that an employer provides to an employee in goods is determined as follows:
(a) when the person providing the goods manufactured, produced, or processed them, their market value:
(b) when the person providing the goods bought them, or paid for them to be bought, dealing at arm’s length with the supplier of the goods, the cost of the goods to the person:
(c) if the person providing the goods is a company included in a group of companies, then, as the person chooses, the value of the benefit under either paragraph (a) or (b), applying the provisions as if the group of companies were 1 company.
Sale in open market
(2) Despite subsection (1), if the value of the fringe benefit as determined under that subsection would be more than the amount that would have been paid to the employer for the purchase of the goods in a sale described in paragraphs (a) to (d), then the value is treated as that amount. The sale must be—
(a) at retail in the open market in New Zealand; and
(b) freely offered; and
(c) made on ordinary trade terms; and
(d) to a member of the public with whom the employer is at arm’s length.
Some definitions
(3) In this section,—
cost, for a registered person who may claim input tax for the goods, means the GST-inclusive cost of the goods bought or the amount that the person paid for the goods
market value means the lowest price, at the time at which the goods were provided to the employee, for which identical goods were sold by the same person to an arm’s length buyer, whether wholesaler, retailer, or the public, in the open market in New Zealand in a sale freely offered and made on ordinary trade terms
price, for a registered person who may claim input tax for goods that they manufacture, produce, or process, means the GST-inclusive price of those goods to that person.
Defined in this Act: amount, company, cost, employee, employer, group of companies, GST, identical goods, input tax, market value, New Zealand, pay, price, registered person,
Compare: 2004 No 35 s ND 1J
RD 41 Services
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Price, amount paid, or fee
(1) The value of a fringe benefit that an employer provides to an employee in services is,—
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(a) when an employer normally provides the services as part of their business, the price charged by the employer—
(i) at the time they provided the services; and
(ii) for the same or similar services to the public in the open market in New Zealand; and
(iii) on ordinary trade or professional terms between buyers and sellers independent of each other:
(b) when an employer pays for the services to be provided, dealing at arm’s length with the supplier of the services, the amount paid or payable:
(c) if neither paragraph (a) nor (b) applies, the price or fee that the employer or supplier providing the services would at that time have charged the public, had they provided the same or similar services to the public in the open market in New Zealand on ordinary trade or professional terms.
Exclusions
(2) This section does not apply to a service that consists of making available a motor vehicle for private use, providing an employment-related loan, or providing subsidised transport.
Services provided to group of employees
(3) For the purposes of this section, a person who provides services to an employee belonging to a group of employees is treated as providing the same or similar services to the public in the open market in New Zealand on ordinary trade or professional terms if the person provides the same or similar services to a group of persons that—
(a) negotiates the transaction on an arm’s-length basis; and
(b) is comparable in number to the group of employees.
Some definitions
(4) In this section,—
amount, for a registered person who may claim input tax for that service, means the GST-inclusive amount
fee and price, for a registered person who may claim input tax for that service, means the GST-inclusive fee or price.
Defined in this Act: amount, business, employee, employer, employment-related loan, fee, fringe benefit, GST, input tax, motor vehicle, New Zealand, pay, price, private use, registered person, subsidised transport,
Compare: 2004 No 35 s ND 1K
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RD 42 Goods at staff discount
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Goods discounted for employees
(1) This section applies when an employer sells goods in the normal course of their business to an employee when all the following apply:
(a) the retail price of identical goods is $200 or less to an arm’s length buyer in the open market in New Zealand in a sale freely offered and made on ordinary trade terms; and
(b) the price of the goods to the employee is lower than their cost to the employer, the difference resulting from a staff discount that the employer normally provides to employees; and
(c) at the time of the sale, the staff discount is no more than 5% of the price of identical goods in the circumstances referred to in paragraph (a).
Cost of goods
(2) The goods are treated as having been sold at a price equal to the cost of the goods to the employer.
Defined in this Act: business, cost, employee, employer, identical goods, New Zealand, price,
Compare: 2004 No 35 s ND 1N
RD 43 Goods on special with staff discount
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Sale of identical goods
(1) This section applies when an employer sells goods to an employee on a day when the employer is offering identical goods for sale in the normal course of their business at a special price and when all the following apply:
(a) the price of the identical goods is $200 or less to an arm’s length buyer in the open market in New Zealand in a sale freely offered and made on ordinary trade terms; and
(b) the price of the goods to the employee is lower than their cost to the employer, the difference resulting from a staff discount that the employer offers to the employee in addition to any other discount; and
(c) just before or after the sale to the employee, a reasonable quantity of the identical goods is available in the open market in New Zealand; and
(d) the price is at least 95% of the cost of the goods to the employer, or at least 95% of the price on the day of the sale of the identical goods to the public in the open market in New Zealand, whichever is less.
Cost of goods
(2) The goods are treated as having been sold at a price equal to the cost of the goods to the employer.
Defined in this Act: business, cost, employee, employer, identical goods, New Zealand, price,
Compare: 2004 No 35 s ND 1O
RD 44 Goods sold by group companies
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For the purposes of sections RD 42 and RD 43, if a company that is included in a group of companies sells goods to an employee of another company in the group, the sale is treated as if it were made directly from employer to employee.
Defined in this Act: company, employee, employer, group of companies,
Compare: 2004 No 35 s ND 1P(2)
RD 45 Unclassified benefits
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Liability limited
(1) An employer is liable to pay FBT on an unclassified benefit only within the limits described in this section.
Quarterly payment
(2) When FBT is paid quarterly, an employer is liable for FBT on an unclassified benefit provided to an employee in a quarter only if—
(a) the total taxable value of all unclassified benefits provided in the quarter by the employer to the employee is more than $200; or
(b) the total taxable value of all unclassified benefits provided in the last 4 quarters including the current quarter by the employer to all employees of the employer, whether accounted for on a quarterly or an income year basis, is more than $15,000.
Yearly payment
(3) When FBT is paid on either an annual basis or an income year basis, except when subsection (4) applies, an employer is liable for FBT on unclassified benefits provided to an employee in the tax year or income year only if—
(a) the total taxable value of all unclassified benefits provided in the tax year or income year by the employer to the employee is more than $800; or
(b) the total taxable value of all unclassified benefits provided in the tax year or income year by the employer to all employees of the employer is more than $15,000.
Period longer or shorter than income year
(4) When an employer accounts for FBT on an income year basis, and the period for which they have accounted under section RD 60 differs from an income year for the reasons described in subsection (5), an employer is liable for FBT on unclassified benefits provided in the period only if—
(a) the total taxable value of all unclassified benefits provided in the period by the employer to an employee is more than the figure that is the same fraction or multiple of $800 as the number of days in the period is a fraction or multiple of 365; or
(b) the total taxable value of all unclassified benefits provided in the period by the employer to all employees of the employer is more than the figure that is the same fraction or multiple of $15,000 as the number of days in the period is a fraction or multiple of 365.
Reasons for difference
(5) In subsection (4), the income year for which the employer has accounted may be longer or shorter than the normal income year because the employer has either—
(a) started or ceased business during that income year; or
(b) chosen, with the agreement of the Commissioner, to file a return under this subpart for the income year ending with the date of the annual balance of their accounts.
Employer and associated persons
(6) In this section, employer includes a person associated with them at any time in the relevant period.
Defined in this Act: associated person, balance date, business, Commissioner, employee, employer, FBT, income year, pay, quarter, return of income, tax year, unclassified benefit,
Compare: 2004 No 35 s ND 1Q
RD 46 Adjustments for unclassified benefits on amalgamation
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When employer ceases to exist
(1) This section applies when a company that is an employer ends its existence on amalgamation or when a new company is established on amalgamation. An adjustment is allowed for unclassified benefits in the period in which the amalgamation occurs.
Quarterly payment
(2) If the amalgamating company pays FBT quarterly, an adjustment must be made in the quarter in which the amalgamation occurs reducing the figure of $15,000 referred to in section RD 45(2)(b) by an amount calculated using the formula—
Adjustment in quarter of amalgamation
(3) If the amalgamated company pays FBT quarterly, and the amalgamated company is a new company established on amalgamation, an adjustment must be made in the quarter in which the amalgamation occurs reducing the figure of $15,000 referred to in section RD 45(2)(b) by an amount calculated using the formula—
Annual payment
(4) If the amalgamating company pays FBT annually, an adjustment must be made for the year in which the amalgamation occurs reducing the figure of $15,000 referred to in section RD 45(2)(b) by an amount calculated using the formula—
Adjustment in year of amalgamation
(5) If the amalgamated company pays FBT annually, and the amalgamated company is a new company established on amalgamation, an adjustment must be made for the year in which the amalgamation occurs reducing the figure of $15,000 referred to in section RD 45(2)(b) by an amount calculated using the formula—
Defined in this Act: amount, amalgamated company, amalgamating company, amalgamation, company, employer, FBT, pay, quarter, unclassified benefit, year,
Compare: 2004 No 35 s ND 1R
Attributing fringe benefits to employees
RD 47 Attribution of certain fringe benefits
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What this section applies to
(1) This section applies when an employer provides a fringe benefit by—
(a) making available a motor vehicle for an employee’s private use under section CX 6 (Private use of motor vehicle):
(b) providing an employment-related loan to an employee under section CX 10 (Employment-related loans) but not a loan by a life insurer under section CX 11 (Employment-related loans: loans by life insurers):
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(c) providing to an employee a benefit with a taxable value of $1,000 or more in a year for each of the following categories:
(i) subsidised transport under section CX 9 (Subsidised transport):
(ii) a contribution to a superannuation scheme under section CX 13 (Contributions to superannuation schemes):
(iii) a contribution to a sickness, accident, or death benefit fund under section CX 14 (Contributions to sickness, accident, or death benefit funds):
(iv) a contribution to a funeral trust under section CX 15 (Contributions to funeral trusts):
(v) the payment of a specified insurance premium or a contribution to an insurance fund of a friendly society under section CX 16 (Contributions to life or health insurance):
(d) providing unclassified benefits to an employee under section CX 2(1)(b)(ii) (Meaning of fringe benefit) with a total taxable value of $2,000 or more in a year.
Attributing fringe benefit to employee
(2) The employer must attribute the fringe benefit to the employee, calculating the FBT liability under section RD 50.
Defined in this Act: employee, employer, employment-related loan, FBT, friendly society, fringe benefit, life insurer, loan, motor vehicle, pay, private use, sickness, accident, or death benefit fund, specified insurance premium, subsidised transport, superannuation scheme, unclassified benefit,
Compare: 2004 No 35 s ND 3(1), (1A)
RD 48 When attributed benefits provided to more than 1 employee
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If an employer provides a fringe benefit to which section RD 47 applies to more than 1 employee, the employer must attribute the benefit to the employee who mainly uses or receives it in a quarter or income year, as applicable. If the employer cannot determine which employee mainly uses or receives the benefit, they must pool the benefit under section RD 53.
Defined in this Act: contribution, employee, employer, fringe benefit, income year, quarter,
Compare: 2004 No 35 s ND 3(2)
RD 49 Application of thresholds to attributed benefits
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When this section applies
(1) This section applies when the value of a fringe benefit described in section RD 47 is above or below the threshold referred to in that section.
Below threshold
(2) If the taxable value of a benefit under section RD 47(1)(c) and (d) is under the relevant threshold, the employer must either—
(a) attribute all fringe benefits with an annual taxable value under the relevant threshold that fall within the particular category; or
(b) pool the value of the benefit under section RD 53.
Exception for subsidised transport
(3) Despite section RD 47(1)(c)(i), if the employer provides subsidised transport under section CX 9 (Subsidised transport) with a taxable value over the threshold, they may pool the value of the benefit under section RD 53 if all their employees have the same or a similar entitlement to the fringe benefit.
Amending thresholds
(4) The Governor-General by Order in Council may determine the amount of the thresholds referred to in section RD 47, setting out the first tax year in which the threshold is to apply.
Defined in this Act: amount, employee, employer, fringe benefit, subsidised transport, tax year,
Compare: 2004 No 35 ss ND 3(4)–(7), ND 4, ND 16
RD 50 Employer’s liability for attributed benefits
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When this section applies
(1) This section applies when an employer is required to attribute the value of a fringe benefit to an employee under sections RD 47 and RD 49.
Tax liability
(2) The employer’s FBT liability in relation to the employee is the amount calculated using the formula—
tax on all-inclusive pay − tax on cash pay.
Definition of items in formula
(3) In the formula,—
(a) tax on all-inclusive pay is the amount determined at the rate set out in schedule 1, part C, table 1 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) on the amount of the employee’s all-inclusive pay calculated using the formula in section RD 51(2):
(b) tax on cash pay is the amount calculated under section RD 51(3)(b) or (4)(b).
Exception for shareholder-employees and persons with attributed income
(4) If the employer has an exception for an employee under section RD 52 in a tax year, and the employer pays FBT at the rate of 49% of the taxable value of the attributed fringe benefits under RD 52(3)(a), the employer must deduct the FBT payable in the tax year from the result of the formula in subsection (2).
Further option
(5) Instead of calculating FBT under subsections (2) and (4), an employer may choose to pay FBT at the rate of 63.93% on the taxable value of the attributed fringe benefits.
Defined in this Act: amount, employee, employer, FBT, fringe benefit, pay, tax year,
Compare: 2004 No 35 s ND 5(3)–(6)
RD 51 Calculation of all-inclusive pay
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When this section applies
(1) This section applies to determine the amount of an employee’s all-inclusive pay for the purposes of section RD 50.
Calculation
(2) The amount of an employee’s all-inclusive pay is calculated using the formula—
cash pay − tax on cash pay + taxable value of all fringe benefits.
Definition of items in formula for major shareholder
(3) If the employee is a major shareholder, the items in the formula are—
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(a) cash pay is the cash pay of the employee for the income year in which the fringe benefit is attributed that is paid to the employee or applied on their account by the employer or a related employer, and includes—
(i) a dividend and interest derived by the employee from their employer; and
(ii) a dividend and interest derived by the employee from a related employer:
-
(b) tax on cash pay is the tax on the cash pay of the employee calculated using the basic rate of income tax set out in schedule 1, part A, clause 1 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits),—
(i) treating the cash pay as if it were the only taxable income of the employee; and
(ii) taking into account a tax credit under sections LC 1 and LC 2 (which relate to tax credits for persons on low incomes), applying the sections as if the employee were resident in New Zealand for the whole income year:
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(c) taxable value of all fringe benefits is—
(i) the taxable value of all fringe benefits attributed to the employee in the tax year; and
(ii) the taxable value of all fringe benefits attributed to a person associated with the employee in the income year if the person does not receive the fringe benefits as an employee of the employer.
Definition of items in formula for person who is not major shareholder
(4) If the employee is not a major shareholder, the items in the formula are—
(a) cash pay is the cash pay of the employee for the tax year in which the fringe benefit is attributed that is paid to the employee by the employer or a related employer:
-
(b) tax on cash pay is the tax on the cash pay of the employee calculated using the basic rate of income tax set out in schedule 1, part A, clause 1,—
(i) treating the cash pay as if it were the only taxable income of the employee; and
(ii) taking into account a tax credit under sections LC 1 and LC 2, applying the sections as if the employee were resident in New Zealand for the whole tax year:
(c) taxable value of all fringe benefits is the taxable value of all fringe benefits attributed to the employee in the tax year.
Timing of amounts
(5) In this section, the cash pay of a shareholder-employee who derives an amount of pay referred to in paragraph (b) or (c) of the definition of pay in subsection (6) is treated as derived in the income year following the income year in which it was received or attributed.
Some definitions
(6) In this section,—
pay means—
(a) salary or wages; and
(b) income to which section RD 3(2) to (4) applies; and
(c) an amount attributed under section GB 29 (Attribution rule: calculation); and
(d) an extra pay; and
(e) a schedular payment
related employer means a branch or division of an employer, or a person associated with the employer.
Defined in this Act: amount, associated person, dividend, employee, employer, extra pay, FBT, fringe benefit, income, income tax, income year, interest, major shareholder, pay, related employer, resident in New Zealand, salary or wages, schedular payment, shareholder-employee, tax, tax credit, tax year, taxable income,
Compare: 2004 No 35 ss ND 5(1), (2), ND 7, ND 7A
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RD 52 Calculation for certain employees when information lacking
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When this section applies
(1) This section applies in relation to the following persons when an employer does not have sufficient information to complete a calculation under section RD 50 or RD 51:
(a) a shareholder-employee who derives salary or wages, or income to which section RD 3(2) to (4) applies; or
(b) an employee receiving attributed income under section GB 29 (Attribution rule: calculation) from a company or trust that is their employer.
Calculations under sections RD 50 and RD 51 not required
(2) Sections RD 50 and RD 51 do not apply in the tax year or income year, as applicable, in which the employer is required to attribute a fringe benefit to the employee.
Alternative rates
(3) The employer must either—
(a) pay FBT at the rate of 49% of the taxable value of the fringe benefits attributed for the tax year, and apply sections RD 50 and RD 51 to the benefits in the next tax year; or
(b) pay FBT at the rate of 63.93% of the taxable value of the fringe benefits attributed for the tax year.
Defined in this Act: company, employee, employer, FBT, fringe benefit, income, income year, pay, salary or wages, shareholder-employee, tax year,
Compare: 2004 No 35 s ND 5A
RD 53 Pooling non-attributed benefits
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When this section applies
(1) This section applies in a tax year when an employer provides a fringe benefit that is—
(a) a benefit provided to a former employee; or
(b) an employment-related loan provided by a life insurer under section CX 11 (Employment-related loans: loans by life insurers); or
(c) a benefit to which section RD 48 applies that cannot be attributed to a particular employee; or
(d) an attributed benefit to which section RD 49(2) applies; or
(e) subsidised transport to which section RD 49(3) applies.
Pooling value
(2) The employer must pool the value of the benefits.
Final quarter pooling
(3) For the final quarter of the tax year, the employer must create 2 pools, 1 for each of the following groups of persons:
(a) the first pool is for an employee who is a major shareholder, or a person associated with an employee who is a major shareholder (unless that person receives the fringe benefit as an employee of the employer):
(b) the second pool is for all other employees.
Final quarter calculation
(4) The employer must calculate FBT for the final quarter of the tax year on the annual taxable value of the pooled fringe benefits—
(a) at the rate of 64% for the first pool; and
(b) at the rate of 49% for the second pool.
Defined in this Act: associated person, employee, employer, employment-related loan, FBT, fringe benefit, group of persons, life insurer, major shareholder, quarter, subsidised transport, tax year,
Compare: 2004 No 35 s ND 6
Taxable value of fringe benefits
RD 54 Value of and payments towards fringe benefits
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Value of benefit
(1) The taxable value of a fringe benefit is the value of the benefit. Subsection (2) overrides this subsection.
Reduction for payment by employee
(2) If an employee pays an amount for receiving a fringe benefit, the value of the benefit is reduced by the amount paid.
When associate pays amount
(3) If section GB 32 (Benefits provided to employee’s associates) applies, the value of the benefit is reduced when a person associated with the employee pays an amount for the benefit.
Exclusions
(4) This section does not apply to—
(a) an employment-related loan:
(b) a payment to acquire or improve an asset if receiving or using the asset does not constitute a fringe benefit.
Defined in this Act: amount, associated person, employee, employment-related loan, fringe benefit, pay,
Compare: 2004 No 35 s ND 1S
RD 55 Private use of motor vehicle: taxable value in cases of part ownership
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If a fringe benefit is provided by making available a motor vehicle to an employee for their private use, and the vehicle is owned in part by the employee (or, if section GB 32 (Benefits provided to employee’s associates) applies, a person associated with the employee), the taxable value of the fringe benefit is determined under section RD 56 or RD 57.
Defined in this Act: associated person, employee, fringe benefit, motor vehicle, private use,
Compare: 2004 No 35 s ND 1T
RD 56 Private use of motor vehicle: when schedular value not used
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When this section applies
(1) This section applies when the employer has not valued the motor vehicle using schedule 5, clause 5 (Fringe benefit values for motor vehicles).
Reduction
(2) In the calculation of the taxable value of the fringe benefit, the value of the benefit determined under sections RD 28 to RD 30 is reduced by an amount that is the applicable percentage of the cost (determined including GST under schedule 5, clause 4(a)) of the motor vehicle to the employee or the associated person as follows:
(a) if FBT is paid quarterly, 2.5%:
(b) if FBT is paid on an annual basis, 2.5% for each quarter in which the vehicle was part-owned by the employee or the associated person:
(c) if FBT is paid on an income year basis, 10%.
When period longer or shorter than income year
(3) In subsection (2)(c) and section RD 57(2)(c) and (3), if the period for which the employer accounts for FBT differs from a normal income year for the reasons described in subsection (4), the amount by which the taxable value of the fringe benefit is reduced is a percentage of the cost (determined including GST under schedule 5, clause 4(a)) of the motor vehicle to the employer or the associated person equal to the amount calculated using the formula—
Reasons for difference
(4) The period for which the employer has accounted may be longer or shorter than the normal income year because the employer has either—
(a) started or ceased business during that income year; or
(b) chosen, with the agreement of the Commissioner, to provide a fringe benefit return for the income year ending with the date of the annual balance of their accounts.
When vehicle owned less than whole year
(5) If an employee has not been part-owner of the motor vehicle for the whole of the income year, or the period referred to in subsection (4), a reduction under this section is reduced by the proportion of the number of days of the income year or period for which the employee was not a part-owner to the total number of days of that income year or period.
Defined in this Act: amount, associated person, business, Commissioner, employee, employer, FBT, fringe benefit, GST, income year, motor vehicle, pay, quarter,
Compare: 2004 No 35 s ND 1U
RD 57 Private use of motor vehicle: when schedular value used
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When this section applies
(1) This section applies when an employer has valued the motor vehicle using schedule 5, clause 5 (Fringe benefit values for motor vehicles).
Reduction
(2) In the calculation of the taxable value of the fringe benefit, the value of the benefit determined under sections RD 28 to RD 30 is reduced by an amount that is the applicable percentage of the cost, determined excluding GST, under schedule 5, clause 6(a) in the following way:
-
(a) when FBT is paid quarterly, by a percentage calculated using the formula—
2.5 + (2.5 × schedule 5 rate):
-
(b) when FBT is paid on an annual basis, by a percentage for each quarter in which the vehicle was part-owned by the employee or associated person calculated using the formula—
2.5 + (2.5 × schedule 5 rate):
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(c) when FBT is paid on an income year basis, by a percentage calculated using the formula—
10 + (10 × schedule 5 rate).
Schedule 5 rate
(3) In the formulas, schedule 5 rate is the rate of GST specified in schedule 5, clause 6(b), (c), (d), or (e) for the employer and the relevant quarter and relevant income year, as applicable.
Defined in this Act: amount, associated person, employee, employer, FBT, fringe benefit, GST, income year, motor vehicle, pay, quarter,
Compare: 2004 No 35 s ND 1V
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Options for payment of FBT
RD 58 Single rate option
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Rate for all quarters
(1) An employer who chooses to pay their FBT liability under the single rate option must pay FBT at the rate of 64% of the taxable value of a fringe benefit for each of the 4 quarters of a tax year.
Replacing final quarter calculation
(2) Despite subsection (1), an employer may ask the Commissioner to replace the FBT liability determined for the final quarter under this section with an amount calculated under section RD 59(4). The employer must provide the information necessary for the calculation.
Defined in this Act: amount, Commissioner, employer, FBT, fringe benefit, pay, quarter, tax year,
Compare: 2004 No 35 ss ND 1(2)(b), (4), ND 2(2)
RD 59 Alternate rate option
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Election
(1) This section applies when an employer chooses to pay their FBT liability under the alternate rate option.
First three quarters
(2) The employer may pay FBT for any or all of the first 3 quarters of a tax year at 49% of the taxable value of a fringe benefit.
Alternate rate
(3) The employer must pay FBT at the rate of 64% of the taxable value of a fringe benefit for any of the first 3 quarters of a tax year for which they do not pay at the rate of 49% under subsection (2).
Final quarter
(4) For the final quarter of the tax year, the employer must calculate the total pay of each employee under sections RD 50 and RD 53 for the tax year and subtract the amount of FBT payable for the previous 3 quarters of the tax year.
Decision irrevocable
(5) The decision to use the alternate rate option cannot be changed after the return is filed.
Defined in this Act: amount, employee, employer, FBT, fringe benefit, pay, quarter, tax year,
Compare: 2004 No 35 ss ND 1(2)(a), ND 2(1)–(4), ND 10(1)
RD 60 Close company option
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When this section applies
(1) This section applies in an income year when an employer that is a close company provides a fringe benefit to a shareholder-employee if, in the preceding income year,—
(a) the gross amounts of tax for both PAYE income payments and employer’s superannuation contributions for the tax year were no more than $100,000; or
(b) the employer did not employ any employees.
Income year basis
(2) The employer may choose to pay their FBT liability on an income year basis, informing the Commissioner of their decision in writing or by telephone no later than—
(a) the last day of the first quarter of the relevant income year; or
(b) the last day of the quarter in which the employer first starts employing employees, if subsection (1)(b) applies.
Rate or calculation
(3) The employer must pay FBT on the taxable value of fringe benefits in the income year in which they make their election and in later income years either—
(a) at the rate of 64% of the taxable value of a fringe benefit; or
(b) by calculating for the relevant income year the total pay of each employee under sections RD 50 and RD 53.
Replacing rate with calculated liability
(4) Despite subsection (3), the employer may ask the Commissioner to replace the FBT liability determined under subsection (3)(a) with a calculation under subsection (3)(b). The employer must provide the information necessary for the calculation.
Part-periods
(5) If an income year for which an employer chooses to pay FBT on an income year basis does not start on the same day as the first day of a quarter, the employer must treat the period between the first day of the quarter in which the first day of the income year falls and the first day of the income year as if it were a quarter.
More than 1 business
(6) If an employer ceases business and starts a new business, or operates 2 or more businesses at the same time, the total of all amounts of tax referred to in subsection (1) must be aggregated.
Defined in this Act: amount of tax, business, close company, Commissioner, employee, employer, employer’s superannuation contribution, FBT, fringe benefit, gross, income year, pay, PAYE income payment, quarter, shareholder-employee, tax year,
Compare: 2004 No 35 ss ND 1(2)(c), (5), ND 14, ND 15(7), (8)
RD 61 Small business option
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When this section applies
(1) This section applies when an employer provides a fringe benefit to an employee who is not a shareholder-employee in a tax year if, for the preceding tax year,—
(a) the gross amounts of tax for both PAYE income payments and employer’s superannuation contributions for the tax year were no more than $100,000; or
(b) the employer did not employ any employees.
Annual basis
(2) The employer may choose to pay their FBT liability on an annual basis, informing the Commissioner of their decision in writing or by telephone no later than—
(a) 30 June in the relevant tax year; or
(b) the last day of the quarter in which the employer first starts employing employees, if subsection (1)(b) applies.
Rate or calculation
(3) The employer must pay FBT on the taxable value of fringe benefits in the tax year in which they make their election and in later tax years either—
(a) at the rate of 64% of the taxable value of a fringe benefit; or
(b) by calculating for the relevant tax year the total pay of each employee under sections RD 50 and RD 53.
Replacing rate with calculated amount
(4) Despite subsection (3), the employer may ask the Commissioner to replace the FBT liability determined under subsection (3)(a) with a calculation under subsection (3)(b). The employer must provide the information necessary for the calculation.
Quarters in year
(5) For the purposes of subsection (3), the tax year is treated as if it were 4 consecutive quarters.
More than 1 business
(6) If an employer ceases business and starts a new business, or operates 2 or more businesses at the same time, the total of all amounts of tax referred to in subsection (1) must be aggregated.
Defined in this Act: amount of tax, business, Commissioner, employee, employer, employer’s superannuation contribution, FBT, fringe benefit, gross, pay, PAYE income payment, quarter, shareholder-employee, tax year,
Compare: 2004 No 35 ss ND 1(2)(c), (4), (5), ND 13
RD 62 Changes in payment periods
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No changes for simple or alternate rate options
(1) An employer’s decision to pay FBT on a quarterly basis under the single rate option or the alternate rate option cannot be changed.
When requirements for yearly basis no longer met
(2) If an employer who has chosen for a tax year to pay FBT on an income year basis or on an annual basis no longer meets the relevant requirements of section RD 60(1) or RD 61(1), the employer must pay their FBT liability for fringe benefits provided to employees on or after the first day of the tax year under the single rate option or the alternate rate option.
Choosing to change to quarterly basis
(3) An employer who has chosen for a tax year to pay FBT on an income year basis or on an annual basis, may choose at any time to pay FBT on a quarterly basis.
When change takes effect
(4) An employer who chooses to change their payment period under subsection (3) must pay their FBT liability on a quarterly basis for a fringe benefit provided from—
(a) the first day of the next tax year, if the employer previously paid on an annual basis; or
(b) the first day of the next income year of the employer, if the employer previously paid on an income year basis; or
(c) another date agreed by the employer and the Commissioner.
Choosing to change to income year basis
(5) If an employer who is eligible to use the close company option has been paying FBT on a quarterly basis, and chooses to change to payment on an income year basis, a calculation must be made under section RD 59 for the period—
(a) beginning immediately after the end of the last full tax year for which the employer pays FBT on a quarterly basis:
(b) ending immediately before the start of the first income year for which the election applies.
Part-periods
(6) If an employer changes their payment period from an income year to a quarter, and the day referred to in subsection (4)(b) is not the same day as the first day of a quarter, then for the purposes of the payment of FBT, the employer must treat the period between that day and the first day of the next quarter as if it were a quarter.
Defined in this Act: close company, Commissioner, employee, employer, FBT, income year, pay, quarter, tax year,
Compare: 2004 No 35 ss ND 2(4), ND 14(2B), ND 15
RD 63 When employer stops employing staff
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Who this section applies to
(1) This section applies in a tax year to an employer who stops employing staff and does not intend to replace them. But this section does not apply to an employer who continues to provide a fringe benefit to a former employee.
Treated as final quarter
(2) The employer must pay FBT under section RD 59, treating the quarter of the tax year in which the employment ended as if it were the final quarter.
Single rate option
(3) As an alternative to the application of section RD 50(2) or RD 53(3), the employer may choose to pay FBT under the single rate option—
(a) making the calculation in relation to the period from the start of the tax year to the date on which the employer stops employing staff; and
(b) taking into account any earlier payments of FBT made in relation to an employee.
Defined in this Act: employee, employer, FBT, fringe benefit, pay, quarter, tax year,
Compare: 2004 No 35 s ND 8
Employer’s superannuation contribution tax (ESCT) rules and employer’s superannuation contributions
Introductory provisions
RD 64 ESCT rules and their application
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Meaning
(1) The ESCT rules means—
(a) section CX 49 (Employer’s superannuation contributions); and
(b) sections RD 65 to RD 71; and
(c) sections 15C to 15M, 24J to 24P, 47, 48, and Part 9 of the Tax Administration Act 1994.
Application
(2) The ESCT rules apply to an employer who makes an employer’s superannuation contribution.
Defined in this Act: employer, employer’s superannuation contribution, ESCT rules,
Compare: 2004 No 35 ss NE 1, OB 1 SSCWT rules
RD 65 Employer’s superannuation contributions
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Contribution in money for benefit of employees
(1) An employer’s superannuation contribution means a contribution in money made to a superannuation fund by an employer for the benefit of 1 or more of their employees.
Determining amount of contribution
(2) The amount of an employer’s superannuation contribution is the sum of—
(a) the amount of the contribution received by the superannuation fund or, for a contribution paid to the Commissioner under the KiwiSaver Act 2006, received by the Commissioner for payment to the superannuation fund; and
(b) the amount of tax for the employer’s superannuation contribution.
Payment of amount of tax
(3) An employer who makes an employer’s superannuation contribution on behalf of an employee must pay to the Commissioner the amount of tax for the contribution. The amount is payable in 2 payment periods in a month as set out in section RA 15 (Payment dates for interim and other tax payments) unless they are an employer to whom section RD 22(3) applies. Subsection (4) overrides this subsection.
Contributions to KiwiSaver schemes
(4) Subsection (3) and, as applicable, sections RD 67 to RD 69, do not apply to an employer’s superannuation contribution (the current contribution) to the extent to which it is—
(a) for the employee’s KiwiSaver scheme; and
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(b) no more than the lesser of—
(i) an amount calculated under subsection (5):
(ii) an amount calculated under subsection (6).
Formula: subsection (4)(b)(i)
(5) The amount referred to in subsection (4)(b)(i) is calculated using the formula—
0.04 × total salary or wages − previous exempt contributions.
Formula: subsection (4)(b)(ii)
(6) The amount referred to in subsection (4)(b)(ii) is calculated using the formula—
total KiwiSaver contributions − previous exempt KiwiSaver contributions.
Definition of items in formulas
(7) In the formulas in subsections (5) and (6),—
(a) total salary or wages is the total amount of salary or wages paid to the employee in the KiwiSaver calculation period, excluding salary or wages for which there are no KiwiSaver contributions:
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(b) previous exempt contributions is the total amount of employer’s superannuation contributions for the employee to the extent to which the contributions, excluding the current contribution,—
(i) are made in the KiwiSaver calculation period; and
(ii) are contributions to which subsection (4) applies:
(c) total KiwiSaver contributions is the total amount of KiwiSaver contributions withheld from the salary or wages paid to the employee in the KiwiSaver calculation period:
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(d) previous exempt KiwiSaver contributions is the total amount of employer’s superannuation contributions for the employee’s KiwiSaver scheme to the extent to which the contributions, excluding the current contribution,—
(i) are made in the KiwiSaver calculation period; and
(ii) are contributions to which subsection (4) applies.
Contributions to complying superannuation funds
(8) Subsection (3) and, as applicable, sections RD 67 to RD 69, do not apply to a current contribution to the extent to which it is—
(a) for the employee’s complying superannuation fund; and
(b) is subject to the complying fund rules; and
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(c) no more than the lesser of—
(i) an amount calculated under subsection (9):
(ii) an amount calculated under subsection (10).
Formula: subsection (8)(c)(i)
(9) The amount referred to in subsection (8)(c)(i) is calculated using the formula—
0.04 × total salary or wages − previous exempt contributions.
Formula: subsection (8)(c)(ii)
(10) The amount referred to in subsection (8)(c)(ii) is calculated using the formula—
total complying fund contributions − previous exempt complying fund contributions.
Definition of items in formulas
(11) In the formulas in subsections (9) and (10),—
(a) total salary or wages is the total amount of salary or wages paid to the employee in the complying fund calculation period, excluding salary or wages for which there are no superannuation contributions for the employee’s complying superannuation fund to which the complying fund rules apply:
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(b) previous exempt contributions is the total amount of employer’s superannuation contributions for the employee to the extent to which the contributions, excluding the current contribution,—
(i) are made in the complying fund calculation period; and
(ii) are contributions to which subsection (4) or (8) applies:
(c) total complying fund contributions is the total amount of superannuation contributions withheld from the salary or wages paid to the employee in the complying fund calculation period to which the complying fund rules apply:
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(d) previous exempt complying fund contributions is the total amount of employer’s superannuation contributions for the employee’s complying superannuation fund to the extent to which the contributions, excluding the current contribution,—
(i) are made in the complying fund calculation period; and
(ii) are contributions to which subsection (8) applies.
When contribution paid
(12) The amount of employer’s superannuation contribution tax (ESCT) is treated for tax purposes as paid by the employer and received by the superannuation fund at the time the employer makes the contribution.
Some definitions
(13) In this section,—
complying fund calculation period, for a current contribution, means a period—
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(a) beginning with the later of—
(i) 1 year before the date on which the employer makes the current contribution:
(ii) the date on which the employer is first required to withhold a superannuation contribution to which the complying fund rules apply from the employee’s salary or wages; and
(b) ending with the date on which the employer makes the current contribution
KiwiSaver calculation period, for a current contribution, means a period—
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(a) beginning with the later of—
(i) 1 year before the date on which the employer makes the current contribution:
(ii) the date on which the employer is first required to withhold a KiwiSaver contribution from the employee’s salary or wages; and
(b) ending with the date on which the employer makes the current contribution
salary or wages has the meaning given in section 4 of the KiwiSaver Act 2006.
Defined in this Act: amount, amount of tax, Commissioner, complying fund calculation period, complying fund rules, complying superannuation fund, employee, employer, employer’s superannuation contribution, ESCT, KiwiSaver calculation period, KiwiSaver contribution, KiwiSaver scheme, pay, salary or wages, superannuation fund,
Compare: 2004 No 35 ss NE 2(2), NE 3, NE 3B, NE 6, OB 1 employer’s superannuation contribution, specified superannuation contribution
RD 66 Complying fund rules
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Rules for complying superannuation funds
(1) The complying fund rules, for a superannuation fund and an employee’s superannuation accumulation, means rules that—
(a) meet all the requirements of subsections (2) to (11); and
(b) do not detract from those requirements.
First requirement: KiwiSaver rules
(2) The first requirement is that the rules are the same, though modified as necessary, as the rules for KiwiSaver schemes set out in—
(a) section 196 of the KiwiSaver Act 2006; and
(b) schedule 1, clauses 4(1) to (4), 7, 9, and 17 of that Act.
Second requirement: withdrawals
(3) The second requirement is that the rules—
(a) allow a withdrawal in some or all of the circumstances described in the rules for KiwiSaver schemes in schedule 1, clauses 8 and 10 to 14 of the KiwiSaver Act 2006, modified as necessary, or in none of those circumstances; and
(b) do not allow a withdrawal under any circumstances other than those described in paragraph (a) or subsection (2).
Third requirement: transfers
(4) The third requirement is that the rules require—
(a) a transfer, if the employee asks, of some or all of an employee’s superannuation accumulation to another complying superannuation fund or to a KiwiSaver scheme, and for the latter when the requirements of the KiwiSaver Act 2006 are met; and
(b) that the complying fund rules apply to an employee’s superannuation accumulation if it is transferred to another complying superannuation fund under paragraph (a); and
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(c) a transfer of an employee’s superannuation accumulation to a KiwiSaver scheme, if the employee does not ask for a transfer under paragraphs (a) and (b), and the employee—
(i) is no longer eligible to be a member of their complying superannuation fund:
(ii) may not remain a member for any reason, but this paragraph does not apply to a transfer under paragraphs (a), (b), and (d), or a withdrawal of some or all of an employee’s superannuation accumulation under these rules; and
(d) a transfer of an employee’s superannuation accumulation to a KiwiSaver scheme, if the Government Actuary revokes approval of the superannuation fund as a complying superannuation fund and the accumulation is not transferred to another complying superannuation fund and is not subject to these rules.
Fourth requirement: notification
(5) The fourth requirement is that the rules require that—
(a) the Commissioner is notified if the employee’s superannuation accumulation must be transferred under subsection (4)(c) and (d):
(b) the fund provider is notified if the employee’s superannuation accumulation is transferred to another complying superannuation fund under subsection (4)(a).
Notification details
(6) For the purposes of subsection (5),—
(a) notification under subsection (5)(a) must include the name, address, and tax file number of the employee, the name and address of their employer, and the name and tax file number of the employee’s complying superannuation fund:
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(b) notification under subsection (5)(b) must include—
(i) notice of any written evidence given to the old fund provider under section MK 2(2) (Eligibility requirements):
(ii) the amount of tax credits received by the old fund provider under subpart MK (Tax credits for KiwiSaver schemes and complying superannuation funds):
(iii) information held by the old fund provider that would be relevant to the new provider in making a claim under section 68C of the Tax Administration Act 1994, such as information about the periods for which claims have already been made.
Fifth requirement: minimum contributions
(7) The fifth requirement is that the rules require total minimum superannuation contributions in relation to the employee of an amount equal to at least the amount required to be contributed to a superannuation scheme under section 25(1)(d) of the KiwiSaver Act 2006.
Calculating minimum contributions
(8) For the purposes of calculating whether or not superannuation contributions count towards the total minimum contributions under subsection (7), the rules—
(a) are the same as section 26 of the KiwiSaver Act 2006, modified as necessary; and
(b) do not count a superannuation contribution unless the contribution is for the payment of future benefits to the employee, or for fees, under the superannuation fund.
Sixth requirement: vesting in employee
(9) The sixth requirement is that the rules require that any employer’s superannuation contribution that counts towards the total minimum superannuation contributions described in subsection (7) vests completely in the employee immediately after the contribution is made.
Seventh requirement: funding benefits
(10) The seventh requirement is that the rules require that an employee’s superannuation accumulation is used to fund benefits that are calculated only by reference to the amount of the accumulation.
Eighth requirement: continuation as member
(11) The eighth requirement is that the rules commit an employee to continue to be a member unless otherwise provided by subsections (2) to (10).
Defined in this Act: amount, Commissioner, complying fund rules, complying superannuation fund, employee, employee’s superannuation accumulation, employer, employer’s superannuation contribution, fund provider, KiwiSaver scheme, notify, pay, superannuation fund, tax credit, tax file number,
Compare: 2004 No 35 s OB 1 complying fund rules
Calculating amounts of tax
RD 67 Calculating amounts of tax for employer’s superannuation contribution
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The amount of tax for an employer’s superannuation contribution is the amount determined under 1 of the following paragraphs, as applicable:
(a) if the employer chooses under section RD 69(1), the amount determined under schedule 1, part D, clause 1; or
(b) the amount determined under schedule 1, part D, clause 2.
Defined in this Act: amount, amount of tax, employer, employer’s superannuation contribution,
Compare: 2004 No 35 s NE 2
RD 68 Choosing to have amount treated as salary or wages
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With the agreement of their employer who makes an employer’s superannuation contribution on their behalf, an employee may choose to have some or all of an employer’s superannuation contribution made on their behalf treated as salary or wages under the PAYE rules.
Defined in this Act: employee, employer, employer’s superannuation contribution, PAYE rules, salary or wages,
Compare: 2004 No 35 s NE 2A(1), (2)
RD 69 Choosing different rates for employer’s superannuation contributions
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ESCT rate threshold amounts
(1) An employer who makes an employer’s superannuation contribution on behalf of an employee may choose to pay the amount of tax for the contribution at the rate set out in schedule 1, part D, clause 1 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for the ESCT rate threshold amount for the employee.
PAYE intermediaries
(2) For the purposes of subsection (1), an employer includes a PAYE intermediary.
Defined in this Act: amount of tax, employee, employer, employer’s superannuation contribution, ESCT rate threshold amount, pay, PAYE intermediary, salary or wages,
Compare: 2004 No 35 s NE 2B
RD 70 Calculating amounts of tax on failure to withhold
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When this section applies
(1) This section applies if an employer or PAYE intermediary does not withhold an amount of tax for an employer’s superannuation contribution under section RD 65(3).
Calculation of amount of tax
(2) The amount of tax is calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) tax rate is the basic rate set out in schedule 1, part D (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) at the time the contribution was made:
(b) contribution to fund is the amount of the contribution received by the superannuation fund excluding the amount of tax:
(c) tax already paid is any amount of tax for the contribution that has already been paid.
Defined in this Act: amount, amount of tax, basic rate, employer, employer’s superannuation contribution, pay, PAYE intermediary, superannuation fund,
Compare: 2004 No 35 s NE 5
RD 71 Amounts of tax treated as paid to and received by superannuation funds
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In determining whether an employer has met their obligation to pay a contribution to a superannuation fund—
(a) the employer or their PAYE intermediary is treated as having paid to the superannuation fund an amount of tax under the ESCT rules or the PAYE rules, if applicable; and
(b) the fund is treated as having received the amount referred to under paragraph (a); and
(c) the payment and receipt are treated as having occurred when the superannuation fund received the employer’s superannuation contribution.
Defined in this Act: amount of tax, employer, employer’s superannuation contribution, ESCT rules, pay, PAYE intermediary, PAYE rules, superannuation fund,
Compare: 2004 No 35 s NE 6
Tax on certain withdrawals from superannuation funds
RD 72 Recovery of tax paid by superannuation funds
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When this section applies
(1) This section applies for the purposes of section CS 1 (Withdrawals) when a person who is a member of a superannuation fund makes a withdrawal from the fund.
Amount of recovery
(2) The trustee of the fund may subtract from the amount of the withdrawal an amount calculated using the formula—
tax rate × superannuation fund’s income.
Definition of items in formula
(3) In the formula,—
(a) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 3 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits):
(b) superannuation fund’s income is the income of the superannuation fund calculated under section CS 1.
Defined in this Act: amount, income, income tax, superannuation fund, trustee,
Compare: 2004 No 35 s NEA 1
Subpart RE—Withholding tax on resident passive income (RWT)
Introductory provisions
RE 1 RWT rules and their application
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Meaning
(1) The RWT rules means—
(a) this subpart; and
(b) sections LA 4, LA 6, and LB 3 (which relate to tax credits for RWT); and
(c) sections 15T, 25 to 28, 32E to 32L, 50 to 55, 78D, and 99, Part 9, sections 170 to 172, and 185 of the Tax Administration Act 1994.
Application
(2) The RWT rules apply to a person who pays an amount of resident passive income.
Defined in this Act: amount, pay, resident passive income, RWT rules,
Compare: 2004 No 35 s OB 1 RWT rules
RE 2 Resident passive income
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Interest, dividends, and certain distributions
(1) Resident passive income means an amount paid to a person resident in New Zealand to the extent to which it consists of—
(a) interest:
(b) a dividend:
(c) a taxable Maori authority distribution:
(d) a replacement payment paid to a person under a share-lending arrangement.
Exclusions and inclusions
(2) Subsections (3) to (5) override subsection (1).
Exclusions from interest
(3) The following amounts are excluded from interest under this section
(a) exempt interest:
(b) interest derived by a person who holds an RWT exemption certificate issued under section RE 27:
(c) interest that is non-resident passive income paid to a person resident in New Zealand who is acting as the agent or nominee of a non-resident:
(d) interest derived from outside New Zealand by a non-resident:
(e) interest that is exempt income under section CW 27 (Certain income derived by transitional resident):
(f) interest paid by a company and derived by another company when both companies are part of the same group of companies at the time of the payment:
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(g) interest paid to an intermediary—
(i) by a client in relation to the operation of a tax pooling account; or
(ii) by the Commissioner under section RP 18 (Deposits in tax pooling accounts):
(h) interest payable under section 120D or Part 7 of the Tax Administration Act 1994.
Inclusions in interest
(4) For the purposes of this section, the following amounts are treated as interest and not as a dividend:
(a) a dividend that a building society pays to a member in relation to a withdrawable share in the society:
(b) a dividend that a friendly society pays to its member in relation to a share in the society.
Exclusions from dividends
(5) The following amounts are excluded from a dividend under this section:
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(a) a dividend that is exempt income—
(i) through the application of any of sections CW 9 to CW 11 (which relate to income from equity); or
(ii) under section CW 27 (Certain income derived by transitional resident); or
(iii) under section CW 64 (Exemption under other Acts):
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(b) an amount treated as a dividend under—
(i) section CB 34(5)(a) (Amounts derived by members from mutual associations); or
(ii) sections GB 23 to GB 25 (which relate to excessive remuneration):
(c) an amount of attributed repatriation:
(d) a dividend derived by a person who holds an RWT exemption certificate issued under section RE 27:
(e) a dividend that is non-resident passive income:
(f) a dividend derived by a non-resident other than a dividend derived from New Zealand:
(g) a dividend paid by a company and derived by another company when both are part of the same group of companies at the time of the payment.
Beneficiary income
(6) If a person derives an amount described in this section in their capacity as trustee and the amount is beneficiary income, the amount is treated as not derived by the trustee.
Defined in this Act: amount, attributed repatriation, beneficiary income, building society, Commissioner, company, derived from New Zealand, dividend, exempt income, exempt interest, friendly society, group of companies, interest, New Zealand, non-resident, non-resident passive income, pay, replacement payment, resident in New Zealand, resident passive income, RWT exemption certificate, share, share-lending arrangement, tax pooling account, taxable Maori authority distribution, trustee, withdrawable share,
Compare: 2004 No 35 s NF 1(2), (4), (5)
Withholding obligations
RE 3 Obligation to withhold RWT
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Obligation to withhold and pay
(1) A person to whom section RE 1(2) applies is liable to withhold resident withholding tax (RWT) and pay the amount to the Commissioner if they make the payment and—
(a) meet 1 of the requirements set out in section RE 4:
(b) are not excluded under sections RE 5 and RE 6 from the obligation to withhold:
(c) they are an RWT proxy in relation to the payment.
Non-cash dividends
(2) For the purposes of subsection (1), if the payment is a non-cash dividend, the person must calculate the amount of tax under section RE 14 and pay the amount to the Commissioner.
Defined in this Act: amount, amount of tax, Commissioner, non-cash dividend, pay, RWT, RWT proxy,
Compare: 2004 No 35 s NF 2(1A), (1AB)
RE 4 Persons who have withholding obligations
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Requirements
(1) A person referred to in section RE 3(1)(a) must meet at least 1 requirement of each of subsections (2) and (3) in relation to a payment of resident passive income.
Requirement for person
(2) The person must be, at the time the payment is made,—
(a) resident in New Zealand; or
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(b) if not resident in New Zealand,—
(i) carrying on a taxable activity in New Zealand through a fixed establishment in New Zealand; and
(ii) not excluded under subsection (4).
Requirements for person and payment
(3) In addition to meeting a requirement of subsection (2), 1 of the following requirements must be met at the time the payment is made
(a) the person holds an RWT exemption certificate:
(b) the payment is made in whole or in part in carrying on a taxable activity, whether or not the person acts as agent or trustee for another person:
(c) the payment is a dividend:
(d) the payment is a taxable Maori authority distribution:
(e) the payment is a replacement payment under a share-lending arrangement.
When person not treated as resident or carrying on taxable activity
(4) For the purposes of subsection (2), a person who is not resident in New Zealand and is carrying on a taxable activity in New Zealand through a fixed establishment in New Zealand, is treated as not meeting the requirements of the subsection if they establish that, at the time the payment is made,—
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(a) either,—
(i) for interest or a dividend, the payment is attributable to or effectively connected with a fixed establishment of the person outside New Zealand; or
(ii) for a dividend, the company is not resident in New Zealand; and
(b) all amounts payable in relation to money lent or shares to which the payment relates are payable in a currency other than New Zealand currency.
Currency conversion
(5) A person who is required to withhold RWT in relation to a payment of resident passive income that is in a currency other than New Zealand currency may withhold and pay the amount of the RWT in the foreign currency.
Conversion rates: credit
(6) For the purposes of subsection (5), in the calculation of the amount of RWT to be credited against income tax or treated as FDP, the amount must be converted to New Zealand currency at the option of the person deriving the resident passive income either at—
(a) the close of trading spot exchange rate on the day the RWT is paid; or
(b) an exchange rate specified by the Commissioner for this purpose in relation to the month in which the RWT is paid.
Conversion rates: payment
(7) For the purposes of subsection (5), in the calculation of the amount of RWT to be paid to the Commissioner, the amount must be converted to New Zealand currency either at—
(a) the close of trading spot exchange rate on the first working day of the month after the month in which the day the RWT is withheld; or
(b) a conversion rate applying under section OB 60(6) (Imputation credits attached to dividends) if the resident passive income is a dividend and the person required to withhold RWT under subsection (5) is an Australian ICA company that chooses to use that rate.
Defined in this Act: amount, Australian ICA company, close of trading spot exchange rate, Commissioner, company, dividend, FDP, fixed establishment, income tax, interest, money lent, New Zealand, pay, replacement payment, resident in New Zealand, resident passive income, RWT, RWT exemption certificate, share, share-lending arrangement, taxable activity, taxable Maori authority distribution, trustee, working day,
Compare: 2004 No 35 s NF 2(3), (4)
RE 5 No withholding obligation in certain circumstances
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When this section applies
(1) This section applies when a person (person A)—
(a) pays an amount to another person (person B); or
(b) receives a payment while acting as agent or bare trustee for person B.
No obligation if person B exempt
(2) For the purposes of determining whether person A is required under section RE 4 to withhold RWT, the payment is treated as not consisting of resident passive income if person A has established that person B holds an RWT exemption certificate issued under section RE 27.
No obligation if person B transitional resident
(3) If person A receives an amount of resident passive income while acting as agent or bare trustee for person B, they are not required to withhold RWT in relation to the amount when—
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(a) person B notifies person A that—
(i) they are a transitional resident for a period; and
(ii) an amount paid during the period from a particular source is exempt income of person B under section CW 27 (Certain income derived by transitional resident); and
(b) person A receives the payment during the period from the particular source; and
(c) person A has no reasonable grounds for believing that the payment is not exempt income of person B under section CW 27.
Defined in this Act: amount, exempt income, notify, pay, resident passive income, RWT, RWT exemption certificate, transitional resident, trustee,
Compare: 2004 No 35 s NF 2(7), (7B)
RE 6 When obligation to withhold unreasonable
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When this section applies
(1) This section applies when a person (person A) who is a person listed in a paragraph in section 32E(2)(a) to (h) of the Tax Administration Act 1994—
(a) receives an amount from another person (person B); or
(b) makes a payment at person B’s request.
No obligation if unreasonable
(2) For the purposes of determining whether person A is required under section RE 4 to withhold RWT, the payment is treated as not consisting of resident passive income of person B to the extent to which—
(a) person A could not reasonably be expected to be aware that the payment was resident passive income; or
(b) for an amount that is a redemption payment, person A could not reasonably be expected to be aware of the amount that consisted of resident passive income.
Defined in this Act: amount, pay, redemption payment, resident passive income, RWT,
Compare: 2004 No 35 s NF 2(8)
RE 7 When resident passive income paid to trustees
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Who this section applies to
(1) This section applies when—
(a) an amount is paid to a person (person A) who is acting as trustee for another person (person B) at the time; and
(b) some or all of the amount is resident passive income other than a replacement payment under a share-lending arrangement; and
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(c) person A—
(i) does not hold an RWT exemption certificate at the time of the payment; and
(ii) is paid the amount in the conduct of a taxable activity carried on by them; and
(iii) is not a nominee to whom section RE 8 applies.
Obligation to withhold
(2) At the time the payment is made and to the extent to which it has not already been withheld, person A must withhold RWT for the payment and pay it to the Commissioner.
Relationship with section RE 9
(3) Section RE 9 overrides this section.
Defined in this Act: amount, Commissioner, nominee, pay, replacement payment, resident passive income, RWT, RWT exemption certificate, share-lending arrangement, taxable activity, trustee,
Compare: 2004 No 35 s NF 3(1), (2)
RE 8 When resident passive income paid to nominees
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Who this section applies to
(1) This section applies when—
(a) an amount is paid to a person (person A) who is a nominee for another person (person B) at the time; and
(b) some or all of the amount is resident passive income; and
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(c) person A—
(i) holds an RWT exemption certificate at the time of the payment; or
(ii) is paid the amount in the conduct of a taxable activity carried on by them.
Obligation to withhold
(2) At the time the payment is received and to the extent to which it has not already been withheld, person A must withhold RWT for the payment and pay it to the Commissioner.
Relationship with section RE 9
(3) Section RE 9 overrides this section.
Defined in this Act: amount, Commissioner, nominee, pay, resident passive income, RWT, RWT exemption certificate, taxable activity,
Compare: 2004 No 35 s NF 3(1)
RE 9 Agents’ or trustees’ obligations in relation to certain dividends
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When this section applies
(1) This section applies when an agent or trustee is required to withhold RWT from certain dividends.
Dividends other than those having the nature of interest
(2) To the extent to which the resident passive income consists of a dividend other than a dividend treated as interest, an amount of tax that must be withheld under section RE 3 is treated as an amount to which the RWT rules apply and not as an amount to which the FDP rules apply.
Non-cash dividends
(3) To the extent to which the resident passive income consists of a non-cash dividend, the trustee or agent must pay to the Commissioner an amount equal to the amount of tax for the dividend as if it were the amount of tax required to be withheld and paid under the RWT rules.
Obligation of person paying not overridden
(4) This section does not override the obligation of the person who pays the resident passive income to the agent or trustee to withhold RWT for the payment under section RE 4.
Defined in this Act: amount, amount of tax, Commissioner, dividend, dividend treated as interest, FDP rules, non-cash dividend, pay, resident passive income, RWT, RWT rules, trustee,
Compare: 2004 No 35 s NF 3(3)–(5)
RE 10 Special rule relating to payments of interest
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Threshold for amounts of interest
(1) This section applies to a person who—
(a) pays resident passive income consisting of interest; and
(b) either does not hold an RWT exemption certificate at the time of the payment, or is described in section 32E(2)(k) or (l) of the Tax Administration Act 1994 or holds a certificate under section 32I of that Act; and
(c) has paid an amount of resident passive income consisting of interest that totals less than $5,000 in the tax year before the tax year in which the payment is made; and
(d) would be liable to withhold RWT for the resident passive income in the absence of this section.
Minimum amount
(2) Despite section RE 4(3), the person is required to withhold the amount of tax for the payment only if the total resident passive income consisting of interest paid by the person in the tax year in which the payment is made is more than $5,000.
Defined in this Act: amount, amount of tax, interest, pay, resident passive income, RWT, RWT exemption certificate, tax year,
Compare: 2004 No 35 s NF 2(5)
RE 11 Notification by companies
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When this section applies
(1) This section applies when a company that is not a trustee or a Maori authority is entitled to receive a payment of resident passive income other than a replacement payment under a share-lending arrangement.
Notification required
(2) The company must notify the person making the payment that they are a company.
Withholding rate
(3) The person making the payment must withhold RWT for the payment at the relevant rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for a payment made on or after the date of notification.
Consequence of failure to notify
(4) If the company does not notify the person making the payment, the person must apply the higher withholding rate set out in section RE 19(3).
Defined in this Act: company, Maori authority, notify, pay, replacement payment, resident passive income, RWT, share-lending arrangement, trustee,
Compare: 2004 No 35 s NF 2B
Calculating amounts of tax
RE 12 Interest
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When this section applies
(1) This section applies when a person makes a payment of resident passive income that consists of interest.
Calculation of amount of tax
(2) The amount of tax for the payment that the person must withhold and pay to the Commissioner is calculated using the formula—
(tax rate × (interest paid + foreign withholding tax)) − foreign withholding tax.
Definition of items in formula
(3) In the formula,—
(a) tax rate is the basic rate set out in schedule 1, part D, clause 4 or 5 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits):
(b) interest paid is the interest paid before the amount of tax is determined:
(c) foreign withholding tax is the amount of foreign withholding tax paid or payable on the interest paid.
Defined in this Act: amount of tax, Commissioner, foreign withholding tax, interest, pay, resident passive income,
Compare: 2004 No 35 s NF 2(1)(a)
RE 13 Dividends other than non-cash dividends
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When this section applies
(1) This section applies when a person makes a payment of resident passive income that consists of a dividend other than a non-cash dividend.
Calculation of amount of tax
(2) The amount of tax for the payment that the person must withhold and pay to the Commissioner is calculated using the formula—
(tax rate × (dividend paid + tax paid or credit attached)) − tax paid or credit attached.
Definition of items in formula
(3) In the formula,—
(a) tax rate is the basic rate set out in schedule 1, part D, clause 6 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits):
(b) dividend paid is the amount of the dividend paid before the amount of tax is determined:
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(c) tax paid or credit attached is the total of the following amounts:
(i) if the dividend is paid in relation to shares issued by an imputation credit account (ICA) company, the amount of an imputation credit attached to the dividend:
(ii) if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable on the amount of dividend:
(iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of an FDP credit attached to the dividend.
Defined in this Act: amount, amount of tax, Commissioner, company, dividend, FDP credit, foreign withholding tax, ICA company, imputation credit, non-cash dividend, pay, resident in New Zealand, resident passive income, share,
Compare: 2004 No 35 s NF 2(1)(b)
RE 14 Non-cash dividends other than bonus issues in lieu
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When this section applies
(1) This section applies when a person makes a payment of resident passive income that consists of a non-cash dividend other than a bonus issue in lieu.
Calculation of amount of tax
(2) The amount of tax for the payment that the person must pay under subsection (4) to the Commissioner is calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits):
(b) dividend paid is the amount of the dividend paid before the amount of tax is determined:
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(c) tax paid or credit attached is the total of the following amounts:
(i) if the dividend is paid in relation to shares issued by an ICA company, the amount of an imputation credit attached to the dividend:
(ii) if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable on the amount of dividend:
(iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of an FDP credit attached to the dividend.
Treatment as if amount of tax withheld
(4) For the purposes of subsection (2), the person must pay to the Commissioner the amount calculated as if it were the amount of tax required to be withheld and paid under the RWT rules.
Defined in this Act: amount, amount of tax, bonus issue in lieu, Commissioner, company, FDP credit, foreign withholding tax, ICA company, imputation credit, non-cash dividend, pay, resident in New Zealand, resident passive income, RWT rules, share,
Compare: 2004 No 35 s NF 2(1)(c), (2)
RE 15 Bonus issues in lieu
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When this section applies
(1) This section applies when a person makes a payment of resident passive income that consists of a dividend that is a bonus issue in lieu.
Calculation of amount of tax
(2) The amount of tax for the payment is calculated using the formula—
(tax rate × (alternative amount + tax paid or credit attached)) − tax paid or credit attached.
Definition of items in formula
(3) In the formula,—
(a) tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits):
(b) alternative amount is the amount of money offered as an alternative to the bonus issue before the amount of tax is determined:
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(c) tax paid or credit attached is the total of the following amounts:
(i) if the dividend is paid in relation to shares issued by an ICA company, the amount of an imputation credit attached to the dividend:
(ii) if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable on the amount of dividend:
(iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of an FDP credit attached to the dividend.
Defined in this Act: amount, amount of tax, bonus issue in lieu, company, dividend, FDP credit, foreign withholding tax, ICA company, imputation credit, pay, resident in New Zealand, resident passive income, share,
Compare: 2004 No 35 s NF 2(1)(d)
RE 16 Taxable Maori authority distributions
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When this section applies
(1) This section applies when a Maori authority makes a payment of resident passive income that consists of a taxable Maori authority distribution in the form of a sum of money or an amount of a credit in the balance of an account with the Maori authority.
Calculation of amount of tax
(2) The amount of tax for the payment that the Maori authority must withhold and pay to the Commissioner is calculated using the formula—
(tax rate × (distribution amount + credit attached)) − credit attached.
Non-cash amounts
(3) Despite subsection (2), if the resident passive income is not paid in cash, the amount of tax for the payment that the Maori authority must pay to the Commissioner is calculated using the formula—
Definition of items in formulas
(4) In the formulas in subsections (2) and (3),—
(a) tax rate is the basic rate set out in schedule 1, part D, clause 6 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits):
(b) distribution amount is the amount of the distribution before the amount of tax is determined:
(c) credit attached is the amount of the Maori authority credit attached to the distribution.
Defined in this Act: amount, amount of tax, Commissioner, Maori authority, Maori authority credit, pay, resident passive income, taxable Maori authority distribution,
Compare: 2004 No 35 s NF 2(1)(e), (f)
RE 17 Replacement payments under share-lending arrangements
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When this section applies
(1) This section applies when a person makes a payment of resident passive income that consists of a replacement payment under a share-lending arrangement.
Calculation of amount of tax
(2) The amount of tax for the payment is calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits):
(b) payment is the amount of the replacement payment excluding an imputation credit attached under section OB 64 (Replacement payments):
(c) credit attached is the amount of an imputation credit attached to the replacement payment under section OB 64:
(d) credit transferred is the amount of an imputation credit shown in a credit transfer notice relating to the replacement payment:
(e) FDP credit transferred is the amount of an FDP credit shown in a credit transfer notice relating to the replacement payment.
Defined in this Act: amount, amount of tax, credit transfer notice, FDP credit, imputation credit, pay, replacement payment, resident passive income, share-lending arrangement,
Compare: 2004 No 35 s NF 2(1)(g)
RE 18 Payments made by RWT proxies
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Calculation of amount of tax
(1) A person who is an RWT proxy for a person paying resident passive income that consists of a dividend must withhold an amount of tax for the payment calculated using the formula—
Definition of items in formula
(2) In the formula,—
(a) tax rate is the basic rate set out in schedule 1, part D, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits):
(b) amount paid is the amount of the dividend paid.
Defined in this Act: amount, amount of tax, dividend, pay, resident passive income, RWT proxy,
Compare: 2004 No 35 s NF 2(1B)
RE 19 Choosing higher rates
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When this section applies
(1) This section applies when a person (person A) is entitled to receive resident passive income other than a replacement payment under a share-lending arrangement.
Person choosing rate
(2) Person A may notify the person who is required to withhold the amount of tax for the payment to use 1 of the rates set out in schedule 1, part D, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits).
Company choosing rate
(3) Despite subsection (1), if person A is a company, they may notify the person making the payment to withhold the amount of tax for the payment at the rate set out in schedule 1, part D, clause 3.
Application of rate
(4) The rate chosen under subsection (2) or (3) applies to amounts of tax withheld from the date on which notice is given.
Defined in this Act: amount of tax, company, notify, pay, replacement payment, resident passive income, share-lending arrangement, tax withheld,
Compare: 2004 No 35 ss NF 2A(1), (3), NF 2D(1), (3)
Paying amounts of tax
RE 20 Paying RWT
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A person who is required under the RWT rules to withhold RWT must pay the amount of tax to the Commissioner under sections RA 15 and RA 16 (which relate to payment dates and the basis on which the payment dates are set).
Defined in this Act: amount of tax, Commissioner, pay, RWT, RWT rules,
Compare: 2004 No 35 s NF 4(1), (2)
RE 21 Basis for payment of RWT
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When this section applies
(1) Subsections (2) to (5) apply for the purposes of section RA 6(1) (Withholding and payment obligations for passive income) to a person who is required under the RWT rules to withhold RWT for resident passive income consisting of interest.
Interest of more than $500 in total
(2) If the person estimates for a tax year that they will be required to withhold more than $500 in total for each month of the tax year, they must pay the amount of tax to the Commissioner on a monthly basis.
Interest of less than $500 in total
(3) If the person estimates for a tax year that they will be required to withhold less than $500 in total for each month of the tax year, they must pay the amount of tax to the Commissioner in 2 instalments as described in section RA 15 (Payment dates for interim and other tax payments).
When subsection (5) applies
(4) Subsection (5) applies when the person has withheld more than $500 in total amounts of tax for a 2 month-period from the start of 1 month in a tax year to the end of the month following that month.
Total in 2-month period
(5) Despite subsections (2) and (3), the person must pay the total amount of tax to the Commissioner for the 2-month period by the 20th day of the month following the end of the period.
When subsection (7) applies
(6) Subsection (7) applies for the purposes of section RA 6(1) to a person who is required under the RWT rules to withhold RWT for resident passive income consisting of a dividend, a replacement payment, or a taxable Maori authority distribution.
Dividends, replacement payments, and taxable Maori authority distributions
(7) The person must pay the amount of tax to the Commissioner on a monthly basis.
Defined in this Act: amount of tax, Commissioner, dividend, interest, pay, replacement payment, resident passive income, RWT, RWT rules, tax year, taxable Maori authority distribution,
Compare: 2004 No 35 s NF 4(1)–(5), (7), (8)
RE 22 When payment treated as non-resident passive income
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When this section applies
(1) This section applies when—
(a) a person (person A) is liable to pay resident passive income to a person not resident in New Zealand (person B); or
(b) person A receives resident passive income as agent or trustee for person B.
No liability
(2) If person A concludes on reasonable grounds after making reasonable inquiries that an amount is non-resident passive income derived by person B, and person A has complied with their obligations under this Act and the Tax Administration Act 1994 in relation to paying non-resident withholding tax (NRWT) to the Commissioner, they have no liability under the RWT rules in relation to the amount.
Payment derived by non-resident
(3) For the purposes of determining person A’s liability under the RWT rules, the amount is treated as derived by a non-resident.
Defined in this Act: amount, Commissioner, pay, non-resident, non-resident passive income, NRWT, resident in New Zealand, resident passive income, RWT rules, trustee,
Compare: 2004 No 35 s NF 5
RE 23 When amount of tax treated as FDP credit
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When this section applies
(1) This section applies when a company withholds RWT for resident passive income consisting of a dividend other than a dividend treated as interest.
FDP credit
(2) The amount is treated as an FDP credit attached to the dividend by the company which is treated as a FDPA company for the purposes of sections LE 6, LE 9, LF 1, LF 3, LF 4, and LF 6 to LF 9 (which relate to the amount and treatment of FDP credits), and section 185 of the Tax Administration Act 1994.
Defined in this Act: company, dividend, dividend treated as interest, FDPA company, FDP credit, resident passive income, RWT,
Compare: 2004 No 35 s NF 8(1)
RE 24 When amount of tax treated as Maori authority credit
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When this section applies
(1) This section applies when a Maori authority withholds an amount of tax for a taxable Maori authority distribution.
Maori authority credit
(2) The amount is treated as a Maori authority credit attached to the distribution by the Maori authority for the purposes of sections LO 1 to LO 4, OK 16, OK 19, and OK 20 (which relate to the amount and treatment of Maori authority credits).
Defined in this Act: amount of tax, Maori authority, Maori authority credit, taxable Maori authority distribution,
Compare: 2004 No 35 s NF 8A(1)
RE 25 When amount of tax treated as imputation credit
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When this section applies
(1) This section applies when a share user under a share-lending arrangement withholds under the RWT rules an amount of tax for a replacement payment.
Imputation credit
(2) The amount of tax withheld—
(a) is treated for the share supplier as an imputation credit attached to the replacement payment in addition to an imputation credit that the share user attached to the payment under section OB 64 (Replacement payments); and
(b) does not give rise under section LB 3 (Tax credits for resident withholding tax) to a tax credit or refund for the share supplier.
Defined in this Act: amount of tax, imputation credit, replacement payment, RWT rules, share-lending arrangement, share supplier, share user, tax credit,
Compare: 2004 No 35 s NF 8B
RE 26 Payment by proxy
RWT exemption certificates
RE 27 RWT exemption certificates
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Application
(1) A person may apply to the Commissioner for an RWT exemption certificate if—
(a) they are a person listed in section 32E(2) of the Tax Administration Act 1994; and
(b) they meet the requirements of section 32G of that Act.
When certificate expires
(2) An RWT exemption certificate expires if—
(a) the holder loses the basis of their exemption; or
(b) the Commissioner cancels the certificate under section 32L of the Tax Administration Act 1994.
Notifying Commissioner
(3) If the holder of an RWT exemption certificate becomes aware they no longer meet the requirements, they must notify the Commissioner under section 32K of the Tax Administration Act 1994.
Defined in this Act: Commissioner, notify, RWT exemption certificate,
Compare: 2004 No 35 ss NF 9(1), NF 11(1), (2)
RE 28 When certificates expire
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When this section applies
(1) This section applies in a month when a person’s RWT exemption certification expires. But the section does not apply if the person continues to be required to withhold RWT in the course of carrying out a taxable activity.
Payment of outstanding amounts of tax
(2) The person must pay to the Commissioner all amounts of RWT withheld and not paid to the Commissioner by the 20th day of the month following the month in which the certificate expired.
Defined in this Act: amount, Commissioner, pay, RWT, RWT exemption certificate, taxable activity,
Compare: 2004 No 35 s NF 4(6)
RE 29 Establishing whether person holds certificate
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When this section applies
(1) This section applies for the purposes of section RE 5(2) to set out the ways available to person A to establish whether person B is a person holding an RWT exemption certificate.
Requirements
(2) Person A may establish that—
(a) they have taken reasonable steps to confirm that person B is a person listed in section 32E(2)(a) to (h) of the Tax Administration Act 1994; or
(b) except in relation to a person listed in section 32E(2)(k) or (l) or to whom a certificate has been provided under section 32I, they have been given person B’s tax file number and have been notified that person B holds an RWT exemption certificate; or
(c) they have seen person B’s certificate and have taken reasonable steps to confirm that person B is the person named in the certificate.
Additional requirements
(3) In addition to the requirements of subsection (2), the following requirements must be met in relation to person B’s RWT exemption certificate:
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(a) no notice of cancellation has been published in the Gazette—
(i) for interest, more than 5 working days before the date on which the money was lent:
(ii) for a dividend or a taxable Maori authority distribution, more than 5 working days before the date on which payment was made:
(b) person A has not been advised by the Commissioner or person B of a cancellation of a certificate more than 5 working days before the date on which payment is made:
(c) person A has no other grounds for believing that person B is not eligible for a certificate.
Later certificate
(4) For the purposes of subsection (3)(a) and (b), if a notice of cancellation has been published or if person A has been advised as described, the requirements are still met if—
(a) a certificate has been provided to person B and notified in the Gazette in the period that is after the notice of cancellation and more than 5 working days before the date on which the payment is made; or
(b) person A has seen a certificate provided to person B after the date of publication of the notice of cancellation.
When person B listed or income of particular type
(5) For the purposes of this section, person A has no ground for believing that the payment is income derived by a person other than person B when—
(a) person B is a person listed in section 32E(2)(a) to (h) of the Tax Administration Act 1994; and
(b) the payment is not interest, a dividend, or a taxable Maori authority distribution derived by person B as trustee on behalf of a third person.
Defined in this Act: Commissioner, dividend, income, interest, notice, notify, pay, RWT exemption certificate, tax file number, taxable Maori authority distribution, trustee, working day,
Compare: 2004 No 35 s NF 2(7)
RE 30 When unincorporated bodies hold certificates
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When this section applies
(1) This section applies when—
(a) an unincorporated body that is carrying on a taxable activity holds an RWT exemption certificate; and
(b) the exemption relates to the carrying on of the taxable activity.
Treatment of payments made by unincorporated bodies
(2) For the purposes of the RWT rules, a payment that the body makes in the course of carrying on the taxable activity is treated as a payment made by the body and not by a member of the body. This subsection overrides subsection (7).
Treatment of payments to members of unincorporated bodies
(3) For the purposes of the RWT rules, a payment made to a member of the body in their capacity as a member and in the course of carrying on the taxable activity of the body is treated as a payment made to the body and not to the member.
Joint and several liability for amounts of tax
(4) Each member of the body is jointly and severally liable for the RWT that the body is required to pay for as long as the member remains part of the body.
Natural persons, partnerships, joint ventures, trustees
(5) For the purposes of subsection (4),—
(a) if the member is a natural person, their estate is liable after their death for an amount payable that remains unpaid:
(b) if the body is a partnership, joint venture, or the trustees of a trust, a member continues as a member until the date the Commissioner is notified of a change of membership.
Members and committees
(6) Subsection (7) applies to an unincorporated body other than a partnership, joint venture, or the trustees of a trust, when the business of the body is managed by the members or a committee of its members.
Responsibility of committee officers and members
(7) If something is required to be done under the RWT rules by or on behalf of the body, each member holding office as president, chair, treasurer, secretary, or a similar office is jointly and severally responsible. In default, each member holding office bears the responsibility. Action taken by 1 officer or committee member is sufficient.
Joint and several liability for actions required
(8) If something is required to be done under the RWT rules by or on behalf of the body, each member is jointly and severally liable to do it. However, action taken by 1 member is sufficient. Subsection (7) overrides this subsection.
Changes in membership
(9) A change in membership of the unincorporated body has no effect for the purposes of the RWT rules. Subsection (5)(b) overrides this subsection.
Some definitions
(10) In this section,—
member means a partner, joint venturer, a trustee, or a member of a body
partnership and partner have the meanings given in the Partnership Act 1908.
Defined in this Act: amount, member, partner, partnership, pay, RWT, RWT exemption certificate, RWT rules, taxable activity, trustee,
Compare: 2004 No 35 s NF 10
Subpart RF—Withholding tax on non-resident passive income (NRWT)
Introductory provisions
RF 1 NRWT rules and their application
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Meaning
(1) The NRWT rules means—
(a) this subpart; and
(b) section LB 5 (Tax credits for non-resident withholding tax); and
(c) sections LJ 1 to LJ 3, LJ 6, and LJ 7 (which relate to tax credits for foreign income tax); and
(d) sections LK 1 to LK 5, and LK 7 (which relate to tax credits related to attributed CFC income); and
(e) sections 32M, 49, 100, Part 9, and sections 165B and 185 of the Tax Administration Act 1994.
Application
(2) The NRWT rules apply to a person who makes a payment that consists of non-resident passive income.
Defined in this Act: non-resident passive income, NRWT rules, pay,
Compare: 2004 No 35 s OB 1 NRWT rules
RF 2 Non-resident passive income
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Certain interest and dividends
(1) Non-resident passive income means income derived from New Zealand by a non-resident consisting of—
(a) a dividend other than an investment society dividend:
(b) a royalty:
(c) an investment society dividend when the non-resident is not engaged in business in New Zealand through a fixed establishment in New Zealand:
(d) interest when the non-resident is not engaged in business in New Zealand through a fixed establishment in New Zealand.
Exclusions
(2) The following amounts derived by a non-resident are excluded from non-resident passive income:
(a) an amount of exempt income:
(b) an amount of income to which section CV 17 (Non-resident film renters) or CX 56 (Portfolio investor allocated income and distributions of income by portfolio investment entities) applies.
When subsection (4) applies
(3) Subsection (4) applies in an income year when a person derives non-resident passive income consisting of—
(a) a dividend other than an investment society dividend:
(b) a royalty for the use, production, or reproduction of, or for the right to use, produce, or reproduce, a literary, dramatic, musical, or artistic work in which copyright subsists:
(c) interest or a royalty derived by a life insurer from a company resident in New Zealand when the interest or royalty is treated as arising as a result of the life insurer’s election under section EY 49 (Non-resident life insurer becoming resident):
(d) interest or an investment society dividend when the person paying and the person deriving the interest or dividend are not associated persons.
Final withholding
(4) If the person is a filing taxpayer, the schedular income tax liability for the corresponding tax year under section BC 7 (Income tax liability of person with schedular income) for schedular income that is non-resident passive income is determined by the amount of tax required to be withheld under this Part.
Exception: minimum amount
(5) Despite subsection (4), if a person derives non-resident passive income consisting of interest or an investment society dividend other than those described in subsection (3)(b) and (d), the person’s income tax liability for the corresponding tax year is the greater of—
(a) the sum of the total non-resident withholding tax (NRWT) for which they are liable and the amount that would be their income tax liability for the tax year if they had not derived non-resident passive income in the tax year:
(b) the amount that would be their income tax liability in the absence of this subsection.
Company deriving minimum amount
(6) For the purposes of subsection (5) for a company, if the total amount of non-resident passive income and other income derived by the company in the corresponding tax year is not more than $1,000, the income tax liability of the company for the tax year is the sum referred to in subsection (5)(a).
Application of financial arrangements rules
(7) The financial arrangements rules do not apply to the calculation of an amount of non-resident passive income.
Interest payable by Commissioner
(8) For interest payable under Part 7 of the Tax Administration Act 1994, NRWT withheld by the Commissioner is treated as paid on the date it is withheld. Sections 50, 55, 100, and Part 9 of that Act do not apply to the Commissioner and that interest, but the other provisions of the NRWT rules do apply.
Defined in this Act: amount, amount of tax, associated person, business, Commissioner, company, derived from New Zealand, dividend, exempt income, filing taxpayer, financial arrangements rules, fixed establishment, income, income tax liability, interest, investment society dividend, life insurer, New Zealand, non-resident, non-resident passive income, NRWT, NRWT rules, pay, resident in New Zealand, royalty, schedular income, schedular income tax liability, tax year,
Compare: 2004 No 35 ss NG 1(2)–(4), NG 3, NG 4
Withholding obligations
RF 3 Obligation to withhold amounts of tax for non-resident passive income
-
A person who makes a payment of non-resident passive income must withhold the amount of tax for the payment and pay it to the Commissioner. The obligation to withhold arises under section RA 6(2) (Withholding and payment obligations for passive income) at the time of payment.
Defined in this Act: amount of tax, Commissioner, non-resident passive income, pay,
Compare: 2004 No 35 s NG 8(1)
RF 4 Non-resident passive income received by agents and others
-
When this section applies
(1) This section applies when—
(a) an agent or other person in New Zealand receives a payment of non-resident passive income on behalf of a person entitled to the payment; and
(b) some or all of the amount of tax for the payment has not been withheld.
Obligation to withhold: agent or other person
(2) The agent or other person must withhold the amount of tax referred to in subsection (1)(b) for the payment and pay it to the Commissioner. The obligation to withhold arises at the time of receipt.
Notifying agent or other person
(3) If, in the circumstances described in subsection (1)(a), the person paying the non-resident passive income has withheld the amount of tax for the payment, they must notify the agent or other person of the amount withheld. Notification must be made at the time the payment is made.
Defined in this Act: amount of tax, Commissioner, New Zealand, non-resident passive income, notify, pay,
Compare: 2004 No 35 s NG 8(2), (3)
RF 5 When amounts of tax already withheld
-
A person is not required to withhold NRWT when some or all of the payment consists of resident passive income to the extent to which the amount of tax has already been collected.
Defined in this Act: amount of tax, non-resident passive income, NRWT, pay, resident passive income,
Compare: 2004 No 35 s NF 2(6)
RF 6 When amounts of tax not withheld or partly withheld
-
Person as filing taxpayer
(1) When a person is required under section RA 6(2) (Withholding and payment obligations for passive income) to withhold NRWT and does not withhold the full amount required under this Part, the person deriving the non-resident passive income is treated for this purpose as a filing taxpayer.
Debt payable
(2) The amount of tax referred to in subsection (1) as not withheld is a debt payable by the person to the Commissioner, and is treated as having become due under section RA 10 (When obligations not met).
Non-cash dividends
(3) Subsection (2) applies in relation to a non-cash dividend described in section RF 10 as if the amount equal to the amount of tax for the dividend were the amount payable.
Commissioner’s powers to recover
(4) In recovering the amount, the Commissioner may take the steps the Commissioner thinks fit in relation to the person in default or liable to pay, whether or not they are the same person.
Defined in this Act: amount, amount of tax, Commissioner, filing taxpayer, non-cash dividend, non-resident passive income, NRWT, pay,
Compare: 2004 No 35 s NG 13
Calculating amounts of tax
RF 7 General rate for NRWT
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When this section applies
(1) This section applies to a payment of non-resident passive income other than a payment to which sections RF 8 to RF 12 apply.
Calculation of amount of tax
(2) The amount of tax is calculated using the formula—
payment × 0.15.
Defined in this Act: amount of tax, non-resident passive income, NRWT, pay,
Compare: 2004 No 35 s NG 2(1)(c)
RF 8 Certain dividends
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When this section applies
(1) This section applies when a person makes a payment of non-resident passive income that consists of a dividend, except to the extent to which the payment is—
(a) an investment society dividend; or
(b) a supplementary dividend under subpart LP (Tax credits for supplementary dividends); or
(c) a conduit tax relief (CTR) additional dividend under subpart LQ (Tax credits of conduit tax relief companies); or
(d) a fully imputed dividend; or
(e) an amount of a dividend that is fully credited for FDP; or
(f) an amount of a dividend that is fully credited for conduit tax relief.
Calculation of amount of tax
(2) The amount of tax is calculated using the formula—
dividend payment × 0.3.
Defined in this Act: amount of tax, CTR additional dividend, dividend, FDP, fully credited for conduit tax relief, investment society dividend, non-resident passive income, pay, supplementary dividend,
Compare: 2004 No 35 s NG 2(1)(a)
RF 9 When dividends fully imputed or fully credited
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When this section applies
(1) This section applies for the purposes of section RF 8(1)(d) to (f) to determine the extent to which a dividend is fully imputed or fully credited for FDP or conduit tax relief.
Fully imputed
(2) The extent to which a dividend is fully imputed is calculated using the formula—
Definition of items in formula
(3) In the formula in subsection (2),—
(a) imputation credit amount is the amount of an imputation credit attached to the dividend:
(b) supplementary dividend amount is the amount of a supplementary dividend payable under subpart LP (Tax credits for supplementary dividends) for the dividend:
(c) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2, (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for the tax year in which the dividend is paid.
Fully credited for FDP
(4) The extent to which a dividend is fully credited for FDP is calculated using the formula—
Definition of items in formula
(5) In the formula in subsection (4),—
(a) FDP credit amount is the amount of FDP credit attached to the dividend:
(b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2.
Fully credited for conduit tax relief
(6) The extent to which a dividend is fully credited for conduit tax relief is calculated using the formula—
Definition of item in formula
(7) In the formula in subsection (6), tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 for the income year in which the dividend is paid.
Defined in this Act: amount, dividend, FDP, FDP credit, fully credited for conduit tax relief, imputation credit, income tax, pay, supplementary dividend, tax year,
Compare: 2004 No 35 ss NG 2(3), (4), OB 1 fully conduit tax relief credited
RF 10 Non-cash dividends
-
When this section applies
(1) This section applies when a person makes a payment of non-resident passive income that consists of a non-cash dividend to the extent to which the amount is not fully imputed.
When amount not taxable bonus issue
(2) The amount of tax, when the payment is not a taxable bonus issue, is calculated using the formula—
Definition of items in formula
(3) In the formula in subsection (2),—
-
(a) rate A is—
(i) for a CTR additional dividend paid under subpart LQ (Tax credits of conduit tax relief companies) or a dividend to the extent to which the amount of the dividend is fully credited for conduit tax relief as described in subsection (7), the rate set out in section RF 7; and
(ii) in any other case, the rate of tax set out in section RF 8:
(b) dividend payment is the amount of the dividend paid to the extent to which the amount of the dividend is not fully imputed or fully credited for FDP, as described in section RF 9(2) and (4), disregarding the amount of tax to be withheld:
(c) rate B is the rate set out in section RF 7:
(d) amount paid is the amount of the dividend paid to the extent to which the amount of the dividend is fully credited for FDP, as described in section RF 9(4), disregarding the amount of tax to be withheld.
When amount taxable bonus issue
(4) The amount of tax, when the payment is a taxable bonus issue, is calculated using the formula—
(rate A × dividend payment) + (rate B × (amount paid + credit amount)).
Definition of items in formula
(5) In the formula in subsection (4),—
(a) rate A is the rate of tax set out in section RF 8:
-
(b) dividend payment is the amount of the dividend paid calculated under section CD 7(2) or CD 8(3) (which relate to bonus issues)—
(i) other than a dividend referred to in the item bonus issue:
(ii) to the extent to which the amount of the dividend is not fully imputed or fully credited for FDP (as described in sections RF 9 and RF 14), before the amount of tax is withheld:
(c) rate B is the rate of tax set out in section RF 7:
(d) amount paid is the amount of the dividend calculated under section CD 7(2) or CD 8(3) together with the amount of an FDP credit attached to the dividend to the extent to which the amount of the dividend is fully credited for FDP, as described in section RF 9(4), before the amount of tax is withheld:
(e) credit amount is the amount of the dividend to the extent to which it is fully credited for conduit tax relief as described in subsection (7) together with a CTR additional dividend paid for the taxable bonus issue under subpart LQ.
Amount treated as amount withheld and paid under NRWT rules
(6) A person who is liable under this section for NRWT must pay the amount to the Commissioner. The amount is treated as if it were an amount withheld and paid under the NRWT rules for the purposes of this Act and the Tax Administration Act 1994.
Amount part of dividend
(7) For the purposes of this section and sections OD 20 to OD 22 (which relate to CTR credits attached to dividends), an amount subtracted from a non-cash dividend to the extent it is fully credited for conduit tax relief is treated as part of the non-cash dividend.
Defined in this Act: amount, amount of tax, Commissioner, CTR additional dividend, dividend, FDP, FDP credit, fully credited for conduit tax relief, non-cash dividend, non-resident passive income, NRWT, NRWT rules, pay, tax, taxable bonus issue,
Compare: 2004 No 35 s NG 9
-
RF 11 Dividends paid to companies under control of non-residents
-
When this section applies
(1) This section applies when—
(a) a non-resident formerly held a share in a company (company A) resident in New Zealand; and
(b) while the non-resident held the share, company A was under the control of the non-resident, or was treated for the purposes of this Act as under the control of persons who include the non-resident; and
(c) the non-resident has disposed of the share to another company (company B) that is resident in New Zealand and under the control of the non-resident, or is treated for the purposes of this Act as under the control of persons who include the non-resident; and
(d) some or all of the price for which company B acquired the share remains after the acquisition unpaid or owing in any way to the non-resident, whether or not the amount is secured.
Dividend derived
(2) While an amount of the price remains unpaid or owing, a dividend paid to company B in relation to the share is treated as having been paid to the non-resident and as derived as a dividend by the non-resident at the time the dividend is paid.
Defined in this Act: amount, company, control, dividend, non-resident, pay, resident in New Zealand, share,
Compare: 2004 No 35 s NG 14
RF 12 Certain amounts of interest
-
When payment derived jointly with resident
(1) If a person makes a payment of non-resident passive income that consists of interest derived by 2 or more persons jointly and at least 1 person is a New Zealand resident, the amount of tax for the payment is calculated using the formula—
(tax rate × (interest paid + foreign withholding tax)) − foreign withholding tax.
Definition of items in formula
(2) In the formula,—
(a) tax rate is the basic rate set out in schedule 1, part D, clause 3 or 4 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits):
(b) interest paid is the amount of interest paid before the amount of tax is determined:
(c) foreign withholding tax is the amount of foreign withholding tax paid or payable on the amount of interest paid.
Exclusion: when payment by approved issuer
(3) The NRWT is zero if it consists of interest that—
(a) is paid by an approved issuer for a registered security; and
(b) is derived by a person not associated with the approved issuer; and
(c) is not a payment to which subsection (1) applies.
Exclusion: when payment by transitional resident
(4) The NRWT is zero if it consists of interest that—
(a) is paid by a transitional resident in relation to money borrowed by them while non-resident; and
(b) is not paid in relation to a business carried on through a fixed establishment in New Zealand; and
(c) is derived by a person not associated with the transitional resident; and
(d) is not a payment to which subsection (1) applies.
Treatment as filing taxpayer
(5) For the purposes of this section, the person referred to in subsection (1) who is a New Zealand resident, is treated as a filing taxpayer.
Interest paid under registered securities
(6) For the purposes of the NRWT rules, an amount of interest is paid by an approved issuer under a registered security only if it is treated as paid under section 86I of the Stamp and Cheque Duties Act 1971.
Defined in this Act: amount, amount of tax, approved issuer, associated person, business, filing taxpayer, fixed establishment, foreign withholding tax, interest, New Zealand, New Zealand resident, non-resident, non-resident passive income, NRWT, NRWT rules, pay, registered security, transitional resident,
Compare: 2004 No 35 s NG 2(1)(ab), (b)(ib), (c)
Paying amounts of tax
RF 13 Basis for payment of amounts of tax for non-resident passive income
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When this section applies
(1) This section applies when a person estimates for a tax year that they will not be required by the NRWT rules to withhold total NRWT of $500 or more.
Two instalments
(2) The person may pay to the Commissioner the amount withheld for the tax year in 2 instalments.
When threshold reached during tax year
(3) If the threshold amount of $500 is reached at a time in a tax year, the person must pay to the Commissioner—
(a) the amount of tax withheld from the start of the tax year to the end of the month in which the threshold is reached; and
(b) for the remainder of the tax year, the amount of tax on a monthly basis.
Defined in this Act: amount of tax, Commissioner, NRWT, NRWT rules, pay, tax withheld, tax year,
Compare: 2004 No 35 s NG 11(1)–(3)
RF 14 Treatment of FDP credits
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A person who is required under the NRWT rules to withhold NRWT for non-resident passive income consisting of a dividend is treated as having withheld the amount of tax to the extent of an amount of an FDP credit attached to the dividend.
Defined in this Act: amount of tax, dividend, FDP credit, non-resident passive income, NRWT, NRWT rules,
Compare: 2004 No 35 s NG 2(2)
RF 15 Commissioner’s power to vary amounts of tax
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Special circumstances
(1) For the purposes of meeting the special circumstances of a case or class of cases, the Commissioner may—
(a) relieve a person from an obligation to withhold NRWT under section RA 6(2) (Withholding and payment obligations for passive income), RF 3, RF 4, or RF 10; or
(b) vary the amount of tax that a person must withhold under section RA 6(2).
Exclusion for certain payments of interest
(2) This section does not apply to an amount of tax for a payment of interest derived jointly with a person resident in New Zealand as described in section RF 12(1).
NRWT rules apply as if amended
(3) On the exercise of a power under subsection (1), the NRWT rules apply in the particular case as if they were amended in the way in which the power is exercised.
Defined in this Act: amount of tax, Commissioner, interest, NRWT, NRWT rules, pay, resident in New Zealand,
Compare: 2004 No 35 s NG 10
Subpart RG—Payments for foreign dividends (FDP)
Introductory provisions
RG 1 FDP rules and their application
-
Meaning
(1) The FDP rules means—
(a) this subpart; and
(b) section GB 39 (FDP arrangements: general); and
(c) section GB 41 (FDPA arrangements for carrying amounts forward); and
(d) sections LF 1, LF 5, LF 8 to LF 10 (which relate to tax credits for FDP credits); and
(e) subpart LL (Underlying foreign tax credits (UFTC)); and
(f) subpart OC (Foreign dividend payment accounts (FDPA)); and
(g) sections OP 51 to OP 77 (which relate to consolidated groups and FDP accounts); and
(h) section YA 2(2)(d) to (f)(Meaning of income tax varied); and
(i) sections 30, 32N, 68, 71, 71B, 72, and 102 to 104, Part 7, and sections 139B, 140C, 140D(1) and (3), 181, and 185 of the Tax Administration Act 1994.
Application
(2) The FDP rules apply to a company that receives a foreign dividend.
Defined in this Act: company, FDP rules, foreign dividend,
Compare: 2004 No 35 s OB 1 dividend withholding payment rules
RG 2 Foreign dividends
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Dividends to which rules apply
(1) Foreign dividend means—
-
(a) a dividend paid by a foreign company that—
(i) is derived by a company resident in New Zealand; and
(ii) is exempt income of the resident company under section CW 9 or CW 11 (which relate to income from equity); and
(iii) is not exempt income of the resident company under any of sections CW 36 to CW 40 and CW 42 to CW 47 (which relate to income of particular entities or of a certain type):
-
(b) a dividend paid by a company resident in New Zealand if, and to the extent to which,—
(i) the company was not resident in New Zealand previously; and
(ii) the amount of the dividend is less than the amount available to the company for distribution as a dividend just before becoming resident in New Zealand; and
(iii) the dividend is exempt income under sections CW 9 to CW 11 when derived by a resident company.
Calculating amount of dividend
(2) For the purposes of subsection (1)(b)(ii), the amount is calculated after subtracting from the available amount the amount of any earlier dividend to which subsection (1)(b) applies paid by the company.
Avoidance arrangements
(3) Section GB 39 (FDP arrangements: general) may apply to treat a payment as a dividend subject to this section.
Defined in this Act: amount, company, dividend, exempt income, foreign company, foreign dividend, pay, resident in New Zealand,
Compare: 2004 No 35 s NH 1(2)
-
Obligation to make payments
RG 3 Obligation to pay FDP
-
A company resident in New Zealand that receives a foreign dividend in a quarter must pay to the Commissioner FDP for the foreign dividend by the date set out in section RA 15 (Payment dates for interim and other tax payments) after the end of the quarter. However, this section does not apply to a portfolio tax rate entity.
Defined in this Act: Commissioner, company, FDP, foreign dividend, pay, portfolio tax rate entity, quarter, resident in New Zealand,
Compare: 2004 No 35 ss NH 1(1), NH 3(1)
Calculation of payments
RG 4 Calculating amount of FDP
-
Calculation of amount to pay
(1) An amount of FDP is calculated using the formula—
((dividend amount + foreign tax + underlying credit) × tax rate) − foreign tax − underlying credit.
Definition of items in formula
(2) In the formula,—
(a) dividend amount is the amount of the foreign dividend after subtracting any foreign withholding tax paid in relation to the dividend:
(b) foreign tax is the amount of any foreign withholding tax paid in relation to the dividend, excluding foreign withholding tax paid in a country listed in schedule 27 (Countries and types of income with unrecognised tax):
-
(c) underlying credit is the amount of—
(i) an underlying foreign tax credit calculated in relation to the dividend under section LL 2 (Tax credits for underlying foreign tax) if it is a positive amount; or
(ii) an imputation credit attached to the dividend, if subparagraph (i) does not apply:
-
(d) tax rate is the basic rate of income tax set out in—
(i) schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits), if the company is not a Maori authority; or
(ii) schedule 1, part A, clause 7, if the company is a Maori authority.
Defined in this Act: amount, company, FDP, foreign dividend, foreign withholding tax, imputation credit, Maori authority, pay,
Compare: 2004 No 35 s NH 2(1)
Adjustments to payments
RG 5 Credit balance in branch equivalent tax account
-
When this section applies
(1) This section applies when a foreign dividend is paid to a company in relation to an income interest in a controlled foreign company (CFC), and at the time the dividend is paid, the company is—
(a) a branch equivalent tax account (BETA) company; or
(b) part of a group of companies in which another company is a BETA company.
Reducing payment
(2) Despite section RF 2(5) and (6) (Non-resident passive income), the FDP for the foreign dividend may be reduced by the amount of a credit balance in the branch equivalent tax account at the time the dividend is paid. The company makes the election to use the credit balance under section OE 13 (BETA reduction in FDP).
When dividend paid in relation to income interest in CFC
(3) For the purposes of this section, a foreign dividend is paid in relation to an income interest in a CFC if the company holds the income interest in the CFC at any time during—
(a) the period that starts at the beginning of the income year of the company in which the dividend is paid and ends with the date the dividend is paid; or
(b) the income year of the company before the income year in which the dividend is paid.
Defined in this Act: amount, BETA company, branch equivalent tax account, CFC, company, FDP, foreign dividend, group of companies, income interest, income year, pay,
Compare: 2004 No 35 s NH 2(2), (3)
RG 6 Using loss balances
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When this section applies
(1) This section applies when—
(a) a company is required to pay FDP for a foreign dividend that is paid to it; and
-
(b) the company, or another company in the same group of companies,—
(i) has a loss balance that may be used under sections IA 3 to IA 9 (which relate to the treatment of tax losses), as applicable, to reduce the net income of the company for the income year in which the foreign dividend is paid to it; or
(ii) has a reasonable expectation that, for the income year in which the foreign dividend is paid, it will have a loss balance that may be used under the sections referred to in subparagraph (i) to reduce the net income of the company for the next income year.
Maximum reduction
(2) The company may choose to use the loss balance, so far as it extends, to pay some or all of the FDP. The maximum reduction is calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) payment is the amount determined under section RF 2(5) and (6) (Non-resident passive income):
(b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for the tax year in which the dividend is paid.
Time for making election
(4) The company must make the election by the relevant due date after the end date set out in section RA 15(3)(c) (Payment dates for interim and other tax payments), or by a later date if the Commissioner allows.
No actual tax loss
(5) Subsections (6) and (7) apply if the company chooses under subsection (2) to use a tax loss to satisfy a liability to pay some or all of an amount of FDP, and—
(a) the company does not have a tax loss; or
(b) the company has an insufficient tax loss; or
(c) if 2 companies are part of the same group of companies for part of the relevant income year, the tax loss could be used in relation to the net income of the company deriving the dividend only through the application of sections IP 1, IP 4, IP 6, or IP 7 (which relate to part-year losses).
Commissioner’s power to overrule
(6) The Commissioner may overrule the election under subsection (2) to the extent to which it is appropriate having regard to—
(a) the amount of the actual tax loss of the company making the election; and
(b) the amount or proportion, or likely amount or proportion, of the tax loss of the company making the election that could be used under the sections referred to in subsection (5)(c).
Company’s liability
(7) The company that was initially required to pay the FDP is liable to pay an amount disallowed under subsection (6), and a penalty under section 139B of the Tax Administration Act 1994, as if the deficiency arose at the time of the initial liability.
Defined in this Act: amount, Commissioner, company, foreign dividend, FDP, group of companies, income tax, income year, loss balance, net income, pay, tax loss, tax year,
Compare: 2004 No 35 s NH 3(2)–(4)
RG 7 Reduction of payments for conduit tax relief
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Reduction
(1) A company that is a conduit tax relief (CTR) company at the time it is required to pay FDP to the Commissioner, may reduce the payment by an amount calculated using the formula—
percentage of non-resident shareholders × amount of FDP.
Definition of items in formula
(2) In the formula,—
(a) percentage of non-resident shareholders is the percentage of the company’s shareholders not resident in New Zealand as determined under subsections (3) to (9):
(b) amount of FDP is the amount of the FDP that would be paid to the Commissioner in the absence of this section, calculated after applying section 32M of the Tax Administration Act 1994.
Determining percentage of non-resident shareholders
(3) The percentage of the company’s non-resident shareholders referred to in subsection (2) is the lowest of the following percentages:
(a) the percentage of direct voting interests that non-residents hold in the company on the date on which the company pays a dividend to all shareholders under subsection (4)(a)(ii):
(b) if a direct market value circumstance exists, the percentage of direct market value interests that non-residents hold in the company on the date on which the company pays a dividend to all shareholders under subsection (4)(a)(ii):
(c) if the shares in the company are not all shares of the same class, the percentage of total dividends payable by the company that non-residents would derive if the company were liquidated at the relevant time.
Timing of determination of percentage of non-resident shareholders
(4) For the purposes of this section, the percentage of the company’s non-resident shareholders is calculated at the latest of the following dates:
-
(a) the last date before the foreign dividend was received on which the company—
(i) paid a dividend to all its shareholders; or
(ii) paid a dividend to all holders of shares of 1 of the classes if the company has more than 1 class of shares; or
(b) the last day of the income year that is 2 years before the income year in which the foreign dividend is received; or
(c) for a company that is incorporated after the income year that is before the income year in which the foreign dividend is received by the company, the last day of the quarter in which the dividend is received.
CTR group members
(5) If a CTR group member exists for a company (company A), this section applies as if the company referred to in subsection (4) were the company—
(a) in which 1 or more non-residents have a direct voting interest; and
(b) that has a 100% voting interest in company A, calculated as if section YC 4 (Look-through rule for corporate shareholders) did not apply to treat the company’s interests to be held by others.
When subsection (5) does not apply
(6) Subsection (5) does not apply if the date for measuring the percentage of non-resident shareholders is before the date of incorporation of company A.
Listed companies
(7) Despite subsection (4), a listed company may use—
(a) the date an entitlement to a dividend is determined instead of the date the dividend is paid:
(b) a date in the income year on which, for whatever commercial reason, it calculates the percentage of its non-resident shareholders.
Companies with more than 1 class of shares
(8) A company with more than 1 class of shares is treated in relation to each class of shares as having the same shareholders on the relevant date that it had on the last date on which a dividend is paid to all shareholders of the class.
Treasury stock and determination of residence
(9) For the purposes of this section,—
(a) treasury stock is disregarded:
(b) the rules for determining residence in sections YD 9 to YD 11 (which relate to CTR companies) apply.
Defined in this Act: amount, Commissioner, company, CTR company, CTR group member, direct market value circumstance, direct market value interest, direct voting interest, dividend, foreign dividend, FDP, liquidation, listed company, non-resident, pay, quarter, resident in New Zealand, share, shareholder, shares of the same class, tax year, voting interest,
Compare: 2004 No 35 s NH 7
Subpart RM—Refunds
Introductory provision
RM 1 What this subpart does
-
This subpart establishes and measures a person’s entitlement to a refund for an overpayment under this Part or another Part of this Act, how the amount of the refund may be used, and the limits placed on the amount and use of a refund for—
(a) an imputation credit account (ICA) company:
(b) a company receiving a foreign dividend:
(c) a Maori authority:
(d) a policyholder credit account (PCA) person:
(e) a qualifying company:
(f) certain unit trusts and group investment funds.
Defined in this Act: amount, company, foreign dividend, group investment fund, ICA company, Maori authority, pay, PCA person, qualifying company, unit trust,
Refunds for overpaid amounts
RM 2 Refunds for overpaid tax
-
Amount more than required
(1) The Commissioner must refund an amount of tax that a person has paid if—
(a) the amount is more than the tax required to be paid by the person under this Part; and
(b) the 4-year period for amendment of an assessment under section 108 of the Tax Administration Act 1994 has not ended.
Refunds arising from mistakes
(2) Section RM 6 overrides subsection (1).
Defined in this Act: amount of tax, assessment, Commissioner, pay, tax,
Compare: 2004 No 35 s MD 1(1)
RM 3 Refunds for overpaid FDP
-
If a company pays to the Commissioner FDP in relation to a foreign dividend paid to it, and the amount is more than the amount required to be paid under this Part, the Commissioner must refund the overpayment.
Defined in this Act: amount, Commissioner, company, foreign dividend, FDP, pay,
Compare: 2004 No 35 s NH 4(1)
RM 4 Overpayment on amended assessment
-
Assessment increasing tax
(1) The Commissioner must refund an amount of tax that a person has paid if—
(a) the person paid the amount as a result of an amendment to an assessment increasing the amount of tax payable by the person; and
(b) the amount is more than the amount required to be paid by the person under this Part; and
(c) the 4-year period under section 108 of the Tax Administration Act 1994 beginning at the end of the income year in which the assessment was amended has not ended.
Refunds arising from mistakes
(2) Section RM 6 overrides subsection (1).
Defined in this Act: amount, amount of tax, assessment, Commissioner, income year, pay,
Compare: 2004 No 35 s MD 1(2)
RM 5 Overpayment on income statements
-
When this section applies
(1) This section applies when an income statement has been provided to a person and the result is that an amount of tax must be refunded to the person. For the purposes of this section, the amount of tax must be more than $200.
Refund on confirmation of correctness
(2) The Commissioner may refund the amount of tax only after the person has confirmed that the income statement is correct.
Threshold amount
(3) The Governor-General may make an Order in Council increasing the amount set out in subsection (1).
Defined in this Act: amount of tax, Commissioner, income statement,
Compare: 2004 No 35 s MD 1(1A)
RM 6 Refunds after 4-year period ends
-
When this section applies
(1) This section applies when a person has overpaid either an amount of tax or FDP, and the 4-year period referred to in sections RM 2(1)(b) and RM 4(1)(c) has ended.
Refund
(2) The Commissioner may refund the amount or payment if the refund—
(a) arises as described in subsection (3); and
(b) is made in the way described in subsection (4).
Cause of refund
(3) The refund must arise from—
(a) a clear mistake by or simple oversight of the person; or
(b) the person’s entitlement to a tax credit under subparts MA to MF and MZ (which relate to tax credits for families).
When refund made
(4) The refund must be made—
(a) within a period of 4 years that starts at the end of the 4-year period referred to in sections RM 2(1)(b) and RM 4(1)(c); and
-
(b) on an application—
(i) made by the person or on their behalf:
(ii) received by the Commissioner within the further period of 4 years described in paragraph (a).
Defined in this Act: amount of tax, Commissioner, FDP, pay, tax credit,
Compare: 2004 No 35 ss MD 1(2B), NH 3(7)
RM 7 Refunds to PAYE intermediaries
-
When this section applies
(1) This section applies when a PAYE intermediary pays to the Commissioner an amount of tax for a PAYE income payment for an employer—
-
(a) relying on a payment made to the trust account of the intermediary—
(i) by the employer and later dishonoured; or
(ii) mistakenly by a person and later recovered from the intermediary:
(b) mistakenly from funds not provided by the employer for a purpose related to the PAYE income payment.
Refund to intermediary
(2) The Commissioner must refund the amount of tax to the intermediary.
Defined in this Act: amount of tax, Commissioner, employer, pay, PAYE intermediary, PAYE income payment,
Compare: 2004 No 35 s NBA 7
-
RM 8 Overpaid RWT or NRWT
-
When this section applies
(1) This section applies when a person is required to withhold and pay to the Commissioner an amount of resident withholding tax (RWT) or non-resident withholding tax (NRWT), and the amount is more than the amount required to be paid under this Part.
Refund to person deriving payment or person withholding amount
(2) The Commissioner must refund the amount of the overpayment to—
(a) the person who derives the payment from which the amount of tax was withheld; or
(b) the person who withheld the amount if they have paid the amount of the overpayment to the person deriving the payment and not subtracted the amount under section RA 12(5) and (6) (Adjustment to correct errors: certain excess amounts).
Defined in this Act: amount, amount of tax, Commissioner, NRWT, pay, RWT,
Compare: 2004 No 35 ss MD 1(4)(b), (c), NF 7(1), (2), (5), NG 16(1), (1A)
RM 9 Calculations for attributed and non-attributed fringe benefits
-
When this section applies
(1) This section applies when an employer chooses to pay fringe benefit tax (FBT) under sections RD 47 to RD 53 (which relate to attributed fringe benefits and non-attributed fringe benefits).
Result of calculations
(2) If the result of the calculations of FBT on attributed fringe benefits or non-attributed fringe benefits is negative, the Commissioner must refund to the employer an amount equal to the deficiency.
Defined in this Act: amount, Commissioner, employer, FBT, pay,
Compare: 2004 No 35 s ND 10(4)(a)
Use of refunds
RM 10 Using refund to satisfy tax liability
-
When this section applies
(1) This section applies when a person is entitled to a refund of an amount of tax under sections RM 2 and RM 4 to RM 6.
Request for particular application
(2) The person may ask under section 173T of the Tax Administration Act 1994 for the Commissioner to apply some or all of the amount on a particular date to satisfy a liability under the Inland Revenue Acts.
Commissioner applying refund
(3) If no request is made under subsection (2), the Commissioner may apply the amount of the refund to satisfy a liability that the person has under the Inland Revenue Acts.
Exclusion
(4) Despite subsection (3), the Commissioner must not apply the amount of a refund under section LA 7 (Remaining refundable credits: family scheme income) or RM 8 to satisfy a liability of the person.
Defined in this Act: amount, amount of tax, Commissioner, Inland Revenue Acts,
Compare: 2004 No 35 ss MD 1(3), (3A), MD 1(4)
RM 11 Using GST refund to pay instalment of provisional tax
-
When this section applies
(1) This section applies when a person who is liable to pay provisional tax has a goods and services tax (GST) refund in a taxable period as a result of the application of section 20(5) of the Goods and Services Tax Act 1985.
Using amount
(2) The person may choose to use the amount of the refund to pay some or all of an instalment of provisional tax that is payable on the same instalment date.
Reduction in amount
(3) If the Commissioner amends the assessment reducing the amount of the refund, the person’s payment of provisional tax arising from the GST refund is the reassessed amount.
Defined in this Act: amount, assessment, Commissioner, GST, instalment date, pay, provisional tax, taxable period,
Compare: 2004 No 35 s MB 11
RM 12 Reduction in provisional tax liability
-
When this section applies
(1) This section applies when the amount of provisional tax payable for a tax year is reduced by the person liable to pay the provisional tax, or by the Commissioner under section 119(2) of the Tax Administration Act 1994.
Reduction in amount of provisional tax payable
(2) If the person applies in writing for a refund of the amount of provisional tax already paid that is as a result of the reduction more than the amount that would have been payable in relation to earlier instalment dates for the tax year, the Commissioner must—
(a) apply the overpayment as the person asks under section 173T of the Tax Administration Act 1994 or, if no request is made, in a way that the Commissioner determines in payment of tax or another amount that is payable by them; and
(b) refund any balance of the overpayment.
Reduction in assessment
(3) If the person’s residual income tax for the relevant tax year is no more than $2,500, and they apply in writing for the refund of an amount of provisional tax that has been determined under section RC 9 (Provisional tax payable in instalments) and already paid, other than on a final instalment, the Commissioner must—
(a) apply the amount as the person asks under section 173T of the Tax Administration Act 1994 or, if no request is made, in a way the Commissioner determines in payment of tax or another amount that is payable by them; and
(b) refund any balance of the amount.
Treatment of amount refunded or credited
(4) When an overpayment or amount of provisional tax for a tax year has been applied or refunded under subsection (2) or (3)—
(a) a later instalment payable under section RC 10 or RC 11 (which relate to the methods used to calculate the amount of an instalment), as applicable, is calculated as if the total instalments previously payable were reduced by the amount of the overpayment or amount; and
(b) the overpayment or amount applied or refunded is, from the date of action taken by the Commissioner, treated as not being provisional tax paid for the tax year.
Defined in this Act: amount, Commissioner, instalment date, pay, provisional tax, residual income tax, tax, tax year,
Compare: 2004 No 35 s MB 36
Limits on refunds and transfers
ICA companies
RM 13 Limits on refunds for ICA companies
-
When this section applies
(1) This section applies when an ICA company is entitled to—
(a) a refund of income tax under sections RM 2 and RM 4 to RM 6; or
(b) transfer an amount under section RC 32 (Wholly-owned groups of companies).
Amount of refund or transfer limited
(2) The amount of the refund or transfer must be no more than the credit balance of the ICA company in the imputation credit account at the latest of the following dates:
(a) the last day of the tax year that has just ended:
(b) the last day of a period for which the company is required to file a return under section 70(1) of the Tax Administration Act 1994:
(c) the last day of a period for which the company filed an annual ICA return under section 70(3) of that Act.
Time for filing returns
(3) Subsection (2) does not apply if the ICA company has an extension of time to file its annual ICA return for a tax year. In that case, the total amount refunded or transferred must be no more than the credit balance of the ICA company in its imputation credit account on the last day of the tax year to which the ICA return relates.
Defined in this Act: amount, annual ICA return, ICA company, imputation credit account, income tax, tax year,
Compare: 2004 No 35 s MD 2(1), (1A)
RM 14 Limits on refunds when company stops being ICA company
-
When this section applies
(1) This section applies when a company stops being an ICA company and is entitled to have a refund or to make a transfer under section RM 13(1) for a tax year in which it was an ICA company.
Limit on amount of refund or transfer
(2) The total amount refunded or transferred must be no more than the final balance of the imputation credit account arising as a debit under section OB 56 (ICA final balance) just before the company stopped being an ICA company.
Defined in this Act: amount, company, ICA company, imputation credit account, tax year,
Compare: 2004 No 35 s MD 2(2)
RM 15 Changes in credit balances
-
Credit balance reduced
(1) A credit balance is treated as reduced by the amount of a refund or transfer as described in sections RM 13 and RM 14 that is made earlier in the same tax year.
Credit balance increased
(2) A credit balance is treated as increased by an amount equal to a debit to the company’s imputation credit account under section OB 41 (ICA debit for loss of shareholder continuity) arising after a credit is made to the company’s imputation credit account for an amount that has satisfied the company’s income tax liability for the tax year and before the date on which the credit balance is to be determined under sections RM 13 and RM 14.
Defined in this Act: amount, company, imputation credit account, income tax liability, tax year,
Compare: 2004 No 35 s MD 2(3), (4)
RM 16 Treatment of amounts not refunded
-
When this section applies
(1) This section applies when, through the application of sections RM 13 and RM 14, an overpayment of income tax by a company is not refunded to the company or transferred within a wholly-owned group of companies.
Satisfying liabilities or retained
(2) The amount prevented from being a refund or transfer—
(a) is applied to satisfy an income tax or provisional tax liability of the company for the tax year of the entitlement; and
(b) may be used by the company to satisfy an income tax or provisional tax liability for a tax year other than the tax year of entitlement; and
(c) is retained in the company’s tax account with the Commissioner to the extent to which paragraphs (a) and (b) do not apply, whether because the company is liquidated or for another reason.
Credit for provisional tax
(3) Despite subsection (2), the amount may be credited on a provisional tax instalment date if residual income tax is treated under section 120K of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.
Relationship with section RZ 6
(4) Section RZ 6 (Limits on refunds: transitional dates) overrides subsection (2)(c).
Defined in this Act: amount, Commissioner, company, income tax, income tax liability, instalment date, liquidation, pay, provisional tax, residual income tax, tax account with the Commissioner, tax year, wholly-owned group of companies,
Compare: 2004 No 35 s MD 2(5), (5A)
RM 17 Treatment of further income tax paid
-
When this section applies
(1) This section applies for the purposes of sections RM 2 and RM 4 to RM 6 when a company pays further income tax under sections OB 65 and OB 66 (which relate to further tax payable by ICA companies).
No refund
(2) The company is not entitled to a refund of the amount of further income tax paid which is treated as tax paid to satisfy an obligation yet to arise.
Defined in this Act: amount, company, further income tax, pay,
Compare: 2004 No 35 s MD 2(6)
Companies receiving foreign dividends
RM 18 Limits on refunds related to foreign dividends
-
Maximum refund
(1) Despite section RM 3, if the overpayment described in that section relates to an earlier tax year, the refund must be no more than the relevant credit balance as follows:
(a) for an FDPA company, the credit balance of the company’s FDP account at the end of the tax year that is before the tax year in which the entitlement to the refund arises:
(b) for an ICA company that is not an FDPA company, the credit balance of the company’s imputation credit account at the end of the tax year that is before that in which the entitlement to the refund arises:
-
(c) for a company described in paragraph (a) or (b) that ends its residence in New Zealand, the credit balance, just before the company stops being resident, of—
(i) the company’s imputation credit account arising as a debit under section OC 15 (FDPA overpayment of FDP); or
(ii) the company’s FDP account arising as a debit under section OC 26 (FDPA final balance).
Treatment of amount not refunded
(2) If the amount of a company’s overpayment is not refunded because it is more than the maximum allowed under subsection (1), the amount may still be used to reduce FDP for a foreign dividend paid to the company.
Reductions in credit balances
(3) For the purposes of this section, a credit balance referred to in subsection (1) is treated as reduced by an earlier refund under this section paid to the company in the tax year in which the entitlement to the refund arises. The refund of income tax under sections RM 13 to RM 17 in the same tax year must be no more than the relevant credit balance.
Defined in this Act: amount, company, FDP, FDP account, FDPA company, foreign dividend, ICA company, imputation credit account, income tax, pay, resident in New Zealand, tax year,
Compare: 2004 No 35 s NH 4(2), (3)
RM 19 Treatment of financial arrangements
-
When this section applies
(1) This section applies when a company is entitled to a refund of FDP under section CD 50(10) to (13) (Outstanding balances of financial arrangements).
Credit balance increased
(2) The amount of the company’s credit balance under section RM 18(1) is treated as increased by the amount of a debit in the company’s imputation credit account or FDP account arising under OB 41 or OC 24 (which relate to imputation debits and FDP debits for loss of shareholder continuity), as applicable, after the date on which the payment was made and before the date on which the credit balance is determined under section RM 18(1).
Defined in this Act: amount, company, FDP, FDP account, foreign dividend, imputation credit account, pay,
Compare: 2004 No 35 s NH 4(4)(a)
RM 20 Treatment of amounts not refunded
-
When this section applies
(1) This section applies when, through the application of section RM 18(1), an overpayment is not refunded.
Satisfying liabilities or retained
(2) The amount prevented from being a refund is—
(a) applied to satisfy an income tax or provisional tax liability of the company for the tax year of an entitlement to a refund or FDP for a foreign dividend that is payable after the date on which the entitlement to the refund arises; and
(b) retained by the Commissioner to the extent to which paragraph (a) does not apply, whether because the company is liquidated or for another reason.
Credit for provisional tax
(3) Despite subsection (2), the amount may be credited on a provisional tax instalment date if residual income tax is treated under section 120KE(5) to (7) of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.
Defined in this Act: amount, Commissioner, company, foreign dividend, FDP, income tax liability, instalment date, liquidation, pay, provisional tax, residual income tax, tax year,
Compare: 2004 No 35 s NH 4(4)(b)
RM 21 Refunds when loss balances used to reduce net income
-
When subsection (2) applies
(1) Subsection (2) applies when a company that is liable to pay FDP to the Commissioner has a loss balance that may be used under sections IA 2 to IA 9 (which relate to the treatment of tax losses) to reduce its net income for the income year in which the foreign dividend is paid.
Refund
(2) The company is entitled to a refund of an amount equal to the least of the following, as applicable:
(a) the amount of FDP that the company pays in the income year in which the foreign dividend is paid; or
(b) the amount of the loss balance multiplied by the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for the income year in which the foreign dividend is paid; or
(c) the credit balance of the company’s FDP account at the end of the tax year that has just ended.
Group company’s tax loss
(3) This section also applies, treating the group of companies as the company, when—
(a) a company (group company A) pays FDP to the Commissioner; and
(b) another company (group company B) that is part of the same group of companies as group company A, has a tax loss for the income year in which the foreign dividend is paid or an earlier income year that may be used under sections IA 2 to IA 9 to reduce the net income of group company A; and
(c) group company B makes the tax loss available so that group company A is able to get a refund of some or all of the payment.
Application and return requirements
(4) For this section to apply,—
(a) the company must apply to the Commissioner in writing; and
(b) the company must meet the return requirements of section 71B of the Tax Administration Act 1994 for the income year in which the dividend is paid; and
(c) if group company B’s tax loss is used, group company B must make an election to use the tax loss in writing.
Reduction in tax loss
(5) When a refund is paid under this section, the amount of tax loss is reduced by an amount calculated using the formula—
Definition of items in formula
(6) In the formula,—
(a) refund is the amount of the refund paid to group company A under this section:
(b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 for the income year that corresponds to the tax year referred to in subsection (2)(c).
Late payment penalties
(7) Group company A is entitled to a refund of a late payment penalty imposed under section 139B of the Tax Administration Act 1994 in relation to the failure to pay the amount that is refunded.
Defined in this Act: amount, Commissioner, company, corresponding income year, foreign dividend, FDP, FDP account, group of companies, income tax, income year, loss balance, net income, pay, tax loss, tax year,
Compare: 2004 No 35 s NH 4(5), (6)
Maori authorities
RM 22 Limits on refunds for Maori authorities
-
When this section applies
(1) This section applies when a Maori authority is entitled to a refund of income tax under sections RM 2 and RM 4 to RM 6.
Amount of refund limited
(2) The amount of the refund must be no more than the credit balance of the Maori authority in the Maori authority credit account at the latest of the following dates:
(a) the last day of the tax year that has just ended:
(b) the last day of a period for which the Maori authority is required to file a return under section 70B(1) of the Tax Administration Act 1994:
(c) the last day of a period for which the Maori authority files a Maori authority credit account return under section 70B(3) of that Act.
Time for filing returns
(3) Subsection (2) does not apply if the Maori authority has an extension of time to file its Maori authority credit account return for a tax year, and files the return with the extended time. In that case, the total amount refunded must be no more than the credit balance of the Maori authority in its Maori authority credit account on the last day of the tax year to which the return relates.
Satisfying liabilities or retained
(4) If the Maori authority has a refund of income tax, and an amount paid in excess is not refunded because of the application of subsection (2) or section RM 23, the amount prevented from being a refund or transfer—
(a) is used to satisfy an income tax or provisional tax liability of the Maori authority for the tax year of the entitlement; and
(b) may be used by the Maori authority to satisfy an income tax or provisional tax liability for a tax year other than the tax year of entitlement; and
(c) is retained in the authority’s tax account with the Commissioner to the extent to which paragraphs (a) and (b) do not apply.
Credit for provisional tax
(5) Despite subsection (4), the amount may be credited on a provisional tax instalment date if residual income tax is treated under section 120K of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.
Relationship with section RZ 6
(6) Section RZ 6 (Limits on refunds: transitional dates) overrides subsection (4)(b).
Defined in this Act: amount, income tax, income tax liability, instalment date, Maori authority, Maori authority credit account, Maori authority credit account return, provisional tax, residual income tax, tax account with the Commissioner, tax year,
Compare: 2004 No 35 s MD 2B(1), (1B)
RM 23 Limits on refunds when Maori authority stops being Maori authority
-
When this section applies
(1) This section applies when a Maori authority stops being a Maori authority and is entitled to a refund under sections RM 2 or RM 4 to RM 6 for a tax year in which it maintained a Maori authority credit account.
Limit on amount of refund
(2) The amount refunded must be no more than the final balance of the Maori authority credit account arising as a debit under section OK 18 (MACA final balance) just before the Maori authority stopped being a Maori authority.
Defined in this Act: amount, Maori authority, Maori authority credit account, tax year,
Compare: 2004 No 35 s MD 2B(2)
RM 24 Increase in credit balances
-
A credit balance is treated as increased by an amount equal to a debit to the Maori authority credit account under section OK 15 (MACA debit for loss of shareholder continuity) arising after the date of payment of instalment B set out in schedule 3, part A (Payment of provisional tax and terminal tax) for the authority’s income year that corresponds to the tax year and before the date on which the credit balance is to be determined under sections RM 22 and RM 23.
Defined in this Act: amount, corresponding income year, Maori authority credit account, pay, tax year,
Compare: 2004 No 35 s MD 2B(3)
RM 25 Treatment of amounts not refunded
-
When this section applies
(1) This section applies when, through the application of sections RM 22 and RM 23, an overpayment of income tax by a Maori authority is not refunded to the authority.
Satisfying liabilities or retained
(2) The amount prevented from being a refund is—
(a) applied to satisfy an income tax or provisional tax liability of the Maori authority for the tax year of the entitlement; and
(b) retained by the Commissioner to the extent to which paragraph (a) does not apply.
Credit for provisional tax
(3) Despite subsection (2), the amount may be credited on a provisional tax instalment date if residual income tax is treated under section 120K of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.
Defined in this Act: amount, Commissioner, income tax, income tax liability, instalment date, Maori authority, pay, provisional tax, residual income tax,
Compare: 2004 No 35 s MD 2B(4), (4B)
RM 26 Treatment of further income tax paid
-
When this section applies
(1) This section applies for the purposes of sections RM 2 and RM 4 to RM 6 when a Maori authority pays further income tax under section OK 21 or OK 22 (which relate to further income tax for closing debit balance or when Maori authority stops being a Maori authority).
No refund
(2) The authority is not entitled to a refund of the amount of further income tax paid which is treated as tax paid to satisfy an obligation yet to arise.
Defined in this Act: amount, further income tax, Maori authority, pay, tax,
Compare: 2004 No 35 s MD 2B(5)
RM 27 Application when no credits arise
-
Sections RM 22 to RM 26 do not apply in relation to an amount of tax paid for which no credit arises under section OK 2 (MACA payment of tax).
Defined in this Act: amount, amount of tax, pay,
Compare: 2004 No 35 s MD 2B(6)
Persons with policyholder credit accounts
RM 28 Limits on refunds for PCA persons
-
When this section applies
(1) This section applies when a PCA person is entitled to a refund of income tax under sections RM 2 and RM 4 to RM 6.
Amount of refund limited
(2) The amount of the refund must be no more than the credit balance of the PCA person in the policyholder credit account at the latest of the following dates:
(a) the last day of the tax year that has just ended:
(b) the last day of a period for which the person is required to file a return under section 66(4) of the Tax Administration Act 1994:
(c) the last day of a period for which the person files an annual PCA return under section 66(5) of that Act.
Defined in this Act: amount, annual PCA return, income tax, PCA person, policyholder credit account, tax year,
Compare: 2004 No 35 s MD 3(1)
RM 29 Limits on refunds when person no longer PCA person
-
When this section applies
(1) This section applies when a person stops being a PCA person and is entitled to a refund as described in section RM 28(1) for a tax year in which they were a PCA person.
Limit on amount of refund
(2) The amount refunded must be no more than the final balance of the policyholder credit account just before the person stopped being a PCA person.
Defined in this Act: amount, PCA person, PCA return, policyholder credit account, return, tax year,
Compare: 2004 No 35 s MD 3(2)
RM 30 Changes in credit balances
RM 31 Treatment of amounts not refunded
-
When this section applies
(1) This section applies when, through the application of sections RM 28 and RM 29, an overpayment of income tax by a PCA person is not refunded to the person.
Satisfying liabilities or retained
(2) The amount prevented from being a refund—
(a) is used to satisfy an income tax or provisional tax liability of the person for the tax year of the entitlement; and
(b) may be used by the person to satisfy an income tax or provisional tax liability for a tax year other than the tax year of entitlement; and
(c) retained in the person’s tax account with the Commissioner to the extent to which paragraphs (a) and (b) do not apply.
Credit for provisional tax
(3) Despite subsection (2), the amount may be credited on a provisional tax instalment date if residual income tax is treated under section 120K of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.
Relationship with section RZ 6
(4) Section RZ 6 (Limits on refunds: transitional dates) overrides subsection (2)(c).
Defined in this Act: amount, Commissioner, income tax, income tax liability, instalment date, pay, PCA person, provisional tax, residual income tax, tax account with the Commissioner, tax year,
Compare: 2004 No 35 s MD 3(4)
Qualifying companies
RM 32 Application of sections RM 13 to RM 17 to qualifying companies
-
Sections RM 13 to RM 17 do not apply to an overpayment of tax by a qualifying company that may be refunded to or allocated by the company unless—
-
(a) the overpayment was made as part of or under an arrangement—
(i) to obtain a tax advantage of a kind referred to in section GB 35 (Imputation arrangements to obtain tax advantage); or
(ii) to avoid a tax liability of a shareholder under this Act; and
(b) the arrangement, or a part of it, was based on the company’s ability to obtain a refund of tax that the company would have under those sections in the absence of this section.
Defined in this Act: arrangement, pay, qualifying company, shareholder, tax advantage,
Compare: 2004 No 35 s MD 2(7)
-
Certain unit trusts and group investment funds
RM 33 Limits on refunds for certain unit trusts and group investment funds
-
When this section applies
(1) This section applies when a public unit trust or group investment fund—
(a) is entitled to a refund under sections RM 2 or RM 4 to RM 6; and
(b) goes into liquidation or chooses to become a portfolio investment entity; and
-
(c) at the time of the liquidation or election, has—
(i) a credit balance in its available subscribed capital (ASC) account on liquidation; and
(ii) a zero balance in its imputation credit account.
Calculating amount of refund
(2) The refund must be no more than an amount calculated using the formula—
ASC credit balance × maximum imputation ratio.
Definition of items in formula
(3) In the formula,—
(a) ASC credit balance is the credit balance in the ASC account of the public unit trust or group investment fund, as applicable:
(b) maximum imputation ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios), read as if the words
“in which the dividend or distribution is paid”
in subsection (3) were“in which the liquidation occurs or the election is made”
.
Defined in this Act: amount, ASC account, group investment fund, imputation credit account, liquidation, maximum permitted ratio, portfolio investment entity, public unit trust,
Compare: 2004 No 35 s MD 2A
Subpart RP—Intermediaries
Introductory provision
RP 1 What this subpart does
-
This subpart establishes the obligations of PAYE intermediaries and tax pooling intermediaries in relation to the collection and payment of tax and the provision of information, and sets out the requirements for the operation of their respective accounts.
Defined in this Act: intermediary, pay, PAYE intermediary, tax,
Compare: 2004 No 35 s MBA 1
PAYE intermediaries
Obligations and treatment of PAYE intermediaries
RP 2 PAYE intermediaries
-
Transferring obligations
(1) An employer may arrange to transfer their pay-as-you-earn (PAYE) and employer’s superannuation contribution tax (ESCT) obligations to a person approved under section 15D or 15G of the Tax Administration Act 1994 as a PAYE intermediary or a listed PAYE intermediary.
Paying amounts of tax and filing returns
(2) A PAYE intermediary or listed PAYE intermediary must, on behalf of an employer who has transferred an obligation to them under subsection (1),—
(a) withhold and pay to the Commissioner the amount of tax for a payment under the PAYE rules and the ESCT rules; and
(b) file a return of income relating to the payment and the amount of tax for the payment.
When person no longer intermediary
(3) A person who stops being a PAYE intermediary or a listed PAYE intermediary for an employer has the rights and obligations under the PAYE rules and ESCT rules of a PAYE intermediary or listed PAYE intermediary, as applicable, in relation to funds that—
(a) the employer pays to the person as intermediary; and
(b) the person holds at the time they stop being an intermediary.
Defined in this Act: amount of tax, Commissioner, employer, ESCT, ESCT rules, listed PAYE intermediary, pay, PAYE, PAYE intermediary, PAYE rules, return of income,
Compare: 2004 No 35 ss NBA 1, NBA 8, NBB 7(3)
RP 3 Requirements for listed PAYE intermediaries
-
For a period in which a person remains a listed PAYE intermediary, they must—
(a) continue to qualify under section 15D of the Tax Administration Act 1994 as a PAYE intermediary; and
(b) meet all the obligations under this subpart of a PAYE intermediary; and
(c) continue to meet the requirements of section 15F of the Tax Administration Act 1994; and
(d) operate technology systems to enable them to return by electronic means a subsidy claim form that contains a correct calculation of the amount of a subsidy under section RP 5 and section 15M of the Tax Administration Act 1994.
Defined in this Act: amount, listed PAYE intermediary, PAYE intermediary, subsidy claim form,
Compare: 2004 No 35 s NBB 3
RP 4 Payment of subsidies to certain PAYE intermediaries
-
Requirements for payment of subsidy
(1) The Commissioner may pay a subsidy to a listed PAYE intermediary for a payroll service that they provide to an employer to whom section RD 22(3) or (4) (PAYE income payment forms for amounts of tax paid to Commissioner) applies if the listed PAYE intermediary—
(a) has a contract with the employer to provide the services; and
(b) has met their obligations under sections RP 13 to RP 16; and
(c) files a correct subsidy claim form under section 15M of the Tax Administration Act 1994.
Notification requirements
(2) If a subsidy under subsection (1) is paid to a listed PAYE intermediary, the Commissioner must notify the intermediary of the following matters within 14 days of the date of the payment:
(a) the amount of the subsidy paid in relation to each employer; and
(b) the period to which the subsidy relates; and
(c) other information that may be relevant to the payroll services provided as the Commissioner considers appropriate.
Calculating amount of subsidy
(3) The listed PAYE intermediary must calculate the amount of the subsidy in the manner provided by regulations made under this section.
Paying amount of subsidy
(4) The Commissioner must pay the amount of the subsidy within 30 days of receiving the last of—
(a) the employer monthly schedule to which the subsidy claim form relates:
(b) the payment of the amounts of tax for a PAYE income payment to which the subsidy claim form relates:
(c) the subsidy claim form.
Bank accounts
(5) The Commissioner must pay the subsidy to a bank account nominated by the listed PAYE intermediary for the purpose or, if an overpayment has been made to the listed PAYE intermediary, to the listed PAYE intermediary’s bank account.
Prescribing amount of subsidy
(6) The Governor-General may from time to time by Order in Council prescribe the amount of the subsidy to be paid for an employee of an employer who contracts the services of a listed PAYE intermediary under section 15J of the Tax Administration Act 1994.
Defined in this Act: amount, amount of tax, Commissioner, employee, employer, employer monthly schedule, listed PAYE intermediary, pay, PAYE income payment, subsidy claim form,
Compare: 2004 No 35 ss NBB 1, NBB 6
RP 5 Subsidy claims
-
When this section applies
(1) This section applies when a listed PAYE intermediary files a subsidy claim form under section 15M of the Tax Administration Act 1994 and the Commissioner amends the details to correct an error.
Overpaid or underpaid amounts
(2) If an overpayment or underpayment results from the amendment, the intermediary or Commissioner, as applicable, must pay the amount overpaid or underpaid within 30 days of the date of notice under section 15M(3) of that Act.
Using overpayment to pay subsidy
(3) Despite subsection (2), the Commissioner may choose to use the amount of an overpayment resulting from an amendment to pay a subsidy claim made after the end of the 14-day period referred to in section 15M(3) of that Act.
Defined in this Act: amount, Commissioner, listed PAYE intermediary, pay, subsidy claim form,
Compare: 2004 No 35 s NBB 5(4), (5)
RP 6 Operation of PAYE intermediaries’ trust accounts
-
Nature of account
(1) A PAYE intermediary’s trust account must be named as a trust account and established at a registered bank within the meaning of the Reserve Bank of New Zealand Act 1989.
Deposits
(2) The deposits to the account consist of—
(a) a payment of gross salary or wages paid by an employer:
(b) an amount of employer’s superannuation contribution paid by an employer:
(c) an amount of tax for a payment of salary or wages required under the PAYE rules and ESCT rules, or made under section RP 12:
(d) an amount of a refund made by the Commissioner under section RM 7 (Refunds to PAYE intermediaries):
(e) interest on the amount of the funds in the trust account.
Withdrawals
(3) The withdrawals from the account consist of—
(a) a payment of net salary or wages to an employee:
(b) an amount of employer’s superannuation contribution paid by an employer:
(c) an amount of tax for a payment of salary or wages withheld under section RP 12:
(d) a payment that an employer would be required to make but for the arrangement with the PAYE intermediary, in relation to an amount of tax for a payment of salary or wages to an employee or an employer’s superannuation contribution made on behalf of an employee:
(e) interest on the amount of the funds in the trust account.
Payments held on trust
(4) A payment relating to an employee that is credited to the trust account of a PAYE intermediary is held by the PAYE intermediary on trust for the benefit of the employee and the Commissioner according to their respective rights and obligations.
Interest
(5) Interest earned in the trust account of a PAYE intermediary by a payment that relates to an employee is held beneficially by the PAYE intermediary.
Defined in this Act: amount, amount of tax, Commissioner, employee, employer, employer’s superannuation contribution, ESCT rules, gross, interest, pay, PAYE intermediary, PAYE rules, salary or wages,
Compare: 2004 No 35 s NBA 6
Employers’ responsibilities
RP 7 General responsibilities of employers
-
When this section applies
(1) This section applies when an employer who meets the requirements of sections RP 8 to RP 11 arranges to transfer their PAYE obligations in relation to an employee and a pay period to a PAYE intermediary.
PAYE liabilities
(2) The employer is not liable under the PAYE rules in relation to the employee and the pay period. However, the employer remains liable for the payment to the employee of the salary or wages for the pay period.
ESCT liabilities
(3) If the PAYE intermediary assumes the employer’s obligations under the ESCT rules, the employer is not liable under the ESCT rules in relation to the employee and the pay period. However, the employer remains liable for the payment to the employee of the employer’s superannuation contribution on the employee’s behalf.
Defined in this Act: employee, employer, employer’s superannuation contribution, ESCT rules, pay period, PAYE, PAYE intermediary, PAYE rules, salary or wages,
Compare: 2004 No 35 s NBA 4(2), (3)
RP 8 Information required from employers
-
An employer must—
-
(a) keep a record of—
(i) the gross salary or wages of an employee for a pay period; and
(ii) the amounts of tax withheld by the employer for the pay period; and
(b) provide information a PAYE intermediary seeks in the time agreed by the employer and PAYE intermediary.
Defined in this Act: amount of tax, employee, employer, gross, pay period, PAYE intermediary, salary or wages, tax withheld,
Compare: 2004 No 35 s NBA 4(1B)
-
RP 9 Authorised transfers from accounts
-
When this section applies
(1) This section applies when an employer has authorised the PAYE intermediary to direct the transfer of an amount from the employer’s bank account to meet an obligation that the PAYE intermediary has on the employer’s behalf in relation to an employee and a pay period.
Sufficient funds
(2) The employer must ensure, at a time fixed by the PAYE intermediary, that the bank account has sufficient funds available for the transfer.
Defined in this Act: amount, employee, employer, pay period, PAYE intermediary,
Compare: 2004 No 35 s NBA 4(1)(a)
RP 10 When transfers from accounts not authorised
-
Employer to pay amount of tax to trust account
(1) If an employer has not authorised a PAYE intermediary to direct the transfer of funds as described in section RP 9, and the employer pays salary or wages directly to an employee for a pay period under RP 12, the employer must pay the amount of tax for the payment required under the PAYE rules and ESCT rules into the PAYE intermediary’s trust account.
Employer to pay salary or wages to trust account
(2) If the employer has not authorised the PAYE intermediary to direct the transfer of funds as described in section RP 9, and subsection (1) does not apply, the employer must pay the amount of the employee’s gross salary or wages for the pay period into the PAYE intermediary’s trust account. However, the employer may retain an amount lawfully owed to them by the employee before making the payment.
Defined in this Act: amount, amount of tax, employee, employer, ESCT rules, pay, pay period, PAYE intermediary, PAYE rules, salary or wages,
Compare: 2004 No 35 s NBA 4(1)(b)(i), (ii)
RP 11 Employer’s superannuation contributions
-
If a PAYE intermediary has assumed the obligations of an employer under the ESCT rules in relation to an employee and a pay period, the employer must pay the amount of the employer’s superannuation contribution made in the pay period on behalf of the employee into the PAYE intermediary’s trust account.
Defined in this Act: amount, employee, employer, employer’s superannuation contribution, ESCT rules, pay, pay period, PAYE intermediary,
Compare: 2004 No 35 s NBA 4(1)(b)(iii)
RP 12 When payments made directly to employees
-
Despite sections RP 9 and RP 10, an employer may pay an employee’s salary or wages directly to the employee in the following circumstances:
(a) the payment is made on a day in a pay period that is not the usual day for a payment of salary or wages for the pay period; and
-
(b) the payment is—
(i) an advance of the employee’s salary or wages:
(ii) salary or wages owed to the employee for an earlier pay period:
(iii) a payment on the termination of the employee’s employment; and
(c) the employer withholds for the salary or wages of the employee the amount of tax that would be required under the PAYE rules and the ESCT rules if the employer did not have an arrangement with a PAYE intermediary; and
(d) the employer pays the amount referred to in paragraph (c) in the way described in sections RP 9 to RP 11.
Defined in this Act: amount of tax, arrangement, employee, employer, employment, ESCT rules, pay, pay period, PAYE rules, salary or wages,
Compare: 2004 No 35 s NBA 4(4)
PAYE intermediaries’ responsibilities
RP 13 General responsibilities of PAYE intermediaries
-
When this section applies
(1) This section applies when a PAYE intermediary assumes the PAYE and ESCT obligations in relation to an employee and a pay period that an employer would have under those rules in the absence of section RP 2(1).
No liability as employer
(2) The PAYE intermediary does not become liable as an employer for the payment to the employee of the salary or wages for the pay period, or for the payment of an employer’s superannuation contribution made on behalf of the employee.
Defined in this Act: employee, employer, employer’s superannuation contribution, ESCT, pay, pay period, PAYE, PAYE intermediary, salary or wages,
Compare: 2004 No 35 s NBA 5(1), (2)
RP 14 Collection, payment, and information requirements
-
A PAYE intermediary must—
(a) calculate and withhold the amount of tax for a payment of salary or wages, and pay the amount to the Commissioner by electronic means and in the format required; and
(b) provide an employer monthly schedule to the Commissioner by electronic means and in the format required; and
(c) provide a PAYE income payment form to the Commissioner if required; and
(d) keep the records referred to in section 24 of the Tax Administration Act 1994.
Defined in this Act: amount of tax, Commissioner, employer monthly schedule, pay, PAYE income payment form, PAYE intermediary, salary or wages,
Compare: 2004 No 35 s NBA 5(1)
RP 15 When employers have authorised transfers from accounts
-
If a PAYE intermediary has been given an authorisation by an employer under section RP 2(1), the intermediary must direct that, at or before the time of the transfer of the payment of salary or wages, an amount equal to the amount of tax for the payment required under the PAYE rules and ESCT rules is transferred to—
(a) the Commissioner; or
(b) the trust account established by the PAYE intermediary and identified in the employer’s notice under section 15J of the Tax Administration Act 1994.
Defined in this Act: amount, amount of tax, Commissioner, employer, ESCT rules, notice, pay, PAYE intermediary, PAYE rules, salary or wages,
Compare: 2004 No 35 s NBA 5(1B)
RP 16 Obligations for employer’s superannuation contributions
-
When section RP 11 applies, the PAYE intermediary assumes the obligations under the ESCT rules in relation to the employee and the pay period that the employer would have in the absence of RP 2(1).
Defined in this Act: employee, employer, ESCT rules, pay period, PAYE intermediary,
Compare: 2004 No 35 s NBA 5
Tax pooling intermediaries
RP 17 Tax pooling intermediaries
-
A person (person A) may ask a person who maintains a tax pooling account to act as a tax pooling intermediary between person A and the Commissioner in using funds in the tax pooling account to meet an obligation of person A to pay provisional tax.
Defined in this Act: Commissioner, intermediary, provisional tax, tax pooling account,
Compare: 2004 No 35 s MBA 2
RP 18 Deposits in tax pooling accounts
-
When this section applies
(1) This section applies when a tax pooling intermediary makes a deposit in a tax pooling account on behalf of a person.
Deposit held in trust
(2) The intermediary holds the principal amount of the person’s deposit in trust for the person until the amount is—
(a) credited to the person’s tax account with the Commissioner:
(b) credited to another person’s tax account with the Commissioner:
(c) refunded to the person.
Notification required
(3) The intermediary must—
(a) notify the person, at or before the time the person pays an amount to the intermediary, that the payment does not satisfy an obligation of the person to make a payment to the Commissioner; and
-
(b) notify the Commissioner by electronic means, providing for each person who has contributed an amount as a deposit,—
(i) the person’s name and tax file number; and
(ii) the amount of the person’s contribution.
Commissioner’s notification
(4) On receiving the deposit and details described in subsection (3), the Commissioner must notify the intermediary of—
(a) the account in which the deposit is paid; and
(b) the names of all persons who are connected with the deposit; and
(c) the amount of each person’s deposit.
Refunding deposit
(5) If the details described in subsection (3) are not provided within 5 working days after a deposit is made, the Commissioner must refund the deposit.
Defined in this Act: amount, Commissioner, intermediary, notify, pay, tax account with the Commissioner, tax file number, tax pooling account, working day,
Compare: 2004 No 35 ss MBA 3, MBA 4(3), MBA 5(1)–(4)
RP 19 Transfers from tax pooling accounts
-
Transferring amounts
(1) A tax pooling intermediary may ask the Commissioner to transfer an amount in their tax pooling account to the tax account of a person who is their client. The amount transferred and credited to the person’s account is treated as income tax paid to meet a provisional tax obligation under the provisional tax rules.
Credited on date of deposit or later
(2) The intermediary may ask the Commissioner that the amount of a transfer under subsection (1) is credited in the person’s tax account on the date on which the amount was deposited in the tax pooling account or on some later date.
Credit date
(3) The credit date for an amount transferred to a person’s tax account is—
-
(a) the date sought under subsection (2), unless—
(i) that date falls in a tax year for which the person’s terminal tax date is more than 60 days before the date on which the Commissioner receives the request; and
(ii) when the Commissioner receives the request, the person is liable for a penalty relating to their provisional tax obligations for the tax year; or
(b) if paragraph (a) does not apply, the date on which the Commissioner receives the request for the transfer.
Details
(4) For the purposes of this section, the intermediary must provide the following details to the Commissioner by electronic means:
(a) the date of the transfer and the credit date, if it is different; and
(b) the amount of the transfer; and
(c) the tax file number of the person for whom the amount is transferred.
Statement
(5) When an amount is transferred, the Commissioner must provide a statement showing the effect of the transfer to both the intermediary and the person for whom the transfer is made.
Defined in this Act: amount, Commissioner, income tax, intermediary, pay, provisional tax, provisional tax rules, tax file number, tax pooling account, tax year, terminal tax,
Compare: 2004 No 35 s MBA 6(1)–(3)
-
RP 20 Refusals to transfer amounts
-
When this section applies
(1) This section applies when a tax pooling intermediary asks to transfer an amount under section RP 19.
Tax avoidance
(2) The Commissioner may refuse to accept the request, or may reverse the transfer, if the request is made for the purpose or effect of tax avoidance.
Failure to provide details
(3) The Commissioner must refuse the transfer if—
(a) it relates to a deposit for which the details have not been provided under section RP 18(3) and the period of 5-working days has not expired:
(b) the details required under section RP 19(4) have not been provided.
Defined in this Act: amount, Commissioner, intermediary, tax avoidance, working day,
Compare: 2004 No 35 s MBA 6(4)–(9)
RP 21 Refunds from tax pooling accounts
-
A tax pooling intermediary may ask the Commissioner to refund some or all of the balance in their tax pooling account.
Defined in this Act: Commissioner, intermediary, tax pooling account,
Compare: 2004 No 35 s MBA 7
Subpart RZ—Terminating provisions
Provisional tax
RZ 1 Certain elections to become person with provisional tax liability
-
When this section applies
(1) This section applies when a person has a non-standard income year and has, between 10 October 2000 and the date on which the Taxation (Relief, Refunds, and Miscellaneous Provisions) Act 2002 received Royal asset, filed a return of income for the 1998–99 income year or a later income year on the basis that section MB 3(a) of the Income Tax Act 2004 (section MB 2A(1)(a)(i) before the enactment of that Act) applied.
Choosing to have provisional tax liability
(2) The person may choose to be a person with a provisional tax liability for the income year for which the return was filed if they have paid provisional tax of more than $2,500 on or before the date of instalment F for the income year corresponding to the tax year for which the return was filed.
Defined in this Act: corresponding income year, income year, non-standard income year, provisional tax, return of income, tax year,
Compare: 2004 No 35 s MZ 8
RZ 2 Amount of provisional tax based on 1997–98 or earlier tax year
-
For the purposes of sections MB 4 and MB 5 other than section MB 5(3) and (4) of the Income Tax Act 2004 (which relate to the methods for calculating provisional tax), and for a person who is a New Zealand superannuitant for the 1997–98 tax year, the person’s residual income tax for the tax year or for an earlier tax year is the amount that would have been their residual income tax if they—
(a) had not been liable to pay the New Zealand superannuitant surcharge; and
(b) had not paid any New Zealand superannuitant surcharge by way of surcharge deduction.
Defined in this Act: amount, New Zealand superannuitant, residual income tax, tax year,
Compare: 2004 No 35 s MZ 9
RZ 3 Standard method: 2008–09 and 2009–10 income years
-
When this section applies
(1) This section applies to the calculation of a portfolio tax rate entity’s provisional tax liability for the 2008–09 and 2009–10 income years when—
(a) the entity uses a 30% basic tax rate; and
(b) section RC 5 (Methods for calculating provisional tax liability) applies.
Standard method modified: for 5% uplift
(2) In the application of the standard method under section RC 5(2), the amount of provisional tax payable for the 2008–09 income year is equal to 95% of the residual income tax for the preceding tax year.
Standard method modified: for 10% uplift
(3) In the application of the standard method under section RC 5(3), the amount of provisional tax payable for the 2008–09 income year and the 2009–10 income year is equal to 100% of the residual income tax for the preceding tax year.
Defined in this Act: amount, basic tax rate, income year, pay, portfolio tax rate entity, provisional tax, residual income tax,
Compare: 2004 No 35 ss MZ 10, OB 1 new tax rate person
RZ 4 GST ratio method: 2008–09 and 2009–10 income years
-
When this section applies
(1) This section applies to the calculation of a portfolio tax rate entity’s provisional tax liability for the 2008–09 and 2009–10 income years when—
(a) the entity uses a 30% basic tax rate:
(b) section RC 8 (GST ratio method) applies and requires an amount of residual income tax or an assessment of income tax for the calculation of the GST ratio:
(c) the amount referred to in paragraph (b) is the amount for the 2007–08 income year.
GST ratio method modified
(2) In the application of the GST ratio method under section RC 8, the amount of residual income tax or the amount of an assessment of income tax are reduced by multiplying the amounts by 0.9.
Defined in this Act: amount, assessment, basic tax rate, GST ratio, income tax, income year, portfolio tax rate entity, provisional tax, residual income tax,
Compare: 2004 No 35 ss MZ 11, OB 1 new tax rate person
RZ 5 Calculating amounts under standard method: 2008–09 and 2009–10 income years
-
When this section applies
(1) This section applies to the calculation of a portfolio tax rate entity’s provisional tax liability for the 2008–09 and 2009–10 income years when—
(a) the entity uses a 30% basic tax rate; and
(b) section RC 10 (Calculating amount of instalment under standard and estimation methods) applies.
Calculation modified: 2008–09 income year
(2) In the calculation of the amount of an instalment under section RC 10(2) for the 2008–09 income year, the item residual income tax in the formula is—
(a) for the preceding tax year, the amount of residual income tax reduced by 5%; or
(b) for the tax year before the preceding tax year, the amount of residual income tax without any uplift.
Calculation modified: 2009–10 income year
(3) In the calculation of the amount of an instalment under section RC 10(2) for the 2009–10 income year, the item residual income tax in the formula is the amount of residual income tax for the tax year before the preceding tax year without any uplift.
Defined in this Act: amount, basic tax rate, income year, portfolio tax rate entity, provisional tax, residual income tax, tax year,
Compare: 2004 No 35 ss MZ 12, OB 1 new tax rate person
Refunds
RZ 6 Limits on refunds: transitional dates
-
ICA companies
(1) If an imputation credit account (ICA) company has a refund of income tax, and an amount paid in excess is dealt with under section RM 16(2)(c) (Treatment of amounts not refunded), the amount may be used only for a tax year commencing after the 1988–89 tax year, whether that is before or after the year of that entitlement.
Maori authorities
(2) If a Maori authority has a refund of income tax, and an amount paid in excess is dealt with under section RM 22(4)(b) (Limits on refunds for Maori authorities), the amount may be used only for a tax year commencing after the 2004–05 tax year, whether that is before or after the year of that entitlement.
PCA persons
(3) If a policyholder credit account (PCA) person has a refund of income tax, and an amount paid in excess is dealt with under section RM 31(2)(c) (Treatment of amounts not refunded), the amount may be used only for a tax year commencing after the 1990–91 tax year, whether that is before or after the year of that entitlement.
Defined in this Act: amount, ICA company, income tax, Maori authority, PCA person, tax year,
Compare: 2004 No 35 ss MD 2(5)(a)(ii), MD 3(4)(a)
Withdrawal income
RZ 7 Withdrawal income
-
When this section applies
(1) This section applies when a special home ownership account is closed in a tax year, and an amount is withdrawn on the closure other than an amount withdrawn under a withdrawal certificate.
Excluded income
(2) The amount withdrawn is treated as withdrawal income derived in the tax year by the person who operated the account and is excluded income of the person.
Amounts withdrawn under withdrawal certificates
(3) If an amount is withdrawn from a special home ownership account under a withdrawal certificate and the requirements relating to that account have not been met, the amount is treated as withdrawal income derived by the person who operated the account in the tax year in which the Commissioner is notified that the requirements were not met.
Maximum amount
(4) For the purposes of subsections (2) and (3), the amount of withdrawal income must be no more than $10,250 less the total amount withdrawn from the account under a withdrawal certificate.
Defined in this Act: amount, Commissioner, excluded income, notify, special home ownership account, tax year, withdrawal certificate, withdrawal income,
Compare: 2004 No 35 s IZ 3
RZ 8 Payment and rate of withdrawal tax
-
When this section applies
(1) This section applies when a person withdraws an amount from a special home ownership account that they have with an authorised savings institution and derives withdrawal income under section RZ 7(2).
Withholding withdrawal tax
(2) The authorised savings institution must withhold the amount of withdrawal tax from the amount payable to the person.
Rate of withdrawal tax
(3) The rate of withdrawal tax on withdrawal income is 45% of the gross amount of the income.
Paying withdrawal tax
(4) The authorised savings institution must pay the amount of tax to the Commissioner no later than the 20th day of the month following the month in which it becomes liable to withhold the amount.
Institution’s payment but failure to withhold
(5) If an authorised savings institution fails to withhold and pay the amount of withdrawal tax under subsection (2), and has paid an amount to the Commissioner under subsection (3), it may recover the amount from the person.
Person paying withdrawal tax
(6) A person who derives withdrawal income under section RZ 7(3) must pay to the Commissioner within the time allowed the amount of withdrawal tax payable for the income.
Defined in this Act: amount, amount of tax, authorised savings institution, Commissioner, gross, pay, special home ownership account, withdrawal income, withdrawal tax,
Compare: 2004 No 35 ss IZ 1, IZ 2, IZ 4
RZ 9 Relief in certain cases
-
If the Commissioner is satisfied that an amount of withdrawal tax is more than the total tax credit allowed in relation to a person’s account under section LZ 9(2) (Savings in special home ownership accounts), the Commissioner must reduce the amount of the withdrawal tax as is fair and reasonable in the circumstances.
Defined in this Act: amount, Commissioner, tax credit, withdrawal tax,
Compare: 2004 No 35 s IZ 6
RZ 10 Recovery of amounts payable to Commissioner
-
An amount payable to the Commissioner under section RZ 8(3) or (5) is recoverable as if it were income tax imposed under section BB 1 (Imposition of income tax).
Defined in this Act: amount, Commissioner, income tax, pay,
Compare: 2004 No 35 s IZ 5
Legislative history | |
|---|---|
| 15 November 2006 | Introduction (Bill 92-1) |
| 23 November 2006 | First reading and referral to Finance and Expenditure Committee |
| 16 July 2007 | Reported from Finance and Expenditure Committee (Bill 91-2) |
| 16 August 2007 | Second reading |
| 21 August 2007 | Committee of the whole House |
| 25 October 2007 | Third reading |
| 1 November 2007 | Royal assent |
This Act is administered by the Inland Revenue Department.
Versions
Income Tax Act 2007
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