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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 Y
Definitions and related matters
Subpart YA—General definitions
YA 1 Definitions
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In this Act, unless the context requires otherwise,—
1973 version provisions is defined in section YB 20 (Some definitions) for the purposes of sections YB 1 to YB 19 (which relate to associated persons)
1988 version provisions is defined in section YB 20 (Some definitions) for the purposes of sections YB 1 to YB 19 (which relate to associated persons)
1990 version provisions is defined in section YB 20 (Some definitions) for the purposes of sections YB 1 to YB 19 (which relate to associated persons)
absentee—
(a) means a person other than a person who is resident in New Zealand during any part of the tax year:
(b) is defined in section HD 18 (Agency in relation to absentees generally) for the purposes of subpart HD (Agents)
absolute value means the value irrespective of whether the value’s sign is positive or negative
ACC means the Accident Compensation Corporation continued by section 259 of the Injury Prevention, Rehabilitation, and Compensation Act 2001
ACC levy or premium is defined in section EF 3(5) (Accident compensation levies and premiums) for the purposes of that section
acceptable property is defined in section GB 45(3) (Arrangements involving money not at risk) for the purposes of that section
accident compensation earnings-related payment means a payment included in salary or wages of the following kinds and under the following Acts
(a) under the Accident Compensation Act 1982, a payment of earnings related compensation, as defined in section 2, and of compensation under section 80(4), that are not payments of account made under section 88 in circumstances in which, at the time the payments are made, the nature of the compensation has not been determined:
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(b) under the Accident Rehabilitation and Compensation Insurance Act 1992,—
(i) a vocational rehabilitation allowance payable under section 25; and
(ii) a payment of compensation for loss of earnings payable under any of sections 38, 39, and 43; and
(iii) a payment of compensation for loss of potential earning capacity payable under section 45 or 46; and
(iv) a payment of weekly compensation payable under any of sections 58, 59, and 60; and
(v) a payment of continued compensation payable under section 138:
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(c) under the Accident Insurance Act 1998,—
(i) a payment or weekly compensation made by an insurer, as defined in that Act:
(ii) a payment of compensation for loss of earnings, or loss of potential earning capacity in relation to a work-related personal injury, as defined in that Act, made by an insurer under a policy of personal accident or sickness insurance to which section 188(1)(a) (as it read immediately before its repeal by section 7 of the Accident Insurance Amendment Act 2000) applies:
(d) under the Injury Prevention, Rehabilitation, and Compensation Act 2001, a payment of weekly compensation made by the Corporation, as defined in that Act
accident compensation payment is defined in section CF 1(2) (Benefits, pensions, compensation, and government grants) for the purposes of that section
accident compensation payment for attendant care is defined in section LB 6(3) (Tax credits for caregivers) for the purposes of that section
accident insurance contract is defined in section CW 34(2) (Compensation payments) for the purposes of that section
account advantage—
(a) is defined in section GB 36(5) (Reconstruction of imputation arrangements to obtain tax advantage) for the purposes of that section:
(b) is defined in section GB 43(5) (Reconstruction of Maori authority credit arrangements to obtain tax advantage) for the purposes of that section
accounting period, for a foreign company, means—
(a) its accounting year; or
(b) the relevant period of other than 12 months, if a person’s attributed CFC income or loss or FIF income or loss from the foreign company is allowed or required to be calculated on the basis of a period other than 12 months because of a change of residence of the foreign company
accounting profits method means the method of calculating FIF income or FIF loss in section EX 49 (Accounting profits method)
accounting year,—
(a) for any person, means a tax year or another 12 month period that ends with the date of the annual balance of the person’s accounts:
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(b) for a company, includes—
(i) a period, shorter than 12 months, that is the period for which accounts are prepared, including under the international tax rules, because of the formation of the company or the termination of the company’s existence; and
(ii) a period, shorter or longer than 12 months, that is the period for which accounts are prepared, including under the international tax rules, because of the company or a person under section EX 25 (Change of CFC’s balance date) or EX 69 (Change of FIF’s balance date) adopting a new accounting balance date
accrual accounting method is defined in section EG 2(4) (Adjustment for changes to accounting practice) for the purposes of that section
accrued entitlement, for a party to a financial arrangement at any time, means the party’s rights under the arrangement at the time
accrued obligation, for a party to a financial arrangement at any time, means the party’s obligations under the arrangement at the time
acquire, for depreciable property, includes—
(a) make:
(b) be granted, for a patent or plant variety rights:
(c) lodge, for a patent application or a plant variety rights application
acquisition is defined in section GC 14 (Definitions for sections GC 6 to GC 13) for the purposes of sections GC 6 to GC 13 (which relate to transfer pricing arrangements)
acquisition price is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
active service area is defined in section CW 24(2) (Deferred military pay for active service) for the purposes of that section
actuarial reserves is defined in section EY 3 (Meaning of actuarial reserves)
actuary means a person who is—
(a) a Fellow of the New Zealand Society of Actuaries; or
(b) a Fellow of the Institute of Actuaries of Australia; or
(c) a Fellow of the Institute of Actuaries (of London); or
(d) the holder of an equivalent professional qualification approved by the Commissioner for the purposes of this definition
additional transport costs is defined in section CW 18(3) (Allowance for additional transport costs) for the purposes of that section
adjusted tax value—
(a) is defined in sections EE 55 to EE 60 (which relate to depreciation):
(b) for software acquired before 1 April 1993, is defined in section EZ 20 (Adjusted tax value for software acquired before 1 April 1993):
(c) is defined in paragraphs (a) and (b) and sections EE 21 to EE 24 (which relate to depreciation) for the purposes of section FO 16 (Amortising property)
adverse event deposit is defined in section EH 62 (Other definitions)
adverse event income equalisation account is defined in section EH 62 (Other definitions)
adverse event income equalisation scheme means the scheme referred to in section EH 1(2)(b) (Income equalisation schemes)
adverse event maximum deposit is defined in section EH 61 (Meaning of adverse event maximum deposit)
affected associate is defined in section GB 48(1) (Defined terms for sections GB 45 and GB 46) for the purposes of sections GB 45 and GB 46 (which relate to arrangements involving money not at risk)
after-income tax earnings means the after-tax net accounting profits of a company for an accounting year, including extraordinary items and having regard to accounting provisions for tax but not statutory liabilities for tax, and dealt with in 1 of the following paragraphs
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(a) after-tax net accounting profits calculated under generally accepted accounting practice and detailed in financial statements, audited by a chartered accountant (or an accountant of an equivalent professional standard in the country or territory in which the company is resident),—
(i) on which the accountant has given a standard audit opinion, without qualifications; or
(ii) on which the accountant has given a standard audit opinion containing qualifications, but only relating to accounting treatments that, in the opinion of the Commissioner, do not materially affect the calculation of amounts of underlying foreign tax credit; or
(iii) adjusted, in a manner satisfactory to the Commissioner, to eliminate any material effects of accounting treatments about which the accountant has qualified a standard audit opinion; or
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(b) if there are no financial statements as described in paragraph (a), after-tax net accounting profits calculated under the generally accepted accounting practice (or an equivalent standard for the reporting of net profits in a consistent and non-distorting manner) of the country or territory in which the company is resident and detailed in financial statements, audited by a chartered accountant (or an accountant of an equivalent professional standard in the country or territory in which the company is resident),—
(i) on which the accountant has given a standard audit opinion, without qualifications, to the effect that the financial statements represent the income and financial position of the company to the degree of validity normally required in the country or territory in which the company is resident; or
(ii) on which the accountant has given a standard audit opinion containing qualifications, but only relating to accounting treatments that, in the opinion of the Commissioner, do not materially affect the calculation of amounts of underlying foreign tax credit; or
(iii) adjusted, in a manner satisfactory to the Commissioner, to eliminate any material effects of accounting treatments about which the accountant has qualified a standard audit opinion; or
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(c) if there are no financial statements as described in paragraph (a) and if paragraph (b) does not apply, after-tax net accounting profits detailed in financial statements—
(i) that are used by the company for the purposes of reporting, other than reporting for income tax purposes, to any central or state government or any of such a government’s agencies or instruments as has a regulatory function; and
(ii) that, if audited, are not the subject of a qualified audit opinion; or
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(d) if there are no financial statements as described in paragraph (a) and if paragraph (b) does not apply, after-tax net accounting profits detailed in financial statements—
(i) that are used by the company for the purposes of reporting, other than reporting for income tax purposes, to creditors of the company who are not persons associated with the company; and
(ii) that, if audited, are not the subject of a qualified audit opinion
after-income tax loss has a meaning corresponding to the meaning of after-income tax earnings
agent means a person declared by this Act to be an agent for the purposes of income tax
agreement for the sale and purchase of property is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
agreement for the sale and purchase of property or services—
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(a) means a financial arrangement that is a conditional or unconditional agreement to—
(i) acquire or dispose of property; or
(ii) obtain or supply services; and
(b) does not include a forward contract, a futures contract, an option, or a specified option
agricultural, horticultural, or viticultural company means a company that carries on a business that comprises or includes performing any work or rendering a service set out in schedule 4, part C (Rates of tax for schedular payments)
air transport from New Zealand is defined in section CW 56(3) (Non-resident aircraft operators) for the purposes of that section
airport is defined in section HR 7(2) (Meaning of airport operator’s activities) for the purposes of that section
airport asset is defined in section HR 6(7) (Airport operator’s assets) for the purposes of that section
airport authority is defined in section 2 of the Airport Authorities Act 1966
airport operator means the Crown, acting by and through the Minister of Transport, and any local authority that is an airport authority, in their respective capacities as joint venturers under a joint venture agreement
airport operator’s activities is defined in section HR 7 (Meaning of airport operator’s activities) for the purposes of sections HR 5 and HR 6 (which relate to airport operators)
amalgamated company means the 1 company that results from and continues after an amalgamation and that may be 1 of the amalgamating companies or a new company
amalgamating company means a company that amalgamates with 1 or more other companies under an amalgamation
amalgamation means an amalgamation to which both the following apply
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(a) it—
(i) occurs under Part 13 or 15 of the Companies Act 1993; or
(ii) occurs or occurred under a foreign law that has the same effect as, or a similar effect to, the provisions referred to in subparagraph (i); and
(b) it causes 2 or more companies to amalgamate and continue as 1 company
amalgamation rules means the provisions listed in section FO 2 (Amalgamation rules)
amortising property means property for which a person—
(a) is allowed a deduction for an amount of depreciation loss; or
(b) may make a deduction on account of amortisation of expenditure under section EZ 7 (Buying patent rights before 1 April 1993), EZ 8 (Premium paid on land leased before 1 April 1993), or any other amortisation provision
amount—
(a) includes an amount in money’s worth:
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(b) in sections CB 24 (Disposal of timber or right to take timber), CB 25 (Disposal of land with standing timber), and CB 29 (Disposal of minerals), includes the amount treated as—
(i) the price paid or realised under section EB 24 (Apportionment on disposal of business assets that include trading stock):
(ii) the consideration under sections FB 6 and FB 7 (which relate to the disposal of timber on a settlement of relationship property):
(iii) the price realised under sections GC 1 and GC 2 (which relate to the disposal of trading stock for inadequate consideration):
(c) is defined in section EH 35(2) (Meaning of main maximum deposit) for the purposes of that section:
(d) is defined in section EH 78(3) (Meaning of thinning operations maximum deposit) for the purposes of that section:
(e) is defined in section GC 14 (Definitions for sections GC 6 to GC 13) for the purposes of sections GC 6 to GC 13 (which relate to transfer pricing arrangements):
(f) is defined in section RD 33(4) (Subsidised transport) for the purposes of that section:
(g) is defined in section RD 37(2) (Contributions to superannuation schemes) for the purposes of that section:
(h) is defined in section RD 41(4) (Services) for the purposes of that section
amount of all consideration is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
amount of tax, for a payment, means the amount of tax that must be withheld and paid, or paid to the Commissioner under the PAYE rules, ESCT rules, RWT rules, or NRWT rules
ancillary tax means—
(a) provisional tax:
(b) further income tax:
(c) imputation penalty tax:
(d) penalty tax for a Maori authority payable under section 140DB of the Tax Administration Act 1994:
(e) FDP:
(f) further FDP:
(g) FDP penalty tax:
(h) qualifying company election tax:
(i) PAYE:
(j) FBT:
(k) ESCT:
(l) RWT:
(m) NRWT:
(n) withdrawal tax
annual branch equivalent tax account return means the return to be filed with the Commissioner by a company under sections 77 and 78 of the Tax Administration Act 1994
annual FDPA return means the return to be filed with the Commissioner by a company under sections 71 and 72 of the Tax Administration Act 1994
annual gross income is defined in section BC 2 (Annual gross income)
annual ICA return means the return to be filed with the Commissioner by a company under section 69 of the Tax Administration Act 1994
annual income tax balance date is defined in section EG 1(10) (Election to use balance date used in foreign country) for the purposes of that section
annual PCA return means the return to be filed with the Commissioner by a company under section 66 of the Tax Administration Act 1994
annual rate is defined in section EE 61 (Meaning of annual rate)
annual rates means the rates of income tax fixed for a tax year by the annual taxing Act for that year
annual taxing Act means the provisions of any Act by which the rates of income tax are fixed for a tax year
annual total deduction is defined in section BC 3 (Annual total deduction)
approved issuer means a person for whom an approval under section 32M of the Tax Administration Act 1994 is in force
arrangement means an agreement, contract, plan, or understanding, whether enforceable or unenforceable, including all steps and transactions by which it is carried into effect
arrangement for assistance entered into by the government of New Zealand is defined in section CW 22(3) (Amounts derived by overseas experts and trainees in New Zealand by government arrangement) for the purposes of that section
arrangement property is defined in section GB 45(3) (Arrangements involving money not at risk) for the purposes of that section
ASC has the same meaning as available subscribed capital
ASC account means a memorandum account established by an ASC account company under section OF 1(2) (General rules for companies with ASC accounts)
ASC account company means a company that chooses under section OF 1(1) and OF 3 (which relate to ASCA companies) to become an ASCA company
ASC credit means a credit referred to in section OA 5(6) (Credits)
ASC debit means a debit referred to in section OA 6(6) (Debits)
ASCA means available subscribed capital account
assessable income is defined in section BD 1(5) (Income, exempt income, excluded income, non-residents’ foreign-sourced income, and assessable income)
assessment is defined in section 3(1) of the Tax Administration Act 1994
assessment period is defined in section GB 45(3) (Arrangements involving money not at risk) for the purposes of that section
asset—
(a) is defined in section CU 11 (Meaning of asset for sections CU 3 to CU 10) for the purposes of sections CU 3 to CU 10 (which relate to income from mining):
(b) is defined in section DU 8 (Meaning of asset for sections DU 1 to DU 7) for the purposes of sections DU 1 to DU 7 (which relate to deductions for mining)
associated, associated person, person associated, and other expressions about the association of persons with each other, are defined in sections YB 1 to YB 20, including the specific definition of the term associated in—
(a) section YB 4(4) (Company and associate’s associate: 1988 version provisions) for the purposes of that section:
(b) section YB 13(4) (Trusts: person and trustee for person) for the purposes of that section:
(c) section YB 14(5) (Trusts: trusts with common settlor) for the purposes of that section:
(d) section YB 15(5) (Trusts: trustee and settlor: 1988 version provisions) for the purposes of that section:
(e) section YB 17(3) (Partnerships: partnership and associate of partner) for the purposes of that section
associated mining operations is defined in section CU 29 (Other definitions)
association, in subpart HE (Mutual associations), and sections CB 33, CB 34, and DV 19, (which relate to mutual associations), means a body or association of persons, whether incorporated or not
association rebate is defined in section HE 3 (Association rebates) for the purposes of subpart HE (Mutual associations) and sections CB 34 and DV 19 (which relate to mutual associations)
attributed CFC income is defined in section CQ 2 (When attributed CFC income arises)
attributed CFC loss is defined in section DN 2 (When attributed CFC loss arises)
attributed CFC net loss, for a person and for an income year in which they have an attributed CFC loss, means the part of the loss that the person is denied as a deduction because of section DN 4 (Ring-fencing cap on deduction), but must instead deal with under Part I (Treatment of tax losses)
attributed repatriation is defined in section CD 45 (When does a person have attributed repatriation from a controlled foreign company?)
attributing interest means an attributing interest in a foreign investment fund as defined in sections EX 29 to EX 43 (which relate to attributing interests in FIFs)
Australian approved deposit fund means an approved deposit fund as defined in section 10 of the Superannuation Industry (Supervision) Act 1993 (Aust)
Australian exempt public sector superannuation scheme means an exempt public sector superannuation scheme as defined in section 10 of the Superannuation Industry (Supervision) Act 1993 (Aust)
Australian financial year is defined in section CV 8(3) (Regulations: Australian wine producer rebate) for the purposes of that section
Australian ICA company means a company referred to in section OB 2(1) (Australian companies with imputation credit accounts)
Australian regulated superannuation fund means a regulated superannuation fund as defined in section 19 of the Superannuation Industry (Supervision) Act 1993 (Aust)
Australian retirement savings account means a retirement savings account as defined in section 8 of the Retirement Savings Accounts Act 1997 (Aust)
Australian wine producer rebate means a producer rebate (under A New Tax System (Wine Equalisation Tax) Act 1999 (Aust) and regulations made under that Act) that relates to wine exported from New Zealand on or after 1 July 2005
author is defined in section EI 3(6) (Assigning or granting copyright) for the purposes of that section
authorised savings institution means an authorised savings institution as defined in the Home Ownership Savings Act 1974
available capital distribution amount means the amount calculated for a share in a company under section CD 44 (Available capital distribution amount)
available subscribed capital means the amount calculated for a share in a company under section CD 43 (Available subscribed capital (ASC) amount)
available tax loss, for a person and their net income, means—
(a) a loss balance carried forward that, under Part I (Treatment of tax losses), is required to be subtracted from the net income:
(b) an amount of another company’s tax loss that, under Part I, the person, if it is a company, is allowed to subtract from the net income
balance date, for the purposes of section RC 10 (Calculating amount of instalment under standard and estimation methods) and subpart RC (Provisional tax), and schedule 3 (Payment of provisional tax and terminal tax) means the date of the annual balance of a person’s financial statements for their tax year
balloted loan right is defined in section DV 10(3) (Building societies) for the purposes of that section
banking company means a person carrying on in New Zealand the business of banking
base amount is defined in section RC 8(2) (GST ratio method) for the purposes of that section
base premium for the 1998–99 premium year is defined in section EZ 30(3) (Base premium for 1998–99 premium year under Accident Insurance Act 1998) for the purposes of that section
basic tax rate, for a person,—
(a) means the basic rate of income tax for the person set out in schedule 1 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) and schedule 2 (Basic tax rates for PAYE income payments); and
(b) in the case of a transitional year, resulting from a change in a person’s balance date, has the meaning given in section 39(5) of the Tax Administration Act 1994
benchmark distribution means the first taxable Maori authority distribution by a Maori authority in a tax year
benchmark dividend, means the first dividend paid by a company in a tax year that is not 1 of the following kinds
(a) a dividend to which the company is not allowed by section OB 63 (Australian dividends) to attach an imputation credit:
(b) a distribution of a co-operative company for which the company has made an election under section OB 82 (When and how co-operative company makes election)
beneficiary is defined in section DX 1(5) (Testamentary annuities) for the purposes of that section
beneficiary income is defined in section HC 6 (Beneficiary income)
benefit is defined in section DB 45(4) (Bribes paid to public officials) for the purposes of that section
BETA has the same meaning as branch equivalent tax account
BETA company means a company that chooses under section OE 1(1) and OE 3 (which relate to companies with branch equivalent tax accounts) to become a BETA company
BETA person means a person who chooses under section OE 1(2) and OE 17 (which relate to persons with branch equivalent tax accounts) to become a BETA person
binding ruling is defined in section 3 of the Tax Administration Act 1994
bloodstock—
(a) means a horse that is a member of the standardbred or thoroughbred breed of horses; and
(b) includes a share or interest in such a horse
bonus issue means the issue of shares in a company, or the giving of credit for or forgiveness of an amount unpaid on any shares in a company, if the company receives no consideration for the issue, crediting, or forgiveness other than the shareholder choosing not to receive an amount as an alternative to the issue
bonus issue in lieu means a bonus issue made, on or after 1 October 1988, under an arrangement conferring on shareholders of a company an election whether to receive—
(a) a bonus issue; or
(b) money; or
(c) money’s worth, other than money’s worth that is a bonus issue
branch equivalent company means, at any time for any person, a company that is at the time—
(a) a controlled foreign company; or
(b) a company from which the person is deriving FIF income or incurring FIF loss that they calculate using the branch equivalent method, including income or loss under section EX 50(6) (Branch equivalent method)
branch equivalent income, for a foreign company and for an accounting period, means the amount of income for the accounting period calculated under section EX 21 (Branch equivalent income or loss: calculation rules)
branch equivalent loss, for a foreign company and for an accounting period, means the amount of loss for the accounting period calculated under section EX 21 (Branch equivalent income or loss: calculation rules)
branch equivalent method means the method of calculating FIF income or FIF loss in section EX 50 (Branch equivalent method)
branch equivalent tax account means the account maintained by a BETA company under section OE 2 (Branch equivalent tax accounts of companies) or a BETA person under section OE 17(3) (Person choosing to become BETA person)
branch equivalent tax credit means a credit referred to in section OA 5(5) (Credits)
branch equivalent tax debit means a debit referred to in section OA 6(5) (Debits)
bribe is defined in section DB 45(4) (Bribes paid to public officials) for the purposes of that section
broodmare means a broodmare that is bloodstock
building society is defined in section 2 of the Building Societies Act 1965
business—
(a) includes any profession, trade, or undertaking carried on for profit:
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(b) includes the activities of—
(i) a statutory producer board:
(ii) an airport operator:
(c) is further defined in section DD 11 (Some definitions) for the purposes of subpart DD (Entertainment expenditure)
business contacts is defined in section DD 11 (Some definitions) for the purposes of subpart DD (Entertainment expenditure)
business premises is defined in section DD 11 (Some definitions) for the purposes of subpart DD (Entertainment expenditure)
business tool means an item that is used by an employee in the performance of their work duties and in the absence of section CX 21 (Business tools) would give rise to an unclassified benefit
business use, for a motor vehicle and for a person, means travel undertaken by the vehicle wholly in deriving the person’s income
calculation method, for the calculation of FIF income or FIF loss, means any of the accounting profits method, the branch equivalent method, the comparative value method, the deemed rate of return method, the fair dividend rate method, and the cost method
cancellation, for a company and for a share, means the acquisition, redemption, or other cancellation of the whole share by the company, including on the liquidation of the company
capital limitation is defined in section DA 2(1) (General limitations)
capital property is defined in section CD 44(18) (Available capital distribution amount) for the purposes of that section
car,—
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(a) in section EZ 16 (Amount of depreciation loss for plant or machinery additional to section EZ 15 amount), and in the definition of qualifying asset,—
(i) means a motor vehicle designed exclusively or mainly to carry up to 9 people, including the driver; and
(ii) includes such a motor vehicle that has rear doors and collapsible rear seats; and
(iii) does not include a moped or a motorcycle:
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(b) in the FBT rules, and in the definition of work-related vehicle,—
(i) means a motor vehicle designed exclusively or mainly to carry people:
(ii) includes such a motor vehicle that has rear doors or collapsible rear seats:
(iii) does not include a minibus, moped, motorcycle, or taxicab
cash accounting method is defined in section EG 2(4) (Adjustment for changes to accounting practice) for the purposes of that section
cash basis person is defined in section EW 54 (Meaning of cash basis person)
casual agricultural employee means—
(a) a casual agricultural worker:
(b) a shearer:
(c) a shearing shed hand
casual agricultural worker means a person engaged on a day to day basis for a period of no more than 3 months as a casual seasonal worker for the exclusive purpose of doing seasonal agricultural, horticultural, market gardening, nursery, orchard, or tobacco farming work, or other seasonal work that, in the opinion of the Commissioner, is work of a like nature to those classes of work
category A income is defined in section HR 3(1) (Definitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds)
category B income is defined in section HR 3(3) (Definitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds)
CFC has the same meaning as controlled foreign company
charitable or other public benefit gift is defined in section LD 3 (Meaning of charitable or other public benefit gift) for the purposes of subpart LD (Tax credits for charitable or other public benefit gifts)
charitable organisation—
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(a) means, for a quarter or an income year, an association, fund, institution, organisation, society, or trust listed in schedule 32 (Recipients of charitable or other public benefit gifts)—
(i) in the quarter; or
(ii) in the income year, if fringe benefit tax is payable on an income year basis under section RD 60 (Close company option); and
(b) does not include a local authority, a public authority, or a university
charitable purpose includes every charitable purpose, whether it relates to the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community, and—
(a) the purpose of a trust, society, or institution is charitable under this Act if the purpose would meet the public benefit requirement apart from the fact that the beneficiaries of the trust, or the members of the society or institution, are related by blood:
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(b) a marae has a charitable purpose if—
(i) the physical structure of the marae is situated on land that is a Maori reservation referred to in Te Ture Whenua Maori Act 1993 (Maori Land Act 1993); and
(ii) the funds of the marae are not used for a purpose other than the administration and maintenance of the land and of the physical structure of the marae, or not used for a purpose that is a charitable purpose other than under this paragraph
charitable trust is defined in section HC 13 (Charitable trusts) for the purposes of the trust rules
chief executive is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
chief executive of the administering department—
(a) means the chief executive, appointed under the State Sector Act 1988, of the department responsible for administering the Social Security Act 1964; and
(b) includes any person authorised to perform any of the functions of the chief executive
child in subparts MA to MF and MZ (which relate to tax credits for families), and in the definition of dependent child, means a person who is not in a marriage, civil union, or de facto relationship between a man and a woman, and who—
(a) is aged 15 years or less; or
(b) is aged 16 or 17 years and is not financially independent; or
(c) is aged 18 years and is a person for whom a tax credit is allowed under section MD 1 (Family assistance credit) or both sections MD 1 and ME 1 (Family tax credit)
child tax credit is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
civil union partner, in subparts MA to MF and MZ (which relate to tax credits for families) and section LC 4 (Tax credits for transitional circumstances) and in the definitions of entitlement period, full-time earner, and separated person, does not include a separated person
claim, in the life insurance rules, is defined in section EY 7 (Meaning of claim)
claim of right means a belief that an act is lawful, although the belief may be based on ignorance, or mistake, of—
(a) fact; or
(b) any matter of law other than the enactment against which the offence is alleged to have been committed
class, in subpart EC (Valuation of livestock), and in the definition of national average market value,—
(a) means a category of livestock listed in schedule 17, column 2 (Types and classes of livestock); and
(b) when used of a particular type of livestock, means any of the categories listed for that particular type
close company—
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(a) means, at any time, a company to which 1 of the following applies:
(i) at the time there are 5 or fewer natural persons the total of whose voting interests in the company is more than 50% (treating all natural persons associated at the time as 1 natural person); or
(ii) at the time a market value circumstance exists for the company and there are 5 or fewer natural persons the total of whose market value interests in the company is more than 50% (treating all natural persons associated at the time as 1 natural person); and
(b) in section RD 3(2) to (4) (PAYE income payments), includes a company with 25 or fewer shareholders; and
(c) does not include a special corporate entity
close of trading spot exchange rate, for any foreign currency on any day, means the rate determined by applying the following paragraphs in order
(a) the rate of a spot contract for the purchase of New Zealand dollars using the foreign currency at any time on that day on a market approved, with the rate obtained from the sources of information approved, by the Commissioner in determination G6D made under section 64E of the Income Tax Act 1976 (or a determination issued in substitution for that determination); and
(b) if no such rate can be obtained for that day, then the rate on the next day on which it can be obtained and that is no later than 5 working days after the first day; and
(c) if no such rate of a spot contract can be obtained, the cross rate determined as at 3.00 pm New Zealand time on that day by applying the method outlined in paragraph 6(3)(c) of determination G6D made under section 64E of the Income Tax Act 1976 (or in the corresponding paragraph of a determination issued in substitution for that determination); and
(d) if no such rate can be obtained, the rate determined by applying the method set out in paragraph 6(2) of determination G9A made under section 64E of the Income Tax Act 1976 (or in the corresponding paragraph of a determination issued in substitution for that determination)
close relative is defined in section FC 1(2) (What this subpart does) for the purposes of subpart FC (Distribution, transmission, and gifts of property)
closely-held company means, at any time, a company to which 1 of the following applies
(a) at the time there are 5 or fewer persons the total of whose direct voting interests in the company is more than 50%, treating all persons associated at the time as 1 person; or
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(b) at the time,—
(i) a market value circumstance exists for the company; and
(ii) there are 5 or fewer persons the total of whose direct market value interests in the company is more than 50%, treating all persons associated at the time as 1 person
closing stock, for a person and for an income year, means trading stock of the person at the end of the income year
combined imputation and CTR ratio means the ratio set out in section OD 22 (CTR credits and imputation credits attached to dividends)
combined imputation and FDP ratio means the ratio set out in section OC 29 (FDP credits and imputation credits attached to dividends)
combined tax and earner-related payment means, for a PAYE income payment, the total of—
(a) the amount of tax for the PAYE income payment required to be withheld and paid under the PAYE rules; and
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(b) the amount withheld from the PAYE income payment under—
(i) section 115 of the Accident Rehabilitation and Compensation Insurance Act 1992, on account of the earner’s premium payable by employees under the Act; or
(ii) section 285 of the Accident Insurance Act 1998, on account of the earner’s premium payable by employees under the Act; or
(iii) section 221 of the Injury Prevention, Rehabilitation, and Compensation Act 2001, on account of the earner’s levy payable by employees under the Act
commencement of this Act, in sections ZA 3 (Transitional provisions), ZA 4 (Saving of binding rulings), ZA 5 (Saving of accrual determinations), and ZA 6 (Comparative tables of old and new provisions), means commencement under section A 2(2) (Commencement)
commercial bill—
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(a) includes—
(i) a document creating or securing a legal or equitable security over goods, as defined in section 16 of the Personal Property Securities Act 1999, for the payment of money owing or to become owing, whether or not the document is registered under an Act; and
(ii) a bill of exchange, as defined in section 3 of the Bills of Exchange Act 1908; and
(iii) a promissory note, as defined in section 84 of the Bills of Exchange Act 1908, other than a banknote; and
(iv) a Treasury Bill; and
(v) a document or agreement that has substantially the same purpose or effect as an item referred to in any of subparagraphs (i) to (iv); and
(vi) a share or interest in an item referred to in any of subparagraphs (i) to (v); and
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(b) does not include—
(i) a debenture or bond for the payment of a security issued by a body corporate; or
(ii) a security, whether legal or equitable, over an estate or interest in land
commercial production means the production of petroleum—
(a) in a state suitable for delivery to a buyer, consumer, processor, refinery, or user; and
(b) in commercial quantities; and
(c) on a continuing basis
Commissioner means the Commissioner of Inland Revenue as defined in section 3 of the Tax Administration Act 1994
common interest is defined in section YC 13(4) (Corporate spin-outs) for the purposes of that section
common market value interest—
(a) means the market value interest measured under section IC 3(4) (Common ownership: group of companies) for the purposes of that section and section IC 4:
(b) is defined in section YC 13(6) (Corporate spin-outs) for the purposes of that section
common span is defined in section IP 2(1) (Group companies’ common span) for the purposes of subpart IP (Meeting requirements for part-years)
common voting interest—
(a) means the voting interest measured under section IC 3(3) (Common ownership: group of companies) for the purposes of that section and section IC 4:
(b) is defined in section YC 13(5) (Corporate spin-outs) for the purposes of that section
commonality period is defined in section IC 6(1) (Common ownership for period) for the purposes of Part I (Treatment of tax losses)
Commonwealth—
(a) means the British Commonwealth of Nations; and
(b) includes every territory for whose international relations the Government of any country of the Commonwealth is responsible
community trust is defined in section 4 of the Community Trusts Act 1999
company—
(a) means a body corporate or other entity that has a legal existence separate from that of its members, whether it is incorporated or created in New Zealand or elsewhere:
(b) includes a unit trust:
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(c) includes a group investment fund that is not a designated group investment fund, but only to the extent to which the fund results from investments made into it that are—
(i) not from a designated source, as defined in section HR 3(5) (Definitions for section HR 2: group investment funds); and
(ii) not made before 23 June 1983, including an amount treated as invested at that date under the definition of pre-1983 investment in section HR 3(8):
(d) includes an airport operator:
(e) includes a statutory producer board:
(f) includes a society registered under the Incorporated Societies Act 1908:
(g) includes a society registered under the Industrial and Provident Societies Act 1908:
(h) includes a friendly society:
(i) includes a building society:
(j) is further defined in section EX 30(7) (Direct income interests in FIFs) for the purposes of that section
company dividend statement means a statement required by section 67 of the Tax Administration Act 1994 to be completed and retained by a company for a dividend
comparative value method means the method of calculating FIF income or FIF loss in section EX 51 (Comparative value method)
compensation is defined in section LC 5(4) (Meaning of engaged in full-time work) for the purposes of that section
completed, for a film, means the completion of the film to—
(a) the stage of production at which the film has been completely edited, shot by shot, to its final length; or
(b) a production stage equivalent to that described in paragraph (a)
complying fund calculation period is defined in section RD 65(13) (Employer’s superannuation contributions) for the purposes of that section
complying fund rules is defined in section RD 66 (Complying fund rules)
complying superannuation fund means a superannuation fund that is approved as a complying superannuation fund by the Government Actuary under section 35 of the Superannuation Schemes Act 1989
complying trust is defined in section HC 10 (Complying trusts)
conduct is defined in section IZ 1(12) (Use of specified activity net losses) for the purposes of that section
conduit company is a company that meets the requirements of section FF 2 (When interest apportionment rule applies)
consideration—
(a) is defined in section EE 45 (Consideration for purposes of section EE 44) for the purposes of section EE 44 (Application of sections EE 48 to EE 52):
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(b) means an amount determined under the financial arrangements rules in—
(i) the financial arrangements rules:
(ii) section EX 21(11) (Branch equivalent income or loss: calculation rules):
(iii) sections FO 12 to FO 15 (which relate to the treatment of financial arrangements on amalgamation):
(iv) sections FO 18 to FO 20 (which relate to companies that are parties to financial arrangements):
(v) section HC 31(4) (When existing trusts come into tax base)
consolidated BETA group is defined in section OP 97(1) (Branch equivalent tax accounts of consolidated BETA groups)
consolidated FDPA group is defined in section OP 51(1) (FDP accounts of consolidated FDP groups)
consolidated group means, at any time, a consolidated group formed under section FM 35 (Forming consolidated group) as it is constituted at that time
consolidated imputation group means—
(a) an imputation group:
(b) a resident imputation subgroup:
(c) a consolidated group, no member of which is a member of an imputation group
consolidation rules means the provisions listed in section FM 2(2) (Consolidation rules)
contaminant means a contaminant as defined in section 2(1) of the Resource Management Act 1991
continental shelf is defined in the Continental Shelf Act 1964
continuity period—
(a) is defined in section IA 5(6) (Restrictions on companies’ loss balances carried forward) for the purposes of that section:
(b) is defined in section LP 4(3) (Continuity rules for carrying credits forward) for the purposes of that section
continuity provisions means—
(a) section GB 3 (Arrangements for carrying forward loss balances: companies); and
(b) section GB 4 (Arrangements for grouping tax losses: companies); and
(c) sections IA 3 and IA 4 (which relate to the use of tax losses); and
(d) section IA 5 (Restrictions on companies’ loss balances carried forward); and
(e) section IC 1 (Company A making tax loss available to company B); and
(f) section LP 3(4) (Use of remaining credits); and
(g) section OB 41 (ICA debit for loss of shareholder continuity); and
(h) section OC 24 (FDPA debit for loss of shareholder continuity); and
(i) sections OE 10 and OE 15 (which relate to BETA credits and debits for loss of shareholder continuity); and
(j) section OK 15 (MACA debit for loss of shareholder continuity)
contract activity or service, for a non-resident contractor, means—
(a) performing any work in New Zealand:
(b) rendering a service of any kind in New Zealand:
(c) providing the use of, or right to use, in New Zealand, any personal property or services of a person other than the non-resident contractor
contract of service is defined in section DC 4(5) (Payments to working partners) for the purposes of that section
contract payment, for a non-resident contractor, means any payment other than—
(a) a royalty; or
(b) a payment made to the non-resident contractor by or on behalf of a person who is not associated with the contractor to reimburse costs incurred by the contractor; or
(c) a payment referred to in schedule 4, part E (Rates of tax for schedular payments)
contribution, in the FBT rules, means a contribution made—
(a) directly; or
(b) indirectly by reimbursement through another person
control, for a company, is defined in section YC 1 (Meaning of control)
control interest, for a foreign company, is defined in sections EX 2 (Four categories for calculating control interests) and EX 7 (Indirect control interests)
control interest category means 1 of the categories of control interest listed in section EX 2(2) (Four categories for calculating control interests)
controlled foreign company is defined in section EX 1 (Meaning of controlled foreign company)
controlled petroleum mining company means a company that is a petroleum miner if—
(a) 90% or more in value of its outstanding shares are held, directly or indirectly, by or for 5 or fewer persons; and
(b) the market value of a petroleum permit, including an asset of the kind described in section CT 7(1)(b) or (c) (Meaning of petroleum mining asset) attributable to the permit, held by the company is at least 75% of the value of its assets minus its liabilities, as shown in the company’s audited financial statement or accounts prepared under generally accepted accounting practice
controlled petroleum mining entity means—
(a) a controlled petroleum mining company; or
(b) a controlled petroleum mining holding company; or
(c) a controlled petroleum mining trust; or
(d) a controlled petroleum mining holding trust
controlled petroleum mining holding company means a company if—
(a) 90% or more in value of its outstanding shares are held, directly or indirectly, by or for 5 or fewer persons; and
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(b) the total market value of the following shares and trust interests held by the company is at least 75% of the value of its assets minus its liabilities, as set out in the company’s audited financial statement or accounts prepared according to generally accepted accounting practice:
(i) shares in petroleum mining companies:
(ii) shares in petroleum mining holding companies:
(iii) trust interests in petroleum miners that are trusts:
(iv) trust interests in petroleum mining holding trusts
controlled petroleum mining holding trust means a trust that is a petroleum miner if—
(a) 90% or more in value of the trust is owned, directly or indirectly, by or for 5 or fewer persons; and
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(b) the total market value of the following shares and trust interests held by the trust is at least 75% of the value of its assets minus its liabilities, as set out in the trust’s accounts prepared according to generally accepted accounting practice:
(i) trust interests in petroleum miners that are trusts:
(ii) trust interests in other petroleum mining holding trusts:
(iii) shares in petroleum miners that are companies:
(iv) shares in petroleum mining holding companies
controlled petroleum mining trust means a trust that is a petroleum miner if—
(a) 90% or more in value of the trust is owned, directly or indirectly, by or for 5 or fewer persons; and
(b) the market value of a petroleum permit, including an asset of the kind described in section CT 7(1)(b) or (c) (Meaning of petroleum mining asset) attributable to the permit, held by the trust is at least 75% of the value of its assets minus its liabilities, as shown in the trust’s accounts prepared under generally accepted accounting practice
controlling shareholder is defined in section HD 15(9) (Asset stripping of companies) for the purposes of that section
convertible credit means a credit that a person is allowed under Part L (Tax credits and other credits)—
(a) for an imputation credit; or
(b) for FDP, if the person is not entitled to a refund of the credit under Part R (General collection rules)
convertible note means a document or a combination of documents that—
(a) is issued or given by a company; and
(b) creates or relates to money lent to the company, whether or not secured; and
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(c) provides, whether exclusively or not,—
(i) for the holder to have a right to subscribe for shares or stock in the capital of the company or in the capital of another company; or
(ii) for the amount or any part of the amount, with or without interest and whether at par or otherwise, to be converted into or repaid by the issue of shares in the company, whether the conversion or repayment by the issue of shares is mandatory or is at the option of the company or of the holder
co-operative company does not include a statutory producer board
copyright in a sound recording means the copyright in the version of the recording of which copies have been sold or offered for sale to the public
core acquisition price is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
corpus is defined in section HC 4 (Corpus of trust) for the purposes of the trust rules
corresponding income year, for a tax year, means an income year that ends in the period starting on 1 October in the tax year and ending on 30 September immediately after the tax year
cost,—
(a) in subpart EB (Valuation of trading stock (including dealer’s livestock)), for trading stock, means costs incurred in the ordinary course of business to bring trading stock to its present location and condition, including purchase costs and costs of production, calculated under sections EB 6 to EB 8 (which relate to costs for standard valuations), EB 15 to EB 18 (which relate to costs for low-turnover traders), and EB 22 (Valuing closing stock consistently for low-turnover traders):
(b) is defined in section RD 40(3) (Goods) for the purposes of that section:
(c) in sections RD 42 and RD 43 (which relate to goods provided with staff discount), for a registered person who may claim input tax for the cost of the goods, means the GST-inclusive cost of the goods to the person
cost of timber, for some timber, means the amount given for the timber by section DP 11(1) (Cost of timber) that is a deduction under DP 11(2)
cost method means a method of calculating FIF income or FIF loss under section EX 56 (Cost method)
cost price,—
(a) in subpart EC (Valuation of livestock), does not include any amount of input tax in relation to the supply of livestock or trading stock to a person; and
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(b) in section FZ 2 (Effect of specified lease on lessor and lessee), and in the definition of specified lease, and for a personal property lease asset, means the amount of expenditure of a capital nature that is incurred, in acquiring and installing the asset,—
(i) by the lessor; or
(ii) if the lessor under a lease acquires the asset as lessee under any other lease, by the person who is the lessor in the other lease; and
(c) as a qualification on paragraph (b), if, in carrying on a business in the income year in which the asset is acquired, the lessor acquires, manufactures, or assembles as trading stock, and distributes or sells, an asset of the same kind as the asset, the cost price for the asset is an amount equal to the normal price for which, at the start of the lease period, the lessor would have sold an asset of the same kind as the asset to the lessee; and
(d) as another qualification on paragraph (b), if the lessor has used the asset in deriving income before the lease is entered into, the cost price of the asset is equal to the capital expenditure incurred by the lessor in acquiring the asset, reduced by the total of the amounts of depreciation loss for which the lessor has been allowed deductions for the asset; and
(e) as another qualification on paragraph (b), if, for an asset and a lease entered into on or after 29 October 1983, an amount cannot be determined under any of paragraphs (b) to (d), the cost price for the asset is an amount equal to the market price of the asset at the start of the term of the lease or, if there is no such market price or there are 2 or more, is an amount equal to the amount that, in the circumstances of the case, is reasonable, having regard to the nature of the asset and to the tenor of this definition
council-controlled organisation—
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(a) means—
(i) an organisation that is a council-controlled trading organisation as defined in section 6 of the Local Government Act 2002, and is not a company:
(ii) a company that is a council-controlled organisation, under paragraph (a)(i) of the definition of council-controlled organisation in section 6(1) of the Local Government Act 2002:
(iii) an organisation that is a council-controlled organisation, under paragraph (b) of the definition of council-controlled organisation in section 6(1) of the Local Government Act 2002, and that has, in an organisation of a kind described in subparagraph (i) or (ii), control of at least 50% of the votes at any meeting of the members or the controlling body of the organisation, or the right to appoint at least 50% of the directors, managers, or trustees of the organisation (however the positions are described):
(iv) an organisation that would be a council-controlled organisation of a kind described in paragraph (a) or (b) or (c) if it did not have an exemption granted under section 6(4)(i) of the Local Government Act 2002:
(v) the New Zealand Local Government Association Incorporated:
(vi) a company or organisation, as defined in section 6(2) of the Local Government Act 2002, that is subject to the control, directly or indirectly, of the New Zealand Local Government Association Incorporated:
(vii) New Zealand Local Government Insurance Corporation and any subsidiaries it has:
(viii) Watercare Services Limited and any subsidiaries it has: but
(b) does not include the Auckland Regional Transport Authority (as established by section 7 of the Local Government (Auckland) Amendment Act 2004) or Auckland Regional Holdings (as established by section 18 of the Local Government (Auckland) Amendment Act 2004
counted associate is defined in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section
credit account continuity provisions means—
(a) section OB 41 (ICA debit for loss of shareholder continuity); and
(b) section OC 24 (FDPA debit for loss of shareholder continuity); and
(c) sections OE 10 and OE 15 (which relate to BETA credits and debits for loss of shareholder continuity)
credit of tax has the same meaning as tax credit
credit transfer notice means a credit transfer notice issued under section 30C of the Tax Administration Act 1994
Crown Research Institute is defined in section 2 of the Crown Research Institutes Act 1992
CTR means conduit tax relief
CTR account means the account referred to in section OA 2(1)(c) (Memorandum accounts)
CTR additional dividend means a dividend paid under section LQ 5 (CTR additional dividends)
CTR company means a company that chooses under sections OD 1(1) and OD 3 (which relate to CTR companies) to become a CTR company
CTR credit is a credit referred to in section OA 5(4) (Credits)
CTR debit is a debit referred to in section OA 6(4) (Debits)
CTR group member is defined in section YD 11 (Meaning of CTR group member)
CTR holding company is defined in section YD 10 (Meaning of CTR holding company)
CTR ratio means the ratio set out in section OD 20 (CTR credits attached to dividends)
CTRA means conduit tax relief account
current accounting year for the purposes of subpart LL (Underlying foreign tax credits (UFTC)), means the accounting year in which a company pays a foreign dividend
current value is defined in section HR 3(4) (Definitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds)
date of transfer, in subpart FB (Transfers of relationship property), and in the definitions of year of transfer, for property transferred under a relationship agreement, means the date on which the property was transferred
date the deposit ends—
(a) is defined in section EH 36 (Other definitions) for the purposes of the main income equalisation scheme:
(b) is defined in section EH 62 (Other definitions) for the purposes of the adverse event income equalisation scheme:
(c) is defined in section EH 79 (Other definitions) for the purposes of the thinning operations income equalisation scheme
day is defined in section RD 30(2) (Private use of motor vehicle: 24-hour period) for the purposes of section RD 29 (Private use of motor vehicle: formulas)
de facto partner means a person who is party to a de facto relationship
debenture includes debenture stock
debenture holder includes the owner of debenture stock
deduction, for a person, means a deduction of the person under section BD 2 (Deductions)
deemed rate of return method means the method of calculating FIF income or FIF loss in section EX 55 (Deemed rate of return method)
deferred military pay is defined in section CW 24(2) (Deferred military pay for active service) for the purposes of that section
defined benefit fund means a superannuation scheme, registered under the Superannuation Schemes Act 1989, that must comply with section 15(1)(a) of that Act
dependent child, for a child and for a person, means a child—
(a) whose care is primarily the responsibility of the person; and
(b) who is being maintained as a member of the person’s family; and
(c) who is financially dependent on the person; and
(d) who is not a child for whom payments are being made under section 363 of the Children, Young Persons, and Their Families Act 1989; and
(e) who is not a child for whom a benefit is being paid under section 28 or 29 of the Social Security Act 1964
deposit—
(a) is defined in section EH 36 (Other definitions) for the purposes of the main income equalisation scheme:
(b) is defined in section EH 62 (Other definitions) for the purposes of the adverse event income equalisation scheme:
(c) is defined in section EH 79 (Other definitions) for the purposes of the thinning operations income equalisation scheme
depreciable intangible property is defined in section EE 62 (Meaning of depreciable intangible property)
depreciable property is defined in sections EE 6 (What is depreciable property?) and EE 7 (What is not depreciable property?)
depreciation loss—
(a) means a loss that a person has in the circumstances set out in section EE 1(2) (What this subpart does); and
(b) includes a deduction for depreciation that a person was allowed under an earlier Act
depreciation method is defined in section EE 12 (Depreciation methods)
depreciation percentage means a percentage set by the Commissioner under section EC 33 (Determining depreciation percentages)
depreciation recovery income—
(a) means income that a person has in the circumstances set out in section EE 1(3) (What this subpart does); and
(b) includes income that a person had under the corresponding provision of an earlier Act
derived from New Zealand means having a source in New Zealand described in sections YD 4 (Classes of income treated as having New Zealand source) and YZ 1 (Source rule for interest)
designated group investment fund is defined in section HR 3(6) (Definitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds)
designated source investments is defined in section HR 3(7) (Definitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds)
designated sources is defined in section HR 3(5) (Definitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds)
development is defined in section DB 35 (Some definitions) for the purposes of sections DB 34, EE 1, EJ 22, and EJ 23 (which relate to deductions and allocation of deductions for development expenditure)
development investments is defined in section LZ 5 (Some definitions) for the purposes of sections LZ 2 to LZ 4 (which relate to credits for certain development projects)
diminished value, for an income year, means the value established by subtracting from the amount of expenditure described in sections DO 4 and DO 5, DO 12, or DP 3 (which relate to certain businesses on land) the following amounts
(a) the total income derived under section CB 28(8) (Environmental restoration accounts) in relation to the expenditure; and
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(b) the total amount allowed as a deduction for the expenditure to any person—
(i) in an earlier income year under this Act or an earlier Act:
(ii) in the income year under this Act, except an amount allowed in the income year under section DB 46, DO 5, DO 6, DO 12, or DP 3
diminishing value equivalent is defined in section EC 34(4) (General rule) for the purposes of that section
diminishing value method, for depreciation, is defined in section EE 67 (Other definitions)
diminishing value rate is defined in section EE 67 (Other definitions)
direct control interest is defined in section EX 5 (Direct control interests)
direct income interest is defined in section EX 9 (Direct income interests) in relation to a CFC, and in section EX 30 (Direct income interests in FIFs), in relation to a foreign company
direct market value circumstance means a market value circumstance for a company other than a market value circumstance described in paragraph (g) of the definition of market value circumstance
direct market value interest means a market value interest of a person in a company other than a market value interest of the person in the company to the extent to which it is treated as arising only under YC 4(5) (Look-through rule for corporate shareholders)
direct voting interest means a voting interest of a person in a company other than a voting interest of the person in the company to the extent to which it is treated as arising only under section YC 4(2) (Look-through rule for corporate shareholders)
director—
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(a) means—
(i) a person occupying the position of director, whatever title is used:
(ii) a person in accordance with whose directions or instructions the persons occupying the position of directors of a company are accustomed to act:
(iii) a person treated as being a director by any other provision of this Act:
(iv) in the case of an entity that does not have directors and that is treated as, or assumed to be, a company by a provision of this Act, any trustee, manager, or other person who acts in relation to the entity in the same way as a director would act, or in a similar way to that in which a director would act, were the entity a company incorporated in New Zealand under the Companies Act 1993:
(b) is defined in section HD 15(9) (Asset stripping of companies) for the purposes of that section
disabled workshop payment is defined in section CW 33(2) (Allowances and benefits) for the purposes of that section
discontinuance profit means the amount calculated by a life insurer following the steps in section EY 36 (Discontinuance profit for income year)
discontinuance profit formula means the formula in section EY 37 (Discontinuance profit formula (existing policies)) or the formula in section EY 38 (Discontinuance profit formula (new policies))
discount payment date is defined in section EZ 30(3) (Base premium for 1998–99 premium year under Accident Insurance Act 1998) for the purposes of that section
dispose,—
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(a) in sections CB 6 to CB 16, CB 18, CB 19, CB 21, and CB 22 (which relate to the disposal of land), for land, includes—
(i) compulsory acquisition under any Act by the Crown, a local authority, or a public authority:
(ii) if there is a mortgage secured on the land, a disposal by or for the mortgagee as a result of the mortgagor’s defaulting under the mortgage:
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(b) in sections CB 24 (Disposal of timber or right to take timber), CB 25 (Disposal of land with standing timber), DP 10 (Cost of acquiring timber or right to take timber: other cases), DP 11 (Cost of timber), and GC 2 (Disposals of timber rights or standing timber), includes—
(i) to grant a licence or easement:
(ii) to grant a right to take timber:
(iii) to create a right to take timber:
(iv) to create a forestry right, as defined in the Forestry Rights Registration Act 1983, other than a right in favour of the proprietor:
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(c) in sections CB 29 (Disposal of minerals) and DB 30 (Cost of non-specified mineral), includes—
(i) to grant a licence or easement:
(ii) to grant a right to take minerals from land:
(d) is defined in section CE 2 (Value and timing of benefits under share purchase agreements) for the purposes of that section:
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(e) in sections CT 1, DT 2 to DT 4, DT 8 to DT 11, DT 13, DT 19, DZ 6, EJ 15, EJ 16, EJ 17, EZ 3, and GB 20 (which relate to petroleum mining),—
(i) means to sell or transfer an asset, voluntarily or involuntarily; and
(ii) includes to lose or destroy an asset:
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(f) for depreciable property, includes destroy, withdraw, or let lapse, but does not include the following:
(i) for a patent application, conclude the patent application because a patent is granted in relation to the patent application:
(ii) for a geothermal well, have the well stop being available for use because section EE 6(4) (What is depreciable property) no longer applies:
(g) in subpart FC (Distribution, transmission, and gifts of property) means a disposal of property in the manner provided for in that subpart
disposition of property in the trust rules, and in the definition of superannuation contribution, but not for a unit trust,—
(a) means an assignment, conveyance, delivery, payment, settlement, transfer, or other alienation of property, whether at law or in equity; and
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(b) without limiting the generality of paragraph (a), includes—
(i) the issue of shares in a company:
(ii) the creation of a trust:
(iii) the grant or creation of a charge, lease, licence, mortgage, power, servitude, or other estate, interest, or right, in or over property:
(iv) the abandonment, discharge, forfeiture, release, or surrender of a contract, debt, or thing in action, or of an estate, interest, power, or right in or over property; and for this purpose a debt, or any other estate, interest, or right, is treated as having been released or surrendered when it becomes irrecoverable or unenforceable by action or for any reason ceases to exist:
(v) the exercise of a general power of appointment in favour of a person other than the holder of the power; and
(c) includes a disposition as defined in paragraph (a) or (b) by will or intestacy; and
(d) does not include a disclaimer of an interest under a disposition made during life or by will; and
(e) does not include a disclaimer of an interest under an intestacy
distinctive work clothing is defined in section CX 30(2) (Distinctive work clothing) for the purposes of that section
distribution is defined in section HC 14 (Distributions from trusts) for the purposes of the trust rules
dividend—
(a) is defined in sections CD 3 to CD 21 (which relate to income from equity) for the purposes of this Act, except for the definition of investment society dividend:
(b) in the RWT rules, does not include any dividend of the kind listed in section RE 2(1)(b), (5) and (6) (Resident passive income):
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(c) in the NRWT rules,—
(i) includes an FDP credit attached to the dividend; and
(ii) includes an amount paid to a shareholder that is a company and a related person under section CD 44(15) to (17) (Available capital distribution amount) of the company paying the amount, if the amount is excluded from dividend treatment generally only as a result of sections CD 26(2)(b) (Capital distributions on liquidation or emigration) and CD 44; and
(iii) does not include the amount of any imputation credit attached to the dividend:
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(d) in subpart LP (Tax credits for supplementary dividends),—
(i) includes an amount paid to a shareholder that is a company and a related person under section CD 44(15) to (17) (Available capital distribution amount) of the company paying the amount, if the amount is excluded from dividend treatment generally only as a result of sections CD 26(2)(b) (Capital distributions on liquidation or emigration) and CD 44; and
(ii) does not include any non-cash dividend; and
(iii) does not include any dividend derived by a life insurer from a company treated as resident in New Zealand because of the Commissioner granting an application under section EY 49 (Non-resident life insurer becoming resident):
(e) in sections FM 30, GB 38, OP 58, and OP 64 to OP 68 (which relate to consolidated groups), subpart OE (Branch equivalent tax accounts (BETA)), subpart OJ (Policyholder credit accounts (PCA)), in the FDP rules and the imputation rules, and in the definitions of benchmark dividend, combined imputation and FDP ratio, company dividend statement, excess credit amount, FDP credit, FDP ratio, foreign dividend, imputation credit, imputation ratio, pay, and shareholder dividend statement, does not include any amount treated as a dividend under section CB 34(5) (Amounts derived by members from mutual associations), GB 23 (Excessive remuneration to relatives), or GB 25 (Close company remuneration to shareholders, directors, or relatives)
dividend treated as interest means a dividend that is paid in relation to a share issued by a company that is at the time of payment—
(a) a company not resident in New Zealand; or
(b) a company whose constitution prohibits all of its income or property from being distributed to a proprietor, member, or shareholder of the company; or
(c) a company all the income of which is exempt income other than under section CW 9 (Dividend derived by company from overseas) or CW 10 (Dividend within New Zealand wholly-owned group); or
(d) a company that, in New Zealand, is engaged solely in the business of life insurance referred to in section EY 8(2)(c) (Meaning of life insurance) and is not a company that maintains an FDP account because of an election made under section OC 1 (General rules for companies with FDP accounts)
double tax agreement is defined in section BH 1 (Double tax agreements)
early balance date has the meaning given in section YE 1(6) (References to balance dates and years)
early-payment discount is defined in section RC 40 (Some definitions) for the purposes of sections RC 37 to RC 39 (which relate to discounts of income tax)
economic rate is defined in section EE 67 (Other definitions)
education grant is defined in section CF 1(2) (Benefits, pensions, compensation, and government grants) for the purposes of that section
effective interest is defined in section HA 43 (Meaning of effective interest)
election day worker means a person to whom all the following apply
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(a) the person is engaged as a Deputy Returning Officer, poll clerk, interpreter, or usher, or for any other purpose, for—
(i) an election or poll held under the provisions of the Electoral Act 1993 or the Local Electoral Act 2001 or the Local Restoration Polls Act 1990; or
(ii) an election or poll to which any of the provisions of the Electoral Act 1993 or the Local Electoral Act 2001 or the Local Restoration Polls Act 1990 applies; or
(iii) an election or poll held simultaneously with and in the same premises as an election or poll referred to in subparagraph (i) or (ii); and
(b) the person is paid by the authority controlling the election or poll; and
(c) the person’s payment is exclusively for work done or services rendered immediately before, on, or immediately after the day on which the election or poll is held
election expiry date is defined in section HC 30(5) (Treatment of foreign trusts when settlor becomes resident) for the purposes of that section
electronic format means the format and the electronic means by which a return or particulars that are filed electronically are provided
emergency call is defined in section CX 34 (Meaning of emergency call)
emigrating company is defined in section FL 1(1) (What this subpart does)
employee—
(a) means a person who receives or is entitled to receive a PAYE income payment:
(b) in sections CW 17 (Expenditure on account, and reimbursement, of employees) and CW 18 (Allowance for additional transport costs) includes a person to whom section RD 3(2) to (4) (PAYE income payments) applies:
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(c) in the FBT rules, and in the definition of shareholder-employee (paragraph (b)), does not include a person if the only PAYE income payment received or receivable is—
(i) a payment referred to in section RD 5(1)(b)(iii), (2), (6)(b) and (c) and (7) (Salary or wages):
(ii) a schedular payment referred to in schedule 4 (Rates of tax for schedular payments) for which the person is liable for income tax under section BB 1 (Imposition of income tax):
(d) is defined in section DC 15 (Some definitions) for the purposes of sections DC 12 to DC 14 (which relate to share purchase schemes):
(e) for an employer, means an employee of the employer
employee share loan is defined in section CX 35 (Meaning of employee share loan)
employee’s superannuation accumulation means the total superannuation contributions, together with any return on them, to which the complying fund rules apply, and are—
(a) employer’s superannuation contributions vested in an employee:
(b) the amount of a tax credit under section MK 3 (Payment of tax credits) that is treated as a Crown contribution for an employee under section MK 5 (Crown contributions for members):
(c) withheld from the employee’s salary or wages
employer—
(a) means a person who pays or is liable to pay a PAYE income payment:
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(b) includes,—
(i) for an unincorporated body of persons other than a partnership, the manager or other principal officer:
(ii) for a partnership, each partner:
(iii) for the estate of a deceased person, a trust, a company in liquidation, an assigned estate, or for any other property vested or controlled in a fiduciary capacity, each person in whom the property has become vested or to whom control of the property has passed:
(iv) the Crown:
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(c) in the FBT rules, does not include a person if the only PAYE income payment that they pay or are liable to pay is—
(i) a payment referred to in section RD 5(1)(b)(iii), (2), (6)(b) and (c) and (7) (Salary or wages):
(ii) a schedular payment referred to in schedule 4 (Rates of tax for schedular payments):
(d) is defined in section RD 45(6) (Unclassified benefits) for the purposes of that section:
(e) for an employee, means the employer of the employee
employer monthly schedule means a form that an employer must provide to the Commissioner in manual format or in electronic format, or that a PAYE intermediary must provide to the Commissioner in electronic format, showing—
(a) the name and tax file number of the employer; and
(b) the name of every person who was an employee of the employer at any time during the period to which the employer monthly schedule relates; and
(c) if supplied to the employer, the tax file number of each employee to whom paragraph (b) refers; and
(d) the tax code of each employee to whom a PAYE income payment that is not an extra pay is made; and
(e) for each employee in the month to which the schedule relates, the amount of gross earnings, the total amount of tax withheld, and the amount of earnings not liable to the earner premium; and
(f) if applicable, particulars of child support and student loan deductions made; and
(g) for each employee in the month to which the schedule relates, if applicable, the amount of total KiwiSaver contribution deductions made under Part 3, subpart 1 of the KiwiSaver Act 2006; and
(h) for each employee in the month to which the schedule relates, if applicable, the amount of employer contributions made under the KiwiSaver Act 2006, net of any ESCT payable under the ESCT rules; and
(i) in the month in which an employee starts, the date on which they started to be an employee of the employer; and
(j) in the month in which an employee ceases, the date on which they ceased to be an employee of the employer; and
(k) the identity of each employee who received an extra pay at a rate less than the rate set out in schedule 2, part B, table 1, row 2 (Basic tax rates for PAYE income payments); and
(l) other particulars required by the Commissioner for a class of employer
employer-sourced superannuation savings means—
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(a) employer’s superannuation contributions made on or after 1 April 2000 other than—
(i) those that are treated as salary and wages under section RD 68 (Choosing to have amount treated as salary or wages); or
(ii) those on which ESCT has been paid at the rate set out in schedule 1, part A, clause 10(a) of the Income Tax Act 2004 before that clause was replaced by a new clause 10(a) on 1 April 2007; and
(b) any return on those employer’s superannuation contributions; and
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(c) reserves, that is, employer’s superannuation contributions made on or after 1 April 2000 that do not vest in a member of the superannuation fund and any return on the employer’s superannuation contributions, as follows:
(i) for a superannuation fund with 10 or more unassociated members, reserves that have been allocated to a member of the superannuation fund, other than those allocated to an account of the member’s contributions for smoothing investment returns; or
(ii) for all other superannuation funds, reserves
employer’s superannuation contribution is defined in section RD 65(1) (Employer’s superannuation contributions)
employing company is defined in section DC 15 (Some definitions) for the purposes of sections DC 12 to DC 14 (which relate to share purchase schemes)
employment has a meaning corresponding to the meaning of
employee, and—
(a) includes the activities performed by a member of Parliament or a judicial officer that give rise to an entitlement to receive a PAYE income payment for the activities:
(b) is defined in section ME 2(1) (Meaning of employment for this subpart) for the purposes of subpart ME (Family tax credit) and the definition of full-time earner
employment income means an amount that is income under section CE 1 (Amounts derived in connection with employment)
employment limitation is defined in section DA 2(4) (General limitations)
employment-related loan means a loan that is a fringe benefit
end date is defined in section RA 15(3) (Payment dates for interim and other tax payments) for the purposes of that section
engaged in full-time work is defined in section LC 5 (Meaning of engaged in full-time work) for the purposes of section LC 4 (Tax credits for transitional circumstances)
entitlement period is defined in section MC 11(1) (Relationship periods and entitlement periods) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
environmental restoration account is defined in section EK 23(3) (Other definitions) for the purposes of subpart EK (Environmental restoration accounts)
ESCT means employer’s superannuation contribution tax and refers to an amount payable as income tax under the ESCT rules
ESCT rate threshold amount, for an employer’s superannuation contribution, means—
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(a) for an employee employed by an employer for the whole of a tax year immediately before the tax year in which the employer’s superannuation contribution is paid, the total amount of—
(i) salary or wages derived by the employee in the previous tax year; and
(ii) the gross amount of employer’s superannuation contributions before ESCT is withheld that the employer paid on behalf of the employee in the previous tax year; or
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(b) if paragraph (a) does not apply, the total amount of
(i) salary or wages that the employer estimates will be derived by the employee in the tax year in which the contribution is paid; and
(ii) the gross amount of employer’s superannuation contributions before ESCT is withheld that the employer estimates that they will pay on behalf of the employee in the tax year in which the contribution is paid
ESCT rules means the provisions listed in section RD 64 (ESCT rules and their application)
established activity is defined in section IZ 1(12) (Use of specified activity net losses) for the purposes of that section
estate, for land,—
(a) means an estate in the land, whether legal or equitable, and whether vested or contingent, in possession, reversion, or remainder; and
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(b) includes a right, whether direct or through a trustee or otherwise, to—
(i) the possession of the land:
(ii) the receipt of the rents or profits from the land:
(iii) the proceeds of the disposal of the land; and
(c) does not include a mortgage
estimated residual market value,—
(a) for an item of depreciable property, is defined in section EE 67 (Other definitions):
(b) for high-priced livestock, means its market value at the end of its estimated useful life, estimated reasonably as at the date of acquisition and based upon an assumption of normal and reasonable maintenance over its estimated useful life
estimated useful life,—
(a) for an item of depreciable property, is defined in section EE 63 (Meaning of estimated useful life):
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(b) for high-priced livestock, means the period over which the livestock might reasonably be expected to be useful in deriving income or carrying on a business in New Zealand, taking into account—
(i) the passage of time, likely wear and tear, exhaustion, and obsolescence; and
(ii) an assumption of normal and reasonable maintenance:
(c) for a listed horticultural plant, means the period of time over which the listed horticultural plant might reasonably be expected to be useful to a person in deriving income or in carrying on a business in New Zealand, with the expectation based on an assumption of normal and reasonable maintenance:
(d) for a type of pasture, means the period of time over which the pasture might reasonably be expected to be useful to a person in deriving income or carrying on a farming or agricultural business on land in New Zealand
excepted financial arrangement—
(a) is defined in section EW 5 (What is an excepted financial arrangement?) for the purposes of this Act except the old financial arrangements rules; and
(b) is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
excess credit amount means an amount calculated under sections OC 29(5) and OD 22(5) (which relate to dividends with both imputation credit and FDP credits or CTR credits attached) for a dividend with a combined imputation and FDP ratio or a combined imputation and CTR ratio
excess debt entity is defined in section FE 4 (Some definitions) for the purposes of subpart FE (Interest apportionment on thin capitalisation)
excess expenditure—
(a) is defined in section CZ 8(2) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section:
(b) is defined in section DZ 5(6) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section
excess tax payment, for a company at a time, and for the purposes of Part O (Memorandum accounts), means the amount at the time by which a payment made by or on behalf of the company to the Commissioner for income tax or provisional tax is more than the liability at the time of the company to pay income tax and provisional tax
exchange variation is defined in section CZ 3(5) (Exchange variations on 8 August 1975) for the purposes of that section
excluded ancillary tax means—
(a) imputation penalty tax:
(b) FDP penalty tax:
(c) qualifying company election tax:
(d) FBT:
(e) withdrawal tax
excluded depreciable property is defined in section EE 64 (Meaning of excluded depreciable property)
excluded fixed rate security means a fixed rate share issued by a company or a debenture issued by a company, if it is a substituting debenture and not a profit-related debenture, when the holder of the share or debenture does not have, because of it, any right to vote or participate in any shareholder decision-making, except to the extent of any such right that—
(a) arises only in circumstances in which the position of the holder of the share or debenture may be altered to the holder’s detriment; and
(b) is granted to the holder of the share or debenture for the purpose of assisting the holder to prevent the alteration; and
(c) at the time of the issue of the share or debenture, is not expected to arise
excluded income is defined in section BD 1(3) (Income, exempt income, excluded income, non-residents’ foreign-sourced income, and assessable income)
excluded option means, for a company, an option to acquire or dispose of a share in the company if—
(a) the directors of the company did not know and could not reasonably be expected to know that the option had been granted; or
(b) neither the grantor of the option nor any person associated with the grantor of the option at the time the option is granted holds a share in the company over which the option is granted at the time the option is granted, whether directly or indirectly, but this paragraph does not apply in a case in which the grantor of the option is the company; or
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(c) the option is granted on arm’s length terms, without the grant having a purpose or effect of defeating the intent and application of any provision of this Act whose application is dependent on the measurement of voting and market value interests, and the holder of the option does not have, because of it, any right to vote or participate in any shareholder decision-making, except to the extent of any such right that—
(i) arises only in circumstances in which the position of the holder of the option in relation to it may be altered to the holder’s detriment; and
(ii) is granted to the holder of the option for the purpose of assisting the holder to prevent the alteration; and
(iii) at the time of the issue of the option, is not expected to arise; or
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(d) the price payable to acquire the share on the exercise of the option is equal to or not materially different from the market value of the share at the date of exercise, and the holder of the option does not have, because of it, any right to vote or participate in any shareholder decision-making, except to the extent of any such right that—
(i) arises only in circumstances in which the position of the holder of the option in relation to it may be altered to the holder’s detriment; and
(ii) is granted to the holder of the option for the purpose of assisting the holder to prevent the alteration; and
(iii) at the time of the issue of the option, is not expected to arise; or
(e) the share is an excluded fixed rate security, subject to section YC 20 (Credit account continuity provisions: excluded fixed rate securities) in the case of the credit amount continuity provisions; or
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(f) the option—
(i) relates to a pre-1991 budget security; and
(ii) was itself granted before 8.00 pm New Zealand Standard Time on 30 July 1991 (the specified time), or was granted under a binding contract entered into before the specified time no term of which is altered at any time after the specified time; and
(iii) is not an option any term of which is altered at any time after the specified time (whether under a provision for roll-over or extension or under an option held at the specified time by the option holder or the grantor of the option, or both, or any other person, or otherwise), except when the term is altered under a binding contract entered into before the specified time no term of which is altered at any time after the specified time
exempt income is defined in section BD 1(2) (Income, exempt income, excluded income, non-residents’ foreign-sourced income, and assessable income)
exempt income limitation is defined in section DA 2(3) (General limitations)
exempt interest means interest that is—
(a) payable for a debt entered into under generally accepted commercial practice for the purchase of goods or services, if the purchase is made in the ordinary course of the purchaser’s taxable activity; or
(b) payable under a hire purchase agreement, the definition of which applies, for this purpose, as if it did not contain paragraph (g); or
(c) exempt income under section CW 8 (Money lent to government of New Zealand) or CW 64 (Exemption under other Acts); or
(d) payable under a specified lease or a finance lease; or
(e) payable for bonus bonds or Post Office bonus bonds (as each of those terms is defined in section 2 of the Post Office Bank Act 1987); or
(f) payable on an overpaid levy under section 173 of the Injury Prevention, Rehabilitation, and Compensation Act 2001; or
(g) payable by the Commissioner under section 84 of the KiwiSaver Act 2006
exemption certificate means a certificate provided by the Commissioner under section 24M of the Tax Administration Act 1994
existing farmer is defined in section IZ 1(12) (Use of specified activity net losses) for the purposes of that section
existing privilege is defined in section 106 of the Crown Minerals Act 1991, and includes mining privilege and mining licence under the Mining Act 1971 and prospecting licence or mining licence under the Petroleum Act 1937
expenditure—
(a) is defined in section DD 2(7) (Limitation rule) for the purposes of that section:
(b) is defined in section DW 1(2) (Airport operators) for the purposes of that section
expenditure on account of an employee is defined in section CE 5 (Meaning of expenditure on account of an employee)
exploration and development activities is defined in section CW 57(2) (Non-resident company involved in exploration and development activities) for the purposes of that section
exploration permit is defined in section 2 of the Crown Minerals Act 1991
exploratory material means anything acquired with exploratory well expenditure or prospecting expenditure
exploratory well means a well in a permit area, drilled for the purpose of—
(a) locating petroleum; or
(b) confirming the existence, non-existence, quantity, or composition of petroleum; or
(c) ascertaining whether petroleum is recoverable in commercial quantities
exploratory well expenditure—
(a) means expenditure incurred by a petroleum miner in planning, drilling, testing, completing, and abandoning an exploratory well; and
(b) does not include residual expenditure
extended return date is defined in section IC 9(3) (Date for payment and notice to Commissioner) for the purposes of Part I (Treatment of tax losses)
extra pay is defined in section RD 7 (Extra pay)
fair dividend rate method means the method of calculating FIF income or FIF loss under section EX 52 (Fair dividend rate method: usual method)
family assistance credit is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
family credit abatement is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
family plus is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
family scheme is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
family scheme income is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
family support is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
family tax credit is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
farmer is defined in section EH 3(1)(a) (Persons to whom main income equalisation scheme applies) for the purposes of the main income equalisation scheme
farm-in expenditure means expenditure that a farm-in party under a farm-out arrangement agrees that they will incur
farm-out arrangement—
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(a) means an arrangement between a petroleum miner (the farm-out party) and a person (the farm-in party) under which the farm-in party agrees that they will incur expenditure in doing work or paying for work done in or for the permit area of the farm-out party’s petroleum permit, after the arrangement is made, and, in return, they—
(i) acquire an interest in the farm-out party’s petroleum permit; or
(ii) receive a right or option to acquire an interest in the farm-out party’s petroleum permit; or
(iii) become entitled in another way to acquire an interest in the farm-out party’s petroleum permit; or
(iv) become entitled to a direct or indirect interest in petroleum from the permit area of the farm-out party’s petroleum permit; or
(v) become entitled to a direct or indirect interest in the profits, however measured, from petroleum from the permit area of the farm-out party’s petroleum permit; or
(vi) become entitled to a direct or indirect right to reimbursement from petroleum from the permit area of the farm-out party’s petroleum permit; or
(vii) become entitled to a direct or indirect right to reimbursement from the profits, however measured, from petroleum from the permit area of the farm-out party’s petroleum permit; or
(viii) become entitled to a rental, royalty, or other consideration of whatever nature calculated by reference to petroleum from the permit area of the farm-out party’s petroleum permit; or
(ix) become entitled to a rental, royalty, or other consideration of whatever nature calculated by reference to the profits, however measured, from petroleum from the permit area of the farm-out party’s petroleum permit:
(b) is defined in section CZ 8(2) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section:
(c) is defined in section DZ 5(6) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section
FBT has the same meaning as fringe benefit tax
FBT rules means the provisions listed in section RD 25 (FBT rules and their application), and fringe benefit tax rules has the same meaning
FDP means foreign dividend payment and refers to an amount payable under the FDP rules to the Commissioner in relation to a foreign dividend
FDP account means a memorandum account referred to in section OA 2(1)(b) (Memorandum accounts)
FDP credit is a credit referred to in section OA 5(3) (Credits)
FDP debit is a debit referred to in section OA 6(3) (Debits)
FDP penalty tax means tax payable under section 140C of the Tax Administration Act 1994
FDP ratio means the ratio set out in section OC 27 (FDP credits attached to dividends)
FDP reference period is defined in section OC 35(2) (Meaning of FDP reference period) for the purposes of sections OC 23, and OC 36 to OC 39 (which relate to FDP credits and debits)
FDP rules means the provisions listed in section RG 1 (FDP rules and their application)
FDPA means foreign dividend payment account
FDPA company means a company that chooses under sections OC 1(1) and OC 3 (which relate to companies with FDP accounts) to maintain an FDP account
feature film means a film that—
(a) is produced mainly for exhibition in a cinema; and
(b) is exhibited in 35mm gauge; and
(c) has a continuous running time of no less than 75 minutes
fee is defined in section RD 41(4) (Services) for the purposes of that section
FIF means a foreign investment fund as defined in section EX 28 (Meaning of FIF)
FIF income is defined in section CQ 5 (When FIF income arises)
FIF loss is defined in section DN 6 (When FIF loss arises)
FIF net loss, for a person and for an income year in which the person has a FIF loss, means the part of the FIF loss for which the person is denied a deduction because of section DN 8 (Ring-fencing cap on deduction: branch equivalent method), but must instead deal with under Part I (Treatment of tax losses)
FIF rules means sections EX 28 to EX 72 (which relate to foreign investment funds)
fifteen percent capital reduction is defined in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section
fifteen percent interest reduction is defined in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section
filing taxpayer means a person, other than—
(a) a person who is a non-filing taxpayer for the applicable tax year:
(b) a person that is an unincorporated body of persons, if section 42 of the Tax Administration Act 1994 applies to require the members of the body to file separate returns of income for the applicable tax year
film, except in section CC 9 (Royalties),—
(a) means a recording on any medium from which a moving image may by any means be produced; and
(b) includes a part of any such recording
film income means income of a person under section CC 10 (Films)
film production expenditure—
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(a) means—
(i) an expenditure or loss incurred in producing a film:
(ii) an amount of depreciation loss on property used in producing the film:
(iii) an amount of depreciation loss from disposing of depreciable property used in producing the film allowed under section EE 48 (Effect of disposal or event); and
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(b) does not include an expenditure incurred—
(i) in acquiring an asset for which a deduction for an amount of depreciation loss is allowed:
(ii) in acquiring a film right after the film is completed:
(iii) directly in marketing or selling a film
film reimbursement scheme is defined in section DS 4 (Meaning of film reimbursement scheme)
film right means a right or interest, including a future or contingent right or interest, of any of the following kinds
(a) copyright in a film; or
(b) a licence relating to the copyright in a film; or
(c) an equitable right in the copyright in a film; or
(d) an equitable right in a licence relating to the copyright in a film; or
(e) any other right existing in or attaching to a film; or
(f) a right to income, or a share of income, from the rental, sale, use, or other exploitation of a film
final instalment, in relation to provisional tax, means the last instalment of provisional tax due in a transitional year
finance lease means a lease of a personal property lease asset entered into by a person on or after 20 May 1999 that—
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(a) when the person enters the lease, involves or is part of an arrangement that involves—
(i) the transfer of the ownership of the asset to the lessee or an associate of the lessee during or at the end of the term of the lease:
(ii) the lessee or an associate of the lessee having the option of acquiring the asset for an amount that is likely to be substantially lower than the asset’s market value on the date of acquisition:
(iii) a right of an associate of the lessee to acquire the asset, or a right of the lessor to require an associate of the lessee to acquire the asset, during the term of the lease under an arrangement that does not entitle the associate to receive all of the personal property lease payments that may fall due after the acquisition:
(b) when the person enters the lease or from a later time, involves a term of the lease that is more than 75% of the asset’s estimated useful life as defined in section EE 63 (Meaning of estimated useful life)
finance-related deduction means a deduction of a company that is part of a consolidated group, calculated as if the company were not part of the group and determined under section FM 3 (Liability of consolidated groups and group companies) for an amount, other than an amount that arises only from movement in currency exchange rates, of—
(a) interest incurred:
(b) expenditure under the financial arrangements rules or the old financial arrangements rules
financial arrangement—
(a) is defined in section EW 3 (What is a financial arrangement?) for the purposes of this Act except the old financial arrangements rules; and
(b) is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
financial arrangements rules is defined in section EW 1(2) (What this subpart does)
financial assistance is defined in section HC 36(5) (Trusts and minor beneficiary rule) for the purposes of that section
financial statements, in subpart EB (Valuation of trading stock (including dealer’s livestock)) and sections EG 3 (Allocation of income and deductions by portfolio tax rate entity) and OB 40 (ICA attribution for personal services), is defined in section 8 of the Financial Reporting Act 1993, but the references in the definition to an entity and to a reporting entity are to be read as references to a person
financial value is defined in section FE 20(1) (Financial value and regulatory value) for the purposes of sections FE 7, FE 19, and FE 21 to FE 23 (which relate to a New Zealand banking group’s equity threshold)
financially independent means—
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(a) in full employment—
(i) under a contract of service or apprenticeship that requires a person to work, whether on time or piece rates, no less than an average of 30 hours each week; or
(ii) as the self-employment of a person in a business, manufacture, profession, trade, or undertaking carried on for pecuniary profit for not less than an average of 30 hours each week; or
(iii) for any number of hours that is regarded as full-time employment for the purpose of an agreement, award, or contract relating to the employment; or
(b) in receipt of a basic grant or an independent circumstances grant under the Student Allowances Regulations 1998 (SR 1998/277) or any regulations in substitution for those regulations; or
(c) in receipt of payments under a Government-assisted scheme that the chief executive of the administering department considers analogous to a benefit payable under Part 1 of the Social Security Act 1964; or
(d) in receipt of a benefit, as defined in section 3 of the Social Security Act 1964, payable under Part 1 of the Act
first business day, in relation to provisional tax, means—
(a) the first day in an income year on which a person with a provisional tax liability derives income or incurs expenditure as a result of carrying on a taxable activity, if the person is not a natural person; and
(b) the day following the last day in an income year on which a person with a provisional tax liability derived income from employment, if the person is a natural person
first payment period means the period starting on the 1st day of a month and ending with the 15th day of the month
first publication is defined in section EI 3(6) (Assigning or granting copyright) for the purposes of that section
first tracking date is defined in section LL 9 (Some definitions) for the purposes of subpart LL (Underlying foreign tax credits (UFTC))
fisher is defined in section EH 3(1)(b) (Persons to whom main income equalisation scheme applies)
fishing boat is defined in section EJ 2(6) (Spreading forward of deductions for repairs to fishing boats) for the purposes of that section
fishing business—
(a) is defined in section EH 36 (Other definitions) for the purposes of this Act except the provision to which paragraph (b) refers:
(b) is defined in section EJ 2(6) (Spreading forward of deductions for repairs to fishing boats) for the purposes of that section
fixed establishment—
(a) means a fixed place of business in which substantial business is carried on by a person; and
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(b) includes—
(i) a branch, factory, shop, or workshop in which, in each case, substantial business is carried on; and
(ii) a mine, oil well, quarry, or other place of natural resources subject to exploitation; and
(iii) an agricultural, forestry, or pastoral property; and
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(c) does not include—
(i) the use of facilities solely for the purpose of the delivery, display, or storage of goods or merchandise belonging to a business; or
(ii) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or for collecting information or for advertising for business
fixed life intangible property is defined in section EE 67 (Other definitions)
fixed principal financial arrangement—
(a) means a financial arrangement other than a variable principal debt instrument:
(b) is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
fixed-rate share,—
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(a) in sections CD 22 (Returns of capital: off-market share cancellations), GC 8, and GC 14 (which relate to transfer pricing arrangements between associated persons), and in the definitions of excluded fixed rate security and pre-1991 budget security, means a share issued by a company if the only dividend payable on the share, disregarding any dividend payable on the issue of the share, and any imputation credits or FDP credits attached to any dividend, is payable at a rate that—
(i) is described in paragraph (b), (c), or (d); and
(ii) is not set with a purpose and does not have an effect of defeating the intent and application of any provision of this Act whose application is dependent on the measurement of voting and market value interests:
(b) for the purposes of paragraph (a)(i), the rate is a specific fixed percentage of the amount subscribed for the issue of the share:
(c) for the purposes of paragraph (a)(i), the rate is a percentage of the amount subscribed for the issue of the share that is determined by a fixed relationship to commodity, economic, financial, or industrial indices, or to banking rates or general commercial rates of interest:
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(d) for the purposes of paragraph (a)(i), the rate is a percentage that could be of a kind referred to in paragraph (b) or (c) but for any variation in the rate of dividend that may occur only—
(i) by a fixed relationship to a rate of income tax; or
(ii) as may be necessary to compensate the shareholder for a default on the part of the paying company or expenditure or loss suffered by the shareholder, or a person associated with the shareholder, through holding the share; or
(iii) by a combination of the factors in subparagraphs (i) and (ii):
(e) is defined in section LL 9 (Some definitions) for the purposes of subpart LL (Underlying foreign tax credits (UFTC)) and sections EX 46 (Limits on choice of calculation methods) and FE 21 (Banking group’s New Zealand net equity)
flat-owning company is defined in section CD 31(2) (Flat-owning companies) for the purposes of that section and section HA 6 (Corporate requirements)
foreign attributed income means a company’s income for the income year that is—
(a) attributed CFC income:
(b) FIF income calculated under the accounting profits method or the branch equivalent method
foreign attributed loss offsets means all deductions or offsets a company is allowed in the income year that are—
(a) attributed CFC losses:
(b) FIF losses calculated under the accounting profits method or the branch equivalent method:
(c) attributed CFC net losses:
(d) FIF net losses calculated under the accounting profits method or the branch equivalent method
foreign company means a company that—
(a) is not resident in New Zealand; or
(b) is treated under a double tax agreement as not being resident in New Zealand
foreign country is defined in section DB 45(4) (Bribes paid to public officials) for the purposes of that section
foreign dividend is defined in section RG 2(1) (Foreign dividends)
foreign dividend company is defined in section LL 9 (Some definitions) for the purposes of subpart LL (Underlying foreign tax credits (UFTC))
foreign dividend company net earnings is defined in section LL 5(1) (Meaning of foreign dividend company net earnings)
foreign exempt entity is defined in section CW 12(4) (Proceeds of share disposal by qualifying foreign equity investor) for the purposes of that section
foreign exempt partnership is defined in section CW 12(4) (Proceeds of share disposal by qualifying foreign equity investor) for the purposes of that section
foreign exempt person is defined in section CW 12(4) (Proceeds of share disposal by qualifying foreign equity investor) for the purposes of that section
foreign expenditure is defined in section EG 1(10) (Election to use balance date used in foreign country) for the purposes of that section
foreign group, for a company, means the foreign attributed interest group identified under section FF 8 (Identifying members of foreign groups) for the purposes of subpart FF (Interest apportionment for conduit investment)
foreign income tax is defined in section LJ 3 (Meaning of foreign income tax) for the purposes of Part L (Tax credits and other credits)
foreign investment fund is defined in section EX 28 (Meaning of FIF)
foreign investment vehicle means an entity that—
(a) has become a foreign investment vehicle under section HL 5(1) (Foreign investment vehicles); and
(b) has not ceased to be a foreign investment vehicle under section HL 5(2)
foreign non-dividend income means income that is—
(a) not derived from New Zealand; and
(b) not dividends
foreign public official is defined in section DB 45(4) (Bribes paid to public officials) for the purposes of that section
foreign source income is defined in section EG 1(10) (Election to use balance date used in foreign country) for the purposes of that section
foreign-sourced amount means an amount of income that is not treated as having a source in New Zealand under sections YD 4 (Classes of income treated as having New Zealand source) and YZ 1 (Source rule for interest)
foreign superannuation scheme means a superannuation scheme constituted outside New Zealand
foreign tax, in subpart LJ (Tax credits for foreign income tax), means tax, other than New Zealand tax, that is the subject of a double tax agreement
foreign trust is defined in section HC 11 (Foreign trusts)
foreign withholding tax means a tax, other than a New Zealand tax, that—
(a) is withheld from an amount of income; and
(b) is of substantially the same nature as NRWT
forester is defined in section EH 3(1)(c) (Persons to whom main income equalisation scheme applies)
forestry assets is defined in section FC 6 (Forestry assets transferred to close relatives) for the purpose of that section
forestry company means a company that is incorporated, under an agreement between the Crown, the Maori owners, and a holding company of the company, for the purposes of—
(a) buying land partly from the Crown, partly from the Maori owners, and partly from a holding company of the company; and
(b) carrying on a forestry business on the land
forward contract,—
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(a) in the financial arrangements rules, means—
(i) an agreement that is a conditional or an unconditional agreement to acquire or dispose of property, or obtain or supply services, if the agreement can be settled without the property being delivered or the services being performed:
(ii) an agreement that is a conditional or an unconditional agreement to acquire or dispose of foreign exchange or a financial arrangement:
(b) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
friendly society means a society or credit union or association of credit unions registered or treated as registered under the Friendly Societies and Credit Unions Act 1982
fringe benefit is defined in section CX 2 (Meaning of fringe benefit)
fringe benefit tax means fringe benefit tax payable under section RD 26 (Liability for FBT), and FBT has the same meaning
fringe benefit tax rules means the provisions listed in section RD 25 (FBT rules and their application) and FBT rules has the same meaning
full reinsurance is defined in section EY 12(2) (Meaning of life reinsurance)
full-time earner is defined in section MA 7 (Meaning of full-time earner for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
fully credited is defined in section CD 43(26) (Available subscribed capital (ASC) amount) for the purposes of that section
fully credited for conduit tax relief means the part of a dividend calculated using the formula in section RF 9(6) (When dividends fully imputed or fully credited)
fund provider, for a person and a KiwiSaver scheme or a complying superannuation fund of which they are a member, means the trustees of the scheme or fund
further FDP means an amount that a company may be liable to pay under sections OC 30 to OC 34 (which relate to further FDP payable by companies)
further income tax means an amount of tax by way of further income tax that a company may be liable to pay under—
(a) sections OB 65 to OB 70 (which relate to further tax payable by a company for a closing debit balance, or when the company stops being an ICA company):
(b) sections OK 21 or OK 22 (which relate to further tax payable by a Maori authority for a closing debit balance, or when it stops being a Maori authority)
futures contract means a forward contract traded on a recognised futures exchange
gaming-machine gambling means class 4 gambling, as defined in section 30 of the Gambling Act 2003, that utilises or involves a gaming machine
gaming-machine operator’s licence means a class 4 operator’s licence as defined in section 4 of the Gambling Act 2003
gaming-machine venue licence means a class 4 venue licence as defined in section 4 of the Gambling Act 2003
general insurance means insurance that is not life insurance
general limitation means a rule described in any of section DA 2(1) to (6) (General limitations)
general permission is defined in section DA 1(1) (General permission)
general power of appointment—
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(a) includes a power or authority that—
(i) is conferred by will or conferred by a settlement during life or created in any other manner; and
(ii) is exercisable orally or by instrument made during life or by will or by any other means; and
(iii) enables its holder, or would enable its holder if they were of full capacity, to obtain or appoint or dispose of any property, or to charge any sum or money on any property, as the holder thinks fit for their own benefit; and
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(b) does not include a power or authority—
(i) exercisable by a person in a fiduciary capacity under a disposition not made by them; or
(ii) exercisable as a mortgagee
generally accepted accounting practice is defined in section 3 of the Financial Reporting Act 1993
geothermal energy proving period means, for a person’s geothermal well that is not used to exploit geothermal energy, a period—
(a) starting with the completion or acquisition of the well; and
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(b) other than the case of the person disposing of the well to another person, ending when the well for the foreseeable future is not intended, and cannot reasonably be expected, to be used or available for use in—
(i) deriving assessable income:
(ii) carrying on a business for the purposes of deriving assessable income
geothermal well means a bore or well solely for the purpose of investigating or exploiting geothermal energy in New Zealand
goods, in sections CX 1 (Goods and services tax), DB 2 (Goods and services tax), and EA 3 (Prepayments), and in the definition of services, is defined in section 2 of the Goods and Services Tax Act 1985
government stock is defined in section DZ 11(3) (Film reimbursement scheme on or before 30 June 2001) for the purposes of that section
Government Superannuation Fund means the fund established under the Government Superannuation Fund Act 1956
grandparented consolidated company, for a company that is part of a consolidated group and for an income year (the current income year), means a company that before 17 May 2006 chose to form or join the consolidated group, when—
(a) the current income year is the 2005–06 or 2006–07 income year:
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(b) the company carries on a business, and the total amount of the company’s finance-related deductions allocated to the income year before the current income year (the previous income year) is—
(i) zero, because no deductions are allocated to the previous income year; or
(ii) less than 50% of the company’s total deductions allocated to the previous income year, calculated as if the company were not part of the group and determined under section FM 3 (Liability of consolidated groups and group companies)
grant-related suspensory loan means a loan—
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(a) that—
(i) is made by a public authority; and
(ii) is not a loan of the kind described in section CF 2(1) (Remission of specified suspensory loans); and
(iii) includes the term that the liability of the borrower may be wholly or partly remitted; or
(b) that is made by the Rural Banking and Finance Corporation of New Zealand as an irrigation suspensory loan and designated as such; or
(c) that is made by the Rural Banking and Finance Corporation of New Zealand as a West Coast drainage suspensory loan and designated as such
grey list means the list of countries in schedule 24, part A (International tax rules: grey list countries)
grey list company means a company that is treated as resident in a country or territory listed in schedule 24, part A (International tax rules: grey list countries)
grey list dividend is defined in section LL 3 (Meaning of grey list dividend)
gross, for an amount, means without any deduction from the amount
gross gambling proceeds means gross proceeds, as defined in regulation 3(1) of the Gambling (Class 4 New Proceeds) Regulations 2004, plus prizes
group funding debt means the amount calculated under section FE 23 (Banking group’s funding debt)
group investment fund means a group investment fund established under the—
(a) Public Trust Act 2001 ; or
(b) Trustee Companies Act 1967 ; or
(c) Public Trust Office Act 1957
group of companies is defined in section IC 3(1) (Common ownership: group of companies)
group of persons includes 1 person
GST means goods and services tax under the Goods and Services Tax Act 1985
GST charged means GST charged under section 8(1) of the Goods and Services Tax Act 1985
GST payable in sections CX 1 (Goods and services tax), DB 2 (Goods and services tax), and DB 3(3) (Determining tax liabilities), has the same meaning as tax payable in section 2 of the Goods and Services Tax Act 1985, but does not include interest payable under Part 7 of the Tax Administration Act 1994
GST ratio is defined in section RC 8(2) (GST ratio method)
guaranteed residual value means an amount to which both the following apply
(a) it is equal to the value of a personal property lease asset as agreed in the lease by the lessor and the lessee; and
(b) its receipt by the lessor, on the expiry of the term of the lease, is assured or guaranteed by the lessee
guardian is defined in section HC 36(5) (Trusts and minor beneficiary rule) for the purposes of that section
herd livestock means a type of specified livestock that a person—
(a) chooses to value under the herd scheme; and
(b) values for an income year under sections EC 14 to EC 21 (which relate to the herd scheme)
herd scheme—
(a) means the livestock valuation method described in sections EC 14 to EC 21 (which relate to the herd scheme); and
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(b) includes the livestock valuation method set out in—
(i) sections EC 14 to EC 21 of the Income Tax Act 2004; and
(ii) sections EL 5 and EL 6 of the Income Tax Act 1994; and
(iii) section 86A of the Income Tax Act 1976 as in force before its repeal by section 21 of the Income Tax Amendment Act (No 2) 1993; and
(iv) section 86D of the Income Tax Act 1976
herd value means, for an animal that is herd livestock and for an income year, the national average market value of the livestock declared for the income year
herd value ratio means—
(a) the ratio calculated or recalculated under section EC 17 (Herd value ratio) or EC 18 (Inaccurate herd value ratio) for herd livestock other than livestock on the Chatham Islands:
(b) the adjustment set by the Commissioner under section EC 19 (Chatham Islands adjustment to herd value) for herd livestock on the Chatham Islands
higher credit value—
(a) is defined in section GB 35(4) (Imputation arrangements to obtain tax advantage) for the purposes of that section:
(b) is defined in section GB 42(4) (Maori authority credit arrangements to obtain tax advantage) for the purposes of that section
high-priced livestock means an animal of a type set out in schedule 17, column 1 (Types and classes of livestock) to which both the following apply
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(a) a person buys it for a purchase price that is at least—
(i) $500; and
(ii) 5 times the national average market value, in the income year of purchase or in the previous income year, whichever is greater, for the class in schedule 17, column 2 in which the livestock is able to be classified at the end of the income year of purchase; and
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(b) at the time the person buys it,—
(i) it is capable of being used for breeding; or
(ii) it is expected to be capable of being used for breeding when it reaches maturity
hire purchase agreement—
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(a) means—
(i) an agreement under which goods are let or hired with an option to purchase, however the agreement describes the payments, under which the person who agrees to purchase the goods is given possession of them before the total amount payable has been paid:
(ii) an agreement for the purchase of goods by instalment payments, however the agreement describes the payments, under which the person who agrees to purchase the goods is given possession of them before the total amount payable has been paid; and
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(b) includes an agreement to sell goods at retail under which—
(i) the buyer grants security over the goods to the seller for some or all of the purchase price; and
(ii) the property in the goods passes to the buyer subject to the security, in which case the agreement is a hire purchase agreement made at the time the sale is made; and
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(c) includes a sale and loan arrangement under which—
(i) a person lends money on the security of goods that have been bought or are to be bought at retail if some or all of the purchase price is paid out of the proceeds of the loan; and
(ii) the loan is made by the seller or by a third party, arranged by the seller, who is engaged in the business of lending money or who habitually lends money in the course of the third party’s business, in which case the arrangement is a hire purchase agreement made at the time the loan is made; and
(d) does not include an agreement under which property in the goods passes absolutely to the person who agrees to purchase them at the time of the agreement or on or at any time before delivery of the goods, unless the agreement is of a kind described in paragraph (a) or (b); and
(e) does not include an agreement made otherwise than at retail; and
(f) does not include an agreement to the extent to which the property that is the subject of the agreement is livestock or bloodstock
hire purchase asset means the personal property that is the subject of a hire purchase agreement
hire purchase payment means a payment made under a hire purchase agreement
holder is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
holding company,—
(a) for a forestry company, means a company that has the forestry company under its control:
(b) for a mining company, is defined in section CU 29 (Other definitions)
home is defined in section LC 8 (Some definitions) for the purposes of section LC 7 (Meaning of housekeeper)
home ownership requirements means home ownership requirements as defined in the Home Ownership Savings Act 1974
home vendor mortgage is defined in section LZ 8 (Meaning of home vendor mortgage) for the purposes of sections LZ 6 and LZ 7 (which relate to credits for interest on home vendor mortgages)
household member is defined in section LC 8 (Some definitions) for the purposes of section LC 7 (Meaning of housekeeper)
housekeeper is defined in section LC 7 (Meaning of housekeeper) for the purposes of section LC 6 (Tax credits for housekeeping)
housekeeping payments is defined in section LC 8 (Some definitions) for the purposes of section LC 6 (Tax credits for housekeeping)
ICA means imputation credit account
ICA company means a company referred to in section OB 1(1) (General rules for companies with imputation credit accounts)
identical goods, for the purposes of the FBT rules, for any goods, means other goods that are the same in terms of physical characteristics, quality, and reputation, except for minor differences in appearance that do not affect the value of the goods
identical share means a share that confers the same rights and imposes the same obligations on a holder as an original share
implementation date is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
improvement, for an item of depreciable property, is defined in section EE 67 (Other definitions)
improvements, in sections CB 7 (Disposal: land acquired for purposes of business relating to land) and CB 11 (Disposal within 10 years of improvement: building business), means improvements to land that—
(a) are not minor; and
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(b) are made—
(i) by a person erecting a building or otherwise; or
(ii) by an associated person erecting a building or otherwise
imputation additional tax means an amount of tax arising under section OB 71 (Imputation additional tax on leaving wholly-owned group) or OB 72 (Imputation additional tax on joining wholly-owned group)
imputation credit—
(a) means a credit referred to in section OA 5(2) (Credits):
(b) is further defined in section CD 16(4) (Certain dividends not increased by tax credits) for the purposes of that section:
(c) is further defined in section CD 17(4) (Credit transfer notice) for the purposes of that section
imputation credit account means the account referred to in section OA 2(1)(a) (Memorandum accounts)
imputation debit means a debit referred to in section OA 6(2) (Debits)
imputation group means, at a time, an imputation group formed under section FN 7 (Forming imputation groups)
imputation penalty tax means tax payable under section 140B of the Tax Administration Act 1994
imputation ratio means the ratio set out in section OB 60(3) (Imputation credits attached to dividends)
imputation rules means the provisions listed in section FN 2 (Imputation rules)
income, for a person, means income of the person under section BD 1(1) (Income, exempt income, excluded income, non-residents’ foreign-sourced income, and assessable income)
income derived from New Zealand means income that has a source in New Zealand described in sections YD 4 (Classes of income treated as having New Zealand source) and YZ 1 (Source rule for interest)
income from employment—
(a) means salary or wages or an extra pay:
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(b) in sections DA 2(4) (General limitations) and DE 1 (What this subpart does), excludes payments referred to in section RD 5(1)(b)(iii) (Salary or wages) to the extent to which those payments are made to 1 of the following:
(i) a self-employed person, as defined in section 2 of that Act, under the Accident Compensation Act 1982; or
(ii) an earner in relation to compensation for loss of earnings other than as an employee, as defined under regulations made under section 167 of that Act, under the Accident Rehabilitation and Compensation Insurance Act 1992; or
(iii) a self-employed person, as defined in section 13 of that Act, under the Accident Insurance Act 1998, for compensation paid under schedule 1, part 2, clause 7 of that Act; or
(iv) a self-employed person, as defined in section 6 of the Act, under the Injury Prevention, Rehabilitation, and Compensation Act 2001, for compensation paid under schedule 1, part 2, clause 32 of that Act:
(c) in sections DA 2(4) and DE 1, includes salary, wages, or other income to which section RD 3(2) to (4) (PAYE income payments) applies
income from forestry is defined in section EH 34 (Meaning of income from forestry)
income from mining is defined in section CU 21 (Meaning of income from mining)
income from personal exertion is defined in section IZ 1(12) (Use of specified activity net losses) for the purposes of that section
income interest,—
(a) for a foreign company, is defined in sections EX 8 to EX 13 (which relate to the calculation of a person’s income interest):
income statement means a statement issued by the Commissioner to a natural person that contains the information required by section 80E of the Tax Administration Act 1994
income tax means income tax imposed under section BB 1 (Imposition of income tax) except to the extent to which it has a different meaning under section YA 2 (Meaning of income tax varied)
income tax liability—
-
(a) means, for a person,—
(i) an income tax liability for the person and a tax year calculated under subpart BC (Calculating and satisfying income tax liabilities), if subparagraph (ii) does not apply; or
(ii) income tax for the person and a tax year calculated under subpart HL (Portfolio investment entities), if the person is a portfolio tax rate entity; and
(b) in sections EF 5 (Use of money interest payable by person) and EF 6 (Different tax years), includes circumstances in which a person has no tax to pay or is entitled to a refund of tax
income year means,—
(a) for a person who has elected, under section 38 of the Tax Administration Act 1994 and with the Commissioner’s consent, to have a period not ending on 31 March, the elected period (which may be less than a year in some cases):
(b) for any other person, the tax year
income-tested benefit means any of the following benefits paid or payable under the Social Security Act 1964
(a) domestic purposes benefit:
(b) emergency benefit:
(c) independent youth benefit:
(d) invalids’ benefit:
(e) sickness benefit:
(f) unemployment benefit:
(g) widows’ benefit
increase in savings is defined in section LZ 12 (Meaning of increase in savings) for the purposes of sections LZ 9 to LZ 11 (which relate to credits for savings in special accounts)
indirect income interest is defined in section EX 10 (Indirect income interests)
initial period is defined in section FZ 3(4) (Income of lessor under specified lease) for the purposes of that section
initial provisional tax liability, means—
(a) for a person who is not a natural person, or a person who is a natural person and a trustee of a trust, a provisional tax liability for a tax year in which the person starts to derive income from a taxable activity, when they did not derive income from a taxable activity in any of the 4 previous tax years; and
-
(b) for a person who is a natural person and not a trustee of a trust, a provisional tax liability for a tax year when—
(i) they did not have residual income tax of more than $2,500 in any of the 4 previous tax years; and
(ii) they have residual income tax of $35,000 or more in the tax year; and
(iii) in the tax year, they stopped deriving income from employment and then started to derive income from a taxable activity
initial treatment is defined in section CU 29 (Other definitions)
Inland Revenue Acts means the Acts listed in the schedule of the Tax Administration Act 1994
input tax—
(a) is defined in section 3A of the Goods and Services Tax Act 1985; and
(b) includes, for a supply, GST levied on goods entered for home consumption under the Customs and Excise Act 1996
instalment, in sections FZ 2 to FZ 4 (which relate to specified leases), and in the definitions of instalment period and outstanding balance, means an amount payable by a lessee, under a lease, by way of—
(a) repayment of some or all of a loan that a lessor is treated as having advanced under section FZ 2(2) (Effect of specified lease on lessor and lessee); or
(b) payment of interest; or
(c) both
instalment date means a date for payment of provisional tax for a tax year that is the day and month specified for a person with a provisional tax liability in schedule 3, part A (Payment of provisional tax and terminal tax)
instalment period is defined in section FZ 3(4) (Income of lessor under specified lease) for the purposes of that section
institution is defined in section LC 8 (Some definitions) for the purposes of section LC 7 (Meaning of housekeeper)
insurance,—
(a) in section CR 3 (Income of non-resident general insurer) means insurance of a kind described in section CR 3(3):
(b) in section YD 8 (Apportionment of premiums derived by non-resident general insurers) means insurance of a kind described in section YD 8(4)(a)
insurance contract includes a cover note and a renewal of an insurance contract
insured person, in sections CR 3, HD 16, and YD 8 (which relate to non-resident general insurers),—
(a) in relation to general insurance as described in sections CR 3(3)(a) and YD 8(4)(a), means a person who is liable to pay a premium to an insurer for the insurance and is entitled by the payment of the premium to make a claim against the insurer:
(b) in relation to a guarantee against risk as described in sections CR 3(3)(b) and (c) and YD 8(4)(b) and (c), means a person who is liable to pay a premium to an insurer for the guarantee, whether or not the payment of the premium entitles the person to make a claim against the insurer
insurer—
(a) means a person who assumes liability under a contract of insurance:
-
(b) in sections CR 3, DW 3, HD 16, HD 17, and YD 8 (which relate to non-resident general insurers),—
(i) in relation to general insurance as described in sections CR 3(3)(a) and YD 8(4)(a), means a person who provides the insurance and to whom an insured person is liable to pay a premium:
(ii) in relation to a guarantee against risk as described in sections CR 3(3)(b) and (c) and YD 8(4)(b) and (c), means a person who provides the guarantee and to whom an insured person is liable to pay a premium
interest,—
-
(a) for a person’s income,—
(i) means a payment made to the person by another person for money lent to any person, whether or not the payment is periodical and however it is described or calculated; and
(ii) does not include a redemption payment; and
(iii) does not include a repayment of money lent:
(b) for the RWT rules and the NRWT rules, includes a redemption payment:
-
(c) in sections DB 6 (Interest: not capital expenditure), DB 7 (Interest: most companies need no nexus with income), and DB 8 (Interest: money borrowed to acquire shares in group companies),—
(i) includes expenditure incurred under the financial arrangements rules or the old financial arrangements rules; and
(ii) does not include interest to which section DB 1(1)(e) (Taxes, other than GST, and penalties) applies:
(d) for land, has the same meaning as estate
interest instalment date means an instalment date—
(a) on which an instalment of provisional tax is due and payable under section RC 9 (Provisional tax payable in instalments); and
(b) after which, except in a case to which section 120KC(1) of the Tax Administration Act 1994 applies, an instalment amount that is overpaid or underpaid attracts use of money interest, a late payment penalty, or a shortfall penalty, as applicable
interested shareholder is defined in section HD 15(9) (Asset stripping of companies) for the purposes of that section
intermediary means a person described in section RP 2 or RP 17 (which relate to PAYE intermediaries and tax pooling intermediaries) for the purposes of subpart RP (Intermediaries)
international aircraft is defined in section EE 67 (Other definitions)
international organisation is defined in section CW 22(3) (Amounts derived by overseas experts and trainees in New Zealand by government arrangement) for the purposes of that section
international tax rules means—
-
(a) the following provisions:
(i) section CD 21 (Attributed repatriations from controlled foreign companies):
(ii) sections CD 45 to CD 52 (which relate to CFC attributed repatriation calculation rules):
(iii) subpart CQ (Attributed income from foreign equity):
(iv) section CZ 10 (Transitional relief for calculation of attributed repatriation dividends: 2 July 1992):
(v) subpart DN (Attributed losses from foreign equity):
(vi) subpart EX (Controlled foreign company and foreign investment fund rules):
(vii) section FM 6(4) (Some general rules for treatment of consolidated groups):
(viii) sections GB 7 to GB 16 (which relate to avoidance arrangements):
(ix) section GC 4 (Disposals and acquisitions of FIF attributing interests):
(x) subpart IQ (Attributed controlled foreign company net losses and foreign investment fund net losses):
(xi) sections LK 1 to LK 7 (which relate to foreign tax credits and CFCs):
(xii) section OE 5 (Treatment of attributed CFC income and FIF income in this subpart):
(xiii) sections YA 2 and YA 3 (which relate to the meaning of income tax):
(xiv) the 1988 version provisions (which relate to definitions of associated persons):
(xv) section YB 21 (Transparency of nominees):
(xvi) section YD 3 (Country of residence of foreign companies); and
(b) sections 61 and 183 of the Tax Administration Act 1994
investment society dividend means—
(a) a dividend declared by a friendly society; or
(b) a dividend declared by a registered society as defined in 2 of the Industrial and Provident Societies Act 1908; or
-
(c) for a building society,—
(i) a dividend declared by the society; or
(ii) some tangible or intangible benefit that a member or a shareholder receives for disposing to the society of a share in the society; the benefit may or may not be relief from an obligation and may or may not be convertible into money
investor means,—
(a) for a group investment fund, a person who is entitled, by reason of the terms of the trust under which the group investment fund is established, to the income from the money, investments, and other property of the group investment fund:
(b) for a portfolio investment entity that is a company, a shareholder in the company:
(c) for a portfolio investment entity that is not a company, a person who is entitled, by reason of the rules of the portfolio investment entity or the terms of the trust under which the portfolio investment entity is established, to a proportion of the funds available for distribution by the entity as if the entity were a company and the investor were a shareholder in the company
in-work payment is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
issue,—
(a) for a financial arrangement, means the act of creating the financial arrangement:
(b) is defined in section YZ 1 (Source rule for interest) for the purposes of that section
issuer is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
joint venture agreement, for an airport operator,—
(a) means an agreement made between an airport authority and the Crown acting by and through the Minister of Transport under section 94 of the Civil Aviation Act 1990; and
(b) includes any other agreement of a similar nature made between the Crown and an airport authority, whether or not the airport authority was, at the time the agreement was made, an airport authority, and whether or not the agreement was made before the commencement of the Civil Aviation Act 1990
KiwiSaver calculation period is defined in section RD 65(13) (Employer’s superannuation contributions) for the purposes of that section
KiwiSaver contributions means a contribution required to be deducted under Part 3, subpart 1 of the KiwiSaver Act 2006
KiwiSaver scheme means a KiwiSaver scheme, as defined in section 4 of the KiwiSaver Act 2006
land—
(a) includes any estate or interest in land:
(b) includes an option to acquire land or an estate or interest in land:
(c) does not include a mortgage:
(d) is defined in section CB 19(3) (Business exclusion from sections CB 6 to CB 11) for the purposes of that section:
(e) is defined in section IZ 1(12) (Use of specified activity net losses) for the purposes of that section:
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(f) in the definitions of permit area, petroleum mining asset, prospecting expenditure, and residual expenditure,—
(i) means all land within the territorial limits of New Zealand; and
(ii) includes land below the territorial sea of New Zealand or any other waters within the territorial limits of New Zealand; and
(iii) includes the continental shelf; and
(iv) includes the seabed and subsoil below any sea that is beyond the territorial sea of New Zealand but that, by New Zealand legislation and under international law, has been or may be designated as an area in which the rights of New Zealand relating to natural resources may be exercised
LAQC means a loss-attributing qualifying company as defined in section HA 3 (Meaning of loss-attributing qualifying company)
large budget screen production grant means a payment that—
(a) is in the nature of a large budget screen production grant; and
(b) is made in relation to a film or television production; and
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(c) is authorised by the New Zealand Film Commission in relation to a company that—
(i) is resident in New Zealand; or
(ii) has a permanent establishment in New Zealand
late balance date has the meaning given in section YE 1(7) (References to balance dates and years)
lease—
(a) means a disposition that creates a leasehold estate:
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(b) in sections DZ 9 (Premium paid on land leased before 1 April 1993) and EZ 8 (Premium paid on land leased before 1 April 1993),—
(i) means a disposition by which a leasehold estate is created; and
(ii) includes a licence:
(c) for the purposes of subpart EE (Depreciation), includes a licence to occupy:
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(d) in sections EJ 10 (Personal property lease payments), EX 21(30) and (31) (Branch equivalent income or loss: calculation rules), FA 6 to FA 11 (which relate to finance leases), FZ 2 to FZ 4 (which relate to specified leases) and in the definitions of cost price (paragraphs (b) to (e)), finance lease, guaranteed residual value, initial period, instalment, lessee (paragraph (b)), lessor (paragraph (b)), operating lease, outstanding balance, personal property lease asset, specified lease, and term of the lease,—
(i) means an agreement under which a lessor transfers to a lessee for the term of the lease a personal property lease asset or the right to possess a personal property lease asset in consideration for a personal property lease payment; and
(ii) includes a sublease; and
(iii) includes a licence to use intangible property; and
(iv) includes a hire or bailment; and
(v) includes a lease that is 2 or more consecutive or successive leases treated as 1 lease because the same personal property lease asset had been leased to the same lessee or an associated person of the lessee under the consecutive or successive leases and the Commissioner, having regard to the tenor of this paragraph, regards the consecutive or successive leases as 1 lease; and
(vi) does not include a hire purchase agreement, the definition of which applies, for this purpose, as if it did not contain paragraph (e); and
(vii) does not include an assignment of a hire purchase agreement, the definition of which applies, for this purpose, as if it did not contain paragraph (e):
(e) is defined in section GC 5(5) (Leases for inadequate rent) for the purposes of that section:
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(f) in the financial arrangements rules, means—
(i) a lease as described in paragraph (c):
(ii) an arrangement that would be a lease as described in paragraph (c) if the arrangement did not relate to real property, livestock, or bloodstock
leasehold estate includes any estate, however created, other than a freehold estate
legal defeasance means a defeasance in which the release of a party to a financial arrangement or an excepted financial arrangement from the primary obligation of the financial arrangement or the excepted financial arrangement is—
(a) acknowledged formally by the creditor; or
(b) acknowledged formally by a duly appointed trustee or agent of the creditor; or
(c) established by legal judgment
legal life is defined in section EE 67 (Other definitions)
less than 10% holder is defined in section YC 15(3) (Directors’ knowledge of failure to meet requirements of continuity provision) for the purposes of that section
lessee,—
(a) for a lease as described in paragraph (b) of the definition of lease, includes the holder of a licence to occupy:
-
(b) for a lease as described in paragraph (c) of the definition of lease,—
(i) means a person who leases a personal property lease asset from a lessor; and
(ii) includes a trustee or assignee of the person:
(c) for a hire purchase agreement, means the person who obtains the use of, or the right to use, the hire purchase asset under the agreement
lessor,—
(a) for a lease as described in paragraph (b) of the definition of lease, includes the grantor of a licence to occupy:
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(b) for a lease as described in paragraph (c) of the definition of lease,—
(i) means a person who assembles, manufactures, purchases, or otherwise acquires a personal property lease asset and leases it to a lessee; and
(ii) includes a trustee or assignee of the person:
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(c) for a hire purchase agreement,—
(i) means the person who grants to the lessee the use of, or the right to use, a hire purchase asset under the agreement; and
(ii) includes an assignee of the person in relation to the hire purchase agreement
levy, for a statutory producer board, means a sum payable by a member of the board under a power of the board to require or request the member to pay an amount of levy
licence-specific assets is defined in section DZ 5(6) (Farmout arrangements for petroleum mining before 16 December 1991) for the purposes of that section
life insurance is defined in sections EY 8 (Meaning of life insurance) and EY 14 (Life insurance and life reinsurance: how sections relate)
Life Insurance Fund means a Life Insurance Fund as defined in section 15 of the Life Insurance Act 1908 and, for a life insurer, means the life insurer’s Life Insurance Fund
life insurance policy—
(a) is defined in sections EY 9 (Meaning of life insurance policy) and EY 14 (Life insurance and life reinsurance: how sections relate); and
(b) when referred to in relation to a life insurer, means a life insurance policy under which the life insurer is the insurer
life insurance rules is defined in section EY 1(2) (What this subpart does)
life insured means—
(a) a human being on whose death or survival the payment of a benefit under a life insurance policy is contingent, including the payment of an annuity whose term is contingent on human life; and
(b) a human being to whom an annuity whose term is not contingent on human life is payable under a life insurance policy
life insurer—
(a) is defined in sections EY 10 (Meaning of life insurer) and EY 14 (Life insurance and life reinsurance: how sections relate):
(b) is defined in section CX 11(3) (Employment-related loans: loans by life insurers) for the purposes of that section:
(c) in section YC 17 (Demutualisation of insurers), and in the FBT rules, means a person carrying on a business of providing life insurance
life reinsurance is defined in sections EY 12 (Meaning of life reinsurance) and EY 14 (Life insurance and life reinsurance: how sections relate)
life reinsurance policy—
(a) is defined in sections EY 13 (Meaning of life reinsurance policy) and EY 14 (Life insurance and life reinsurance: how sections relate); and
(b) when referred to in relation to a life reinsurer, means a life reinsurance policy under which the life reinsurer is the reinsurer
life reinsurer is defined in sections EY 12(4) (Meaning of life reinsurance) and EY 14 (Life insurance and life reinsurance: how sections relate)
limitation rule is defined in section DD 1(3) (Entertainment expenditure generally)
limited attribution company is a company that is—
(a) a building society:
(b) a co-operative company registered under Part 2 or 3 of the Co-operative Companies Act 1996:
(c) a listed company:
(d) a widely-held company:
(e) a foreign company that is not a closely-held company
limited-recourse amount is defined in section GB 48(2) (Defined terms for sections GB 45 and GB 46) for the purposes of sections GB 45 and GB 46 (which relate to arrangements involving money not at risk)
limited-recourse loan is defined in section GB 48(3) (Defined terms for sections GB 45 and GB 46) for the purposes of sections GB 45 and GB 46 (which relate to arrangements involving money not at risk)
liquidation, for a company,—
-
(a) includes—
(i) removal of the company from the register of companies under the Companies Act 1993; and
(ii) termination of the company’s existence under any other procedure of New Zealand or foreign law; and
-
(b) includes, in references in this Act to anything occurring on liquidation, anything occurring—
(i) during the period that starts with a step that is legally necessary to achieve liquidation, including the appointment of a liquidator or a request of the kind referred to in section 318(1)(d) of the Companies Act 1993; and
(ii) for the purpose of enabling liquidation
listed company means, at any time, a company any shares in which are at that time quoted on an official list of a recognised exchange
listed horticultural plant, in sections DO 5 to DO 9 (which relate to deductions relating to horticultural plants),—
(a) means a horticultural plant, tree, vine, bush, cane, or similar plant that is cultivated on land, that is of a type that is listed in a determination made by the Commissioner under section 91AAB of the Tax Administration Act 1994:
-
(b) does not include—
(i) a tree planted mainly for the purposes of timber production:
(ii) a tree or other similar plant planted mainly for the purposes of ornamentation:
(iii) a vine planted mainly for the purposes of producing grapes for wine production
listed PAYE intermediary means a person which the Commissioner may list as an intermediary under section 15G of the Tax Administration Act 1994
livestock on the Chatham Islands means livestock that are on hand on the Chatham Islands at the end of an income year
living alone payment means a living alone payment under—
(a) section 74U of the War Pensions Act 1954; or
(b) section 18A of the Social Welfare (Transitional Provisions) Act 1990; or
loan,—
(a) has the same meaning as money lent:
(b) in sections CD 27 (Property made available intragroup) and CD 39 (Calculation of amount of dividend when property made available) and subpart LL (Underlying foreign tax credits (UFTC)), and in the FBT rules, includes any amount that a person advances or gives as principal under a financial arrangement, but not an excepted financial arrangement:
(c) for a holding company and a mining company, is defined in section CU 29 (Other definitions):
(d) is defined in section CZ 3(5) (Exchange variations on 8 August 1975) for the purposes of that section
local authority—
(a) means a local authority as defined in the Local Government Act 2002:
-
(b) includes—
(i) the administering body, as defined in the Reserves Act 1977, of any reserve classified under the Act as a recreation reserve or a scenic reserve:
(ii) an airport authority, other than an airport company, as defined in the Airport Authorities Act 1966:
(iii) the Aotea Centre Board of Management established by the Auckland Aotea Centre Empowering Act 1985:
(iv) the council of the Auckland Institute and Museum constituted under the Charitable Trusts Act 1957:
(v) the Canterbury Museum Trust Board continued in existence by section 5(1) of the Canterbury Museum Trust Board Act 1993:
(vi) the Otago Museum Trust Board continued in existence by section 5(1) of the Otago Museum Trust Board Act 1996:
(vii) the Auckland Regional Transport Authority established by section 7 of the Local Government (Auckland) Amendment Act 2004:
(viii) other than for the purposes of section CW 39(4) (Local authorities), Auckland Regional Holdings as established by section 18 of the Local Government (Auckland) Amendment Act 2004
logbook term is defined in section DE 8 (Logbook term)
long-term bailment is defined in section EC 27 (Some definitions) for the purposes of subpart EC (Valuation of livestock)
loss—
(a) includes an amount of depreciation loss, except when any of paragraphs (b) to (d) applies:
(b) means an attributed CFC loss when used in the expression
“attributed CFC income or loss”
:
(c) means a branch equivalent loss when used in the expression
“branch equivalent income or loss”
:
(d) means a FIF loss when used in the expression
“FIF income or loss”
loss balance means the balance of a tax loss that is carried forward to a tax year
loss period is defined in section IQ 7(4) (When group membership lacking in loss period) for the purposes of that section
loss-attributing qualifying company is defined in section HA 3 (Meaning of loss-attributing qualifying company)
low-turnover trader is defined in section EB 13(2) (Low-turnover valuation) for the purposes of subpart EB (Valuation of trading stock (including dealer’s livestock))
lump sum payment is defined in section EI 3(6) (Assigning or granting copyright) for the purposes of that section
MACA means Maori authority credit account
main deposit is defined in section EH 36 (Other definitions)
main income equalisation account is defined in section EH 36 (Other definitions)
main income equalisation scheme means the scheme referred to in section EH 1(2)(a) (Income equalisation schemes)
main maximum deposit is defined in section EH 35 (Meaning of main maximum deposit)
major shareholder, for a close company, means any person who—
(a) owns, or has the right to acquire, at least 10% of the ordinary shares of the company:
(b) has the power to control, directly or indirectly, at least 10% of the ordinary shares of the company:
(c) owns, or has the right to acquire, at least 10% of the voting rights of the company:
(d) has the power to control, directly or indirectly, at least 10% of the voting rights of the company:
(e) has, in any other way, 10% or more of the control of the company
Maori authority means a person who has made an election under section HF 11 (Choosing to become Maori authority)
Maori authority credit, for a distribution by a Maori authority, means—
(a) a credit referred to in section OA 5(8) (Credits):
(b) the amount treated as attached to the distribution under section RE 24 (When amount of tax treated as Maori authority credit)
Maori authority credit account means the account referred to in section OA 2(1)(g) (Memorandum accounts)
Maori authority credit account return means a return that must be filed under section 70B of the Tax Administration Act 1994
Maori authority credit ratio means the ratio set out in section OK 19 (Maori authority credits attached to distributions)
Maori authority debit means a debit referred to in section OA 6(8) (Debits)
Maori authority rules means the provisions listed in section HF 1(2) (Maori authorities and the Maori authority rules)
Maori incorporation is defined in section 4 of the Maori Land Act 1993
Maori investment company means a company that is incorporated for the purpose of acquiring shares or debentures issued by a forestry company for unpaid purchase money for Maori land bought by the forestry company from the Maori owners
Maori land means Maori freehold land as defined in the Maori Land Act 1993
Maori owners—
(a) means the persons who have a beneficial interest in Maori land bought by a forestry company; and
(b) includes every trustee for a Maori owner, the Maori Trustee, and every Maori incorporation that has a beneficial interest in the land
market interest is defined in section RD 35(5) (Employment-related loans: value using market interest rates) for the purposes of that section
market value,—
(a) for a share or option quoted on the official list of a recognised exchange, at the time, means an amount equal to the middle market quotation at the time for a share or option having the same terms as the share or option to be valued, unless the quotation is not a fair reflection of the market value, having regard at the time to the matters referred to in paragraph (e) of the definition of recognised exchange:
-
(b) for a share or option not quoted on the official list of a recognised exchange at the time, means the amount that a willing purchaser would pay to acquire the share or option in an arm’s length acquisition at the time and that is determined using a method that—
(i) conforms with commercially acceptable practice; and
(ii) may, in appropriate cases, have regard to the present value at the time of the company’s anticipated income or cash flows and the realisable value at the time of the company’s assets; and
(iii) results in a valuation that is fair and reasonable:
(c) in subpart EB (Valuation of trading stock (including dealer’s livestock)), does not include any GST that would be charged on the disposal by a person of their trading stock if the disposal would be a taxable supply:
(d) is defined in section EX 70 (Market value of life policy and superannuation entitlements) for certain purposes of sections EX 28 to EX 72 (which relate to the FIF rules):
(e) is defined in section RD 27(3) (Determining fringe benefit values) for the purposes of that section:
(f) is defined in section RD 40(3) (Goods) for the purposes of that section
market value circumstance, for a company at any time,—
-
(a) means an occasion or situation in which, at the time, the company has on issue a debenture—
(i) that is not an excluded fixed rate security or pre- 1991 budget security; and
(ii) to which section FA 2 (Recharacterisation of certain debentures) applies:
-
(b) also means an occasion or situation in which, at the time,—
(i) the company has on issue a share that is not an excluded fixed rate security or a pre-1991 budget security; and
(ii) the payment of a dividend is guaranteed or secured to the holder by some person other than the company; and
(iii) the directors of the company know or could reasonably be expected to know at the time that the payment of a dividend is so guaranteed or secured:
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(c) also means an occasion or situation in which, at the time, an option exists that—
(i) is not an excluded option; and
(ii) is to acquire a share in the company; and
(iii) is granted by the company or a person other than the company:
-
(d) also means an occasion or situation in which, at the time, an option exists that—
(i) is not an excluded option; and
(ii) is to require a person to acquire a share in the company:
-
(e) also means an occasion or situation in which, at the time, an arrangement or a series of related or connected arrangements exists that—
(i) relates to shares or options over shares in the company issued by the company or any other person; and
(ii) has a purpose or effect of defeating the intent and application of any provision of this Act whose application is dependent on the measurement of voting and market value interests:
(f) does not exist under any of paragraphs (a) to (e) if, at the time, no share in the company has a value higher than zero, except for an excluded fixed rate security or a pre-1991 budget security, and no option over a share in the company has a value higher than zero, except for an excluded option:
-
(g) also means an occasion or situation in which, at the time,—
(i) under any of paragraphs (a) to (e), a direct market value circumstance exists for another company (the shareholder company); and
(ii) the shareholder company is associated with the company; and
(iii) under section YC 4 (Look-through rule for corporate shareholders), any fraction of any market value interest held, or treated under section YC 4 as held, by the shareholder company in the company is treated as held by any other person
market value interest—
(a) means, for a person and a company and a time, the percentage market value interest that the person is treated as holding in the company at the time under sections YC 2 to YC 20 (which relate to the measurement of control and ownership interests):
(b) is further defined in section HA 44 (Measuring effective interests) for the purposes of subpart HA (Qualifying companies (QC) and loss-attributing qualifying companies (LAQC)) and the definition of effective interest
master fund means—
(a) a group investment fund that derives category A income; or
(b) a public unit trust
maturity,—
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(a) in the financial arrangements rules, means,—
(i) for an agreement for the sale and purchase of property or services or an option, the date on which the agreement or option ends:
(ii) for any other financial arrangement, the date on which the last payment contingent on the financial arrangement is made:
(b) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
maximum account balance is defined in section EK 23 (Other definitions) for the purposes of subpart EK (Environmental restoration accounts)
maximum deficit debit is defined in section OC 36 (Meaning of maximum deficit debit) for the purposes of section OC 23 (FDPA breach of FDP ratio by PCA company)
maximum payment is defined in section EK 22 (Meaning of maximum payment) for the purposes of subpart EK (Environmental restoration accounts)
maximum permitted ratio, for an imputation credit, an FDP credit, a CTR credit, or a Maori authority credit, means a ratio calculated under section OA 18 (Calculation of maximum permitted ratios)
maximum pooling value is defined in section EE 65 (Meaning of maximum pooling value)
measurement period, for an income year of a reporting bank, means 1 of the measurement periods for the income year described in section FE 8 (Measurement dates) for the purposes of subpart FE (Interest apportionment on thin capitalisation)
member,—
-
(a) in sections CD 33(1) (Payments corresponding to notional distributions of producer boards and co-operative companies) and OB 73 to OB 75 (which relate to imputation credit accounts of statutory producer boards), and in the definitions of levy and produce transactions, for a statutory producer board and for an income year, means a person who—
(i) is resident in New Zealand; and
(ii) carries on in the year a farming or agricultural or other business in relation to which the board has special statutory functions; and
(iii) is liable to pay a levy to the board for the year or enters into produce transactions with the board during the year:
(b) in subpart CS (Superannuation funds), and in the definition of withdrawal, is defined in the Superannuation Schemes Act 1989:
-
(c) in subpart HE (Mutual associations) in relation to a statutory producer board and to an income year, means a person who—
(i) is liable for the year to pay a levy to the statutory producer board; or
(ii) during the year, supplies produce or goods to the statutory producer board, in terms of the body’s primary statutory functions:
(d) is defined in section RE 30(10) (When unincorporated bodies hold certificates) for the purposes of that section:
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(e) in the Maori authority rules, means a person, or group of persons, who is—
(i) a shareholder of a Maori authority that is a company:
(ii) a beneficiary of a Maori authority that is the trustees of a trust
member’s contribution, in relation to a superannuation fund,—
(a) means a member’s contribution to the fund; and
(b) includes any return on the contribution
memorandum account means an account listed in section OA 2(1) (Memorandum accounts)
mineral—
(a) means all minerals and metals; and
(b) includes clay, coal, gravel, kauri gum, precious stones, sand, and stone
minibus means a motor vehicle, designed wholly or mainly for the carriage of persons, the interior of which contains—
-
(a) 3 seats, each of which—
(i) is designed for the seating of 2 or more adult persons; and
(ii) is permanently fixed to the motor vehicle; and
(iii) is neither collapsible nor capable of being folded down; or
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(b) more than 3 seats, of which not less than 3 are each—
(i) designed for the seating of 2 or more adult persons; and
(ii) permanently affixed to the motor vehicle; and
(iii) neither collapsible nor capable of being folded down
minimum market value interest—
(a) is defined in section IA 5(6) (Restrictions on companies’ loss balances carried forward) for the purposes of Part I (Treatment of tax losses):
(b) is defined in section LP 4(3) (Continuity rules for carrying credits forward) for the purposes of that section
minimum voting interest—
(a) is defined in section IA 5(6) (Restrictions on companies’ loss balances carried forward) for the purposes of Part I (Treatment of tax losses):
(b) is defined in section LP 4(3) (Continuity rules for carrying credits forward) for the purposes of that section
mining company is defined in section CU 22 (Meaning of mining company)
mining development expenditure is defined in section CU 23 (Meaning of mining development expenditure)
mining exploration expenditure is defined in section CU 24 (Meaning of mining exploration expenditure)
mining holding company is defined in section CU 29 (Other definitions)
mining operations is defined in section CU 25 (Meaning of mining operations)
mining or prospecting right is defined in section CU 29 (Other definitions)
mining outgoing excess is defined in section DU 7(4) (Limit on deduction)
mining permit is defined in section 2 of the Crown Minerals Act 1991 and includes an existing privilege under paragraphs (a) and (b) of the definition of existing privilege in section 106 of that Act
mining permit area means an area, and may include more than 1 area, of—
(a) a mining permit; or
(b) an existing privilege referred to in paragraphs (a) and (b) of the definition of existing privilege in section 106 of the Crown Minerals Act 1991
mining prospecting information is defined in section CU 29 (Other definitions)
mining purposes is defined in section CU 29 (Other definitions)
mining share is defined in section CU 29 (Other definitions)
mining venture is defined in section CU 26 (Meaning of mining venture)
Minister means the Minister of Finance
minor is defined in section HC 35(3) (Beneficiary income of minors) for the purposes of that section and sections HC 36, HC 37, LE 4, and LF 2 (which relate to beneficiary minors)
money,—
-
(a) in section GB 48 (Defined terms for sections GB 45 and GB 46), in the financial arrangements rules, and in the definition of security payment, includes—
(i) money’s worth, whether or not convertible into money:
(ii) the right to money, including the deferral or cancellation of some or all of an obligation to pay money:
(b) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
money lent means—
(a) an amount of money that a person lends in some way, including by depositing it in an account, whether or not the lending is secured or evidenced in writing:
(b) an amount of credit that a person gives, including by not enforcing a debt, whether or not the giving is secured or evidenced in writing:
(c) an amount of money that a person lends, or credit that a person gives, under an obligation or arrangement, whether or not secured or evidenced in writing:
-
(d) an amount of money that goes from a person (person A) to another person (person B) in consideration for person B’s promise to pay person A an amount of money and that is less than the amount that person B promises to pay person A. For the purposes of this paragraph,—
(i) money goes from person A when it is paid to person B:
(ii) person B’s promise is not required to be secured or evidenced in writing:
(iii) person B includes any other person with whom person B is an associated person
monthly instalment plan is defined in section EZ 30(3) (Base premium for 1998–99 premium year under Accident Insurance Act 1998) for the purposes of that section
mortality profit means the amount calculated by a life insurer following the steps in section EY 26(2) (Mortality profit: when life insurers providing life insurance at start of income year) or EY 27(2) (Mortality profit: when life insurers not providing life insurance at start of income year), as applicable
mortality profit formula means the formula in section EY 28 (Mortality profit formula)
mortgage means a mortgage, charge, or other security, whether legal or equitable
motor vehicle,—
-
(a) in subpart DE (Motor vehicle expenditure), means a motor vehicle that—
(i) is a road vehicle, whenever or however used; and
(ii) is not a trailer; and
(iii) is of the kind ordinarily used for the carriage of persons or the transport or delivery of goods or animals:
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(b) in the FBT rules, and in the definition of car,—
(i) is defined in section 2(1) of the Land Transport Act 1998; and
(ii) does not include a vehicle the gross laden weight of which is more than 3500 kilograms
mutual transaction means a transaction of the kind described in section HE 2 (Classes of mutual transaction) entered into between an association and its members, or with members and other persons who are not members
national average market value, for a class of livestock and for an income year, means the national average market value determined under section EC 15 (Determining national average market values) for livestock of the class for the income year
national standard cost scheme means the livestock valuation method specified in section EC 22 (National standard cost scheme)
natural person is defined in section FE 4 (Some definitions) for the purposes of subpart FE (Interest apportionment on thin capitalisation)
natural resource includes—
(a) land:
(b) water:
(c) air:
(d) soil or subsoil below land, water, or air:
(e) a mineral:
(f) a geographic or geological feature:
(g) a part of the electromagnetic spectrum:
(h) a form of energy:
(i) a living organism, whether naturally or artificially generated:
(j) an ecosystem:
(k) a right to or interest in an item referred to in any of the preceding paragraphs
net family scheme income is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
net gambling proceeds means net proceeds as defined in section 4 of the Gambling Act 2003
net income means net income for a tax year calculated under section BC 4 (Net income and net loss)
net loss means a net loss for a tax year calculated under section BC 4 (Net income and net loss) and reduced by the amount extinguished by the Commissioner under section 177C(5) of the Tax Administration Act 1994
new asset is defined in section EZ 24 (Meaning of new asset)
new start grant means a grant of money that is designated by the Minister of Agriculture as a new start grant and is paid by the Government of New Zealand to a person in relation to—
(a) an adverse event:
(b) an event that is a qualifying event
New Zealand includes—
(a) the continental shelf:
-
(b) the water and the air space above any part of the continental shelf that is beyond New Zealand’s territorial sea, as defined in section 3 of the Territorial Sea, Contiguous Zone, and Exclusive Economic Zone Act 1977, if and to the extent to which—
(i) any exploration or exploitation in relation to the part, or any natural resource of the part, is or may be undertaken; and
(ii) the exploration or exploitation, or any related matter, involves, or would involve any activity on, in, or in relation to the water or air space
New Zealand banking group, for a registered bank, means the New Zealand banking group referred to in section FE 36 (Identifying members of New Zealand banking group) for the purposes of subpart FE (Interest apportionment on thin capitalisation)
New Zealand business, in relation to a life insurer not resident in New Zealand, means the part of the business of the life insurer that consists of life insurance policies or life reinsurance policies offered or entered into in New Zealand
New Zealand net equity, for a New Zealand banking group is the amount referred to in section FE 21 (Banking group’s New Zealand net equity) for the purposes of subpart FE (Interest apportionment on thin capitalisation)
New Zealand-new asset is defined in section EZ 25 (Meaning of New Zealand-new asset)
New Zealand repatriation amount is defined in section CD 46 (New Zealand repatriation amount)
New Zealand resident—
-
(a) means a person resident in New Zealand under—
(i) section EY 49 (Non-resident life insurer becoming resident):
(ii) sections YD 1 to YD 3 (which relate to residence)
(b) is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
New Zealand superannuation—
(a) means New Zealand superannuation payable under Part 1 of the New Zealand Superannuation and Retirement Income Act 2001; and
-
(b) includes—
(i) a living alone payment payable to a New Zealand superannuitant under section 13 of the New Zealand Superannuation and Retirement Income Act 2001; and
(ii) an amount payable under section 70(3)(b) of the Social Security Act 1964; and
(iii) national superannuation payable, before 1 April 1994, under Part 1 of the Social Welfare (Transitional Provisions) Act 1990; and
-
(c) does not include—
(i) portable New Zealand superannuation; or
(ii) a supplement or benefit paid or payable under any of sections 61DB, 61DC, 61DD, 61DE, 61EA, 61G, and 69C of the Social Security Act 1964
New Zealand superannuitant, for a tax year,—
(a) means a person who receives New Zealand superannuation in the tax year; and
-
(b) does not include a person who receives New Zealand superannuation at a rate specified in—
(i) schedule 1, clause 2 of the New Zealand Superannuation and Retirement Income Act 2001; or
(ii) schedule 1, clause 2 of the Social Welfare (Transitional Provisions) Act 1990
New Zealand tax means income tax imposed by this Act or any earlier Act
nominated company,—
(a) for a consolidated group, means the company described in section FM 34 (Nominated companies) for the time being nominated as agent of the group under section FM 35 (Forming consolidated group):
(b) for an imputation group, means the company described in section FN 6 (Nominated companies) for the time being nominated as agent of the group under section FN 7 (Forming imputation groups)
nominee, in sections RE 7 and RE 8 (which relate to resident passive income paid to trustees and nominees) means a person described in section YB 21(2) (Transparency of nominees)
non-cash dividend means a dividend to the extent to which it does not consist of—
(a) an unconditional payment in money; or
(b) an unconditional credit in money to the balance of a shareholder’s current or other form of account with the company
non-complying trust is defined in section HC 12 (Non-complying trusts)
non-concessionary rate of interest, for an employment-related loan made on or before 31 March 1985, means the rate of interest declared by regulations to be the non-concessionary rate of interest for the period of 12 consecutive months, ending on 31 March, in which the loan was made
non-contingent fee means a fee that—
(a) is for services provided for a person becoming a party to a financial arrangement; and
(b) is payable whether or not the financial arrangement proceeds
non-creditable dividend is defined in section LL 9 (Some definitions) for the purposes of subpart LL (Underlying foreign tax credits (UFTC))
non-discretionary trust is defined in section HC 16(8) (Ordering rule for distributions from non-complying and foreign trusts) for the purposes of that section
non-executive director is defined in section CD 20(4) (Benefits of shareholder-employees or directors)
non-filing taxpayer means—
-
(a) a person to whom section 33A(1) of the Tax Administration Act 1994 applies and to whom 1 of the following applies:
(i) they do not receive an income statement for a tax year; or
(ii) the Commissioner is not required to send them an income statement for a tax year; or
(iii) the Commissioner is prohibited from sending them an income statement for a tax year; or
(b) a person who chooses not to file a return for a tax year for specified payments derived in the person’s capacity as a non-resident entertainer; or
(c) a person who, in the relevant tax year, derives only non-resident passive income to which section RB 3 (Schedular income tax liability for filing taxpayers for non-resident passive income) applies
non-listed horticultural plant, in section DO 4 (Improvements to farm land) and schedule 20, part A, item 8 (Expenditure on farming, horticultural, aquacultural, and forestry improvements)—
-
(a) means—
(i) a horticultural plant, tree, vine, bush, cane, or similar plant that is cultivated on land, that is not a listed horticultural plant:
(ii) a tree or other similar plant planted mainly for the purposes of ornamentation:
(b) does not include a tree planted mainly for the purposes of timber production
non-participating redeemable share is defined in section CD 22(9) (Returns of capital: off-market share cancellations)
non-refundable tax credit means—
(a) a tax credit under subpart LC (Tax credits for natural persons), excluding section LC 6 (Tax credits for housekeeping):
(b) a tax credit under subpart LJ (Tax credits for foreign income tax):
(c) a tax credit under subpart LK (Tax credits relating to attributed controlled foreign company income):
(d) a tax credit under subpart LQ (Tax credits of conduit tax relief companies):
(e) a tax credit under subpart LR (Tax credits for policyholder income):
(f) an amount in a person’s branch equivalent tax account or policyholder credit account that the person chooses, under Part O (Memorandum accounts), to credit in payment of income tax:
(g) a credit under section HL 29(7)(a) (Credits received by portfolio tax rate entity or portfolio investor proxy) to an investor who is allocated a credit under subpart LJ received by a portfolio tax rate entity or a portfolio investor proxy
non-resident means a person who is not a New Zealand resident
non-resident aircraft operator is defined in section CW 56(3) (Non-resident aircraft operators) for the purposes of that section
non-resident company means a company that is not a New Zealand resident
non-resident contractor, in the PAYE rules, means a person who—
(a) is not resident in New Zealand under subpart YD (Residence and source in New Zealand); and
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(b) undertakes under a contract, agreement, or arrangement (other than a contract of service or apprenticeship)—
(i) to perform services of any kind in New Zealand:
(ii) to supply the use, or right to use, in New Zealand any personal property or services of another person
non-resident crew member is defined in section CW 21(2) (Amounts derived by visiting crew of pleasure craft) for the purposes of that section
non-resident entertainer is defined in section CW 20(4) (Amounts derived by visiting entertainers including sportspersons) for the purposes of that section, and in the PAYE rules, means a person who—
(a) is not resident in New Zealand under subpart YD (Residence and source in New Zealand); and
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(b) during a visit to New Zealand, undertakes an activity or performance connected with—
(i) a sporting event or competition; or
(ii) making speeches or giving lectures or talks for any purpose; or
(iii) acting, singing, playing music, dancing, or entertaining generally, for any purpose and whether alone or not; and
-
(c) meets the requirements of any of the following paragraphs:
(i) is not fully or partly sponsored under a cultural programme of an overseas government or the Government of New Zealand:
(ii) is not an official representative of a body that administers a game or sport in an overseas country:
(iii) is not undertaking an activity or performance under a programme of a foundation, trust, or organisation outside New Zealand which exists for the promotion of a cultural activity and is not carried on for individual profit of a member or shareholder:
(iv) if they are an employee, officer, or principal of a company, firm, or other person, includes the company, firm, or other person
non-resident investment company is defined in section LZ 5 (Some definitions) for the purposes of sections LZ 2 to LZ 4 (which relate to credits for certain development projects)
non-resident mining operator is defined in section CU 29 (Other definitions)
non-resident passive income is defined in section RF 2 (Non-resident passive income)
non-resident person is defined in section CW 22(3) (Amounts derived by overseas experts and trainees in New Zealand by government arrangement) for the purposes of that section
non-resident taxpayer is defined in section HD 26(2) (Agency in relation to non-residents generally) for the purposes of sections HD 27 and HD 28 (which relate to employers and certain payments)
non-resident trader means a person who—
(a) is in New Zealand; and
(b) carries on business here without having a fixed and permanent place of business or home here
non-residents’ foreign-sourced income is defined in section BD 1(4) (Income, exempt income, excluded income, non-residents’ foreign-sourced income, and assessable income)
non-residents’ foreign-sourced income limitation is defined in section DA 2(6) (General limitations)
non-specified livestock means livestock other than bloodstock, high-priced livestock, and specified livestock
non-standard accounting year has the meaning given in section YE 1(5) (References to balance dates and years)
non-standard balance date has the meaning given in section YE 1(5) (References to balance dates and years)
non-standard income year has the meaning given in section YE 1(5) (References to balance dates and years)
non-taxable bonus issue means a bonus issue that is not a taxable bonus issue
normal retiring age is defined in section DC 15 (Some definitions) for the purposes of sections DC 12 to DC 14 (which relate to share purchase schemes)
notice is defined in section 3(1) of the Tax Administration Act 1994
notice of entitlement means a notice issued under section 80KD(2) of the Tax Administration Act 1994
notice period is defined in section FM 38(6) (Notice requirements on forming or joining consolidated group) for the purposes of that section
notify means to give notice
notional offshore investment amount, for a reporting bank, is the amount referred to in section FE 22(2) (Notional offshore investment) for the purposes of FE 21(14) (Banking group’s New Zealand net equity)
notional sale price is defined in section FA 10(2) (Treatment when lease ends: lessor acquiring asset) for the purposes of that section
NRWT means non-resident withholding tax and refers to an amount payable as income tax under the NRWT rules
NRWT rules means the provisions listed in section RF 1 (NRWT rules and their application)
offered or entered into in New Zealand, for an insurance contract, a reinsurance contract, and a life insurance policy, means a contract or policy offered or entered into in New Zealand, whether or not—
(a) the contract or policy is executed in New Zealand; or
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(b) the insurer under the contract or policy—
(i) is resident in New Zealand; or
(ii) has a fixed establishment in New Zealand; or
(iii) has an agent in New Zealand
offered or was offered or entered into, in sections EY 12 (Meaning of life reinsurance) and EY 48 (Non-resident life insurers with life insurance policies in New Zealand), has the same meaning as offered or entered into in New Zealand
off-market cancellation means a share cancellation that is not an on-market cancellation
offshore development is defined in section EJ 19 (Meaning of offshore development) for the purposes of section EJ 12 (Petroleum development expenditure)
offshore permit area is defined in section CW 57 (Non-resident company involved in exploration and development activities) for the purposes of that section
old financial arrangements rules means—
-
(a) the following provisions:
(i) sections EZ 33 to EZ 52 (which relate to the old financial arrangements rules):
(ii) section FF 2 (Financial arrangements) of the Income Tax Act 2004, as that section was before the commencement of the Taxation (Accrual Rules and Other Remedial Matters) Act 1999:
(iii) sections RA 11 and RA 12 (which relate to adjustments to correct errors); and
-
(b) the following provisions of the Tax Administration Act 1994:
(i) section 60 (as in force before the enactment of section 70 of the Taxation (Accrual Rules and Other Remedial Matters) Act 1999):
(ii) section 90
on-market cancellation means an acquisition by a company of a share in the company if—
(a) the company acquires the share in a transaction occurring on a recognised exchange, through a broker or some other similar agent independent of the company; and
(b) before the transaction, no arrangement existed between the shareholder and the company for the company to acquire the share; and
(c) the acquisition is not a treasury stock acquisition to which section CD 25 (Treasury stock acquisitions) applies, but this paragraph does not limit the application of section CD 25(2) to (6); and
(d) it includes an acquisition of the company’s shares on the recognised exchange that is undertaken by an associated person under an arrangement for the associate to acquire the shares in lieu of the company
onshore development is defined in section EJ 20 (Meaning of onshore development) for the purposes of section EJ 12 (Petroleum development expenditure)
operating lease means a lease that—
(a) is not a finance lease; and
(b) is entered into on or after 20 May 1999
operational allowance is defined in section CW 23(4) (Income for military or police service in operational area) for the purposes of that section
operational area is defined in section CW 23(4) (Income for military or police service in operational area) for the purposes of that section
option, in sections FB 10 (Continuity provisions: shares and options), GB 5 (Arrangements involving trust beneficiaries), and YC 2, YC 3, YC 5, YC 8, and YC 9 (which relate to the measurement of control and ownership interests), and in the definitions of excluded option, market value (paragraphs (a) and (b)), market value circumstance (paragraphs (c) to (f)), pre-1991 budget security, recognised exchange, and shareholder decision-making right, includes an agreement for sale at a time when beneficial ownership of the property sold has not completely passed to the purchaser
ordering rule means the rule set out in section CD 23(1) (Ordering rule and slice rule) for calculating the amount of available subscribed capital per share
original share means a share in a company that is described as the original share in the definition of returning share transfer
other amortisation provision means a provision of this Act that has similar intent and application to sections EE 1 (What this subpart does), EZ 7 (Buying patent rights before 1 April 1993), and EZ 8 (Premium paid on land leased before 1 April 1993)
output tax is defined in section 2 of the Goods and Services Tax Act 1985
outstanding balance,—
(a) in section FA 10 (Treatment when lease ends: lessor acquiring asset), includes principal, interest, and penalties that are owing by the lessee to the lessor on the date that the lease is terminated
(b) is defined in section FZ 2(9) (Effect of specified lease on lessor and lessee) for the purposes of sections FZ 2 and FZ 3 (which relate to specified leases)
overseas pension is defined in section CW 28(2) (Pensions) for the purposes of that section
own,—
(a) for land, means to have an estate or interest in the land, alone or jointly or in common with any other person:
(b) for the ownership of depreciable property, is defined in sections EE 2 to EE 5 (which relate to depreciation)
ownership interest is defined in section YC 18(6) (Reverse takeovers) for the purposes of that section
paid work is defined in section LC 5(5) (Meaning of engaged in full-time work) for the purposes of that section
parental entitlement period means the period of time described in section MD 11(1)(b)(i) (Entitlement to parental tax credit)
parental tax credit is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
partial reinsurance is defined in section EY 12(3) (Meaning of life reinsurance)
participating share is defined in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section
partner is defined in section RE 30(10) (When unincorporated bodies hold certificates) for the purposes of that section
partnership is defined in section RE 30(10) (When unincorporated bodies hold certificates) for the purposes of that section
patent right means the right to do or authorise anything that would, but for the right, be an infringement of a patent
pay,—
-
(a) for an amount and a person, includes—
(i) to distribute the amount to them:
(ii) to credit them for the amount:
(iii) to deal with the amount in their interest or on their behalf, in some other way:
(b) for a dividend that is a bonus issue, means to issue shares or to give credit for the shares comprising the bonus issue:
(c) is defined in section RD 51(6) (Calculation of all-inclusive pay) for the purposes of that section
pay period, for an employee receiving regular payments of salary or wages, means the period for which any such payment is payable
PAYE means pay-as-you-earn and refers to an amount payable as income tax under the PAYE rules
PAYE income payment is defined in section RD 3 (PAYE income payments) for the purposes of the PAYE rules
PAYE income payment form, for an employer, means a form authorised by the Commissioner that shows—
(a) the period to which the form relates; and
(b) the name of the employer; and
(c) the tax file number of the employer; and
(d) the total amounts of tax withheld and paid; and
(e) the total amount of child support payments; and
(f) the total amount of student loan payments; and
(g) the total KiwiSaver contribution deductions made under Part 3, subpart 1 of the KiwiSaver Act 2006; and
(h) the amount of employer’s superannuation contribution paid under the KiwiSaver Act 2006 and the amount of ESCT withheld and paid; and
(i) the amount of employer’s superannuation contributions paid and the amounts of tax withheld and paid, other than that shown in paragraph (h); and
(j) other similar information that the Commissioner may require
PAYE intermediary, for an employer, means—
-
(a) a person who—
(i) is accredited as a PAYE intermediary by the Commissioner under section 15D or 15G of the Tax Administration Act 1994; and
(ii) has entered an agreement with the employer, applying to employees of the employer, that has been approved by the Commissioner under section 15J of that Act; and
(iii) has entered into agreements that have been approved by the Commissioner under section 15J of that Act with not less than 10 employers:
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(b) a person who—
(i) no longer meets the requirements of paragraph (a); and
(ii) has responsibilities under section RP 2(3) (PAYE intermediaries)
PAYE rules means the provisions listed in section RD 2(1) (PAYE rules and their application)
payer, in the RWT rules, means a person who makes a payment of resident passive income
payment relating to incapacity for work is defined in section CW 34(2) (Compensation payments) for the purposes of that section
PCA means policyholder credit account
PCA company means a company described in section OJ 1(1) (General rules for companies and other persons with policyholder credit accounts)
PCA person means a person who chooses under section OJ 1(2) and OJ 12 (which relate to persons with policyholder credit accounts) to maintain a policyholder credit account
penalties and interest is defined in section HD 15(9) (Asset stripping of companies) for the purposes of that section
pension is defined in section CF 1(2) (Benefits, pensions, compensation, and government grants) for the purposes of that section
period of restriction is defined in section DC 15(2) to (4) (Some definitions) for the purposes of sections DC 13 to DC 15 (which relate to share purchase schemes)
permit is defined in section 2 of the Crown Minerals Act 1991
permit area means the area of land covered by a petroleum permit
permit-specific asset is defined in section DZ 5(6) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section
permitted withdrawal means a withdrawal permitted under the KiwiSaver scheme rules as defined in section 4 of the KiwiSaver Act 2006 or under the complying fund rules
person—
(a) is defined in section EH 3(2) (Persons to whom main income equalisation scheme applies) for the purposes of the main income equalisation scheme:
(b) is defined in section EH 37(2) (Persons to whom adverse event income equalisation scheme applies) for the purposes of the adverse event income equalisation scheme:
(c) is defined in section EH 63(2) (Persons to whom thinning operations income equalisation scheme applies) for the purposes of the thinning operations income equalisation scheme
personal injury by accident is defined in section LC 5(4) (Meaning of engaged in full-time work) for the purposes of that section
personal property, in sections CB 4 (Personal property acquired for purpose of disposal) and CB 5 (Business of dealing in personal property) does not include land
personal property lease asset—
(a) means any personal property subject to a lease; and
(b) does not include any livestock or bloodstock
personal property lease payment means a payment made by a lessee to a lessor, in money or money’s worth, in relation to, or in consideration for, a personal property lease asset
petroleum is defined in section 2 of the Crown Minerals Act 1991
petroleum development expenditure—
-
(a) means expenditure incurred by a petroleum miner that—
(i) directly concerns a permit area; and
(ii) is for acquiring, constructing, or planning petroleum mining assets; and
-
(b) does not include—
(i) residual expenditure; or
(ii) petroleum exploration expenditure; or
(iii) other expenditure allowed as a deduction under any provision of this Act, other than a provision in subpart DT (Petroleum mining expenditure) or DZ (Terminating provisions), and allocated to the income year in which the expenditure is incurred
petroleum exploration expenditure—
-
(a) means—
(i) exploratory well expenditure; and
(ii) prospecting expenditure; and
(iii) expenditure to acquire an existing privilege, a prospecting permit for petroleum, or an exploration permit for petroleum; and
-
(b) does not include—
(i) residual expenditure; or
(ii) expenditure that is required by section DT 6 (Expenditure on petroleum mining assets) to be treated as petroleum development expenditure
petroleum miner is defined in section CT 6 (Meaning of petroleum miner)
petroleum mining asset is defined in section CT 7 (Meaning of petroleum mining asset)
petroleum mining company means a company to which sections IZ 2 and IZ 3 (which relate to companies engaged in exploring for, searching for, or mining petroleum) apply
petroleum mining development expenditure is defined in section DZ 3(4) (Petroleum mining: development expenditure from 1 October 1990 to 15 December 1991) for the purposes of that section
petroleum mining operations—
-
(a) means any of the following activities:
(i) developing a permit area for producing petroleum:
(ii) producing petroleum:
(iii) processing, storing, or transmitting petroleum before its dispatch to a buyer, consumer, processor, refinery, or user:
(iv) removal or restoration operations; and
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(b) does not include further treatment to which all the following apply:
(i) it occurs after the well stream has been separated and stabilised into crude oil, condensate, or natural gas; and
(ii) it is done by liquefaction or compression or for the extraction of constituent products or for the production of derivative products; and
(iii) it is not treatment at the production facilities
petroleum mining permit is defined in section 2 of the Crown Minerals Act 1991
petroleum permit means—
(a) a prospecting permit:
(b) an exploration permit:
(c) a mining permit to the extent to which it remains current
petroleum-related depreciable property is defined in section EE 67 (Other definitions)
physical cost of production is defined in section DZ 11(3) (Film reimbursement scheme on or before 30 June 2001) for the purposes of that section
plant variety rights means proprietary rights granted for a plant variety under the Plant Variety Rights Act 1987 or similar rights given similar protection under the laws of a country or territory other than New Zealand
planting is defined in section DO 8 (Meaning of planting and plot) for the purposes of sections DO 5 to DO 8 (which relate to horticultural plants)
pleasure craft is defined in section CW 21(2) (Amounts derived by visiting crew of pleasure craft) for the purposes of that section
plot is defined in section DO 8 (Meaning of planting and plot) for the purposes of sections DO 5 to DO 8 (which relate to horticultural plants)
policyholder base, for a life insurer and for an income year, means the benefits accruing to policyholders by way of claims paid and payable and amounts included in the life insurer’s actuarial reserves
policyholder base income tax liability means the schedular income tax liability for a tax year of a life insurer for the policyholder base, determined under section BC 7 (Income tax liability of person with schedular income)
policyholder credit means a credit referred to in section OA 5(7) (Credits)
policyholder credit account is the account referred to in section OA 2(1)(f) (Memorandum accounts)
policyholder debit means a debit referred to in section OA 6(7) (Debits)
policyholder FDP ratio is defined in section OC 37 (Meaning of policyholder FDP ratio) for the purposes of sections OC 23 and OC 36 (which relate to FDP credits and debits)
policyholder income means a positive result of the application of the policyholder income formula
policyholder income formula means the formula in section EY 43 (Policyholder income formula)
policyholder net loss means a negative result of the application of the policyholder income formula, including a policyholder net loss referred to in section II 2 (Policyholder net loss for tax year preceding 1990–91) of the Income Tax Act 2004
pool is defined in section EE 67 (Other definitions)
pool method is defined in section EE 67 (Other definitions)
poolable property is defined in section EE 66 (Meaning of poolable property)
portable New Zealand superannuation means New Zealand superannuation paid or payable overseas under any of—
(a) sections 26 to 29 and 31 of the New Zealand Superannuation and Retirement Income Act 2001; or
(b) sections 17, 17BA, or 19 of the Social Welfare (Transitional Provisions) Act 1990
portable veteran’s pension means a veteran’s pension paid or payable overseas under any of—
(a) sections 74J to 74M and 74O of the War Pensions Act 1954:
(b) sections 17, 17BA, and 19 of the Social Welfare (Transitional Provisions) Act 1990
portfolio allocation period, for a portfolio tax rate entity, means a period that meets the requirements of section HL 16 (Portfolio allocation period and portfolio calculation period) to which the entity allocates income
portfolio calculation period, for a portfolio tax rate entity, means a period consisting of 1 or more portfolio allocation periods that meets the requirements of section HL 16 (Portfolio allocation period and portfolio calculation period) for the calculation of portfolio investor allocated income and portfolio investor allocated loss
portfolio class fraction, for a portfolio tax rate entity and a portfolio investor class, means the fraction of the proceeds from a portfolio entity investment to which the investors in the portfolio investor class are entitled as a group
portfolio class investment value, for a portfolio tax rate entity, a portfolio investor class, and a portfolio entity investment, means the portfolio class fraction of the market value of the portfolio entity investment
portfolio class net income is defined in section HL 19 (Portfolio class net income and portfolio class net loss for portfolio allocation period)
portfolio class net loss is defined in section HL 19 (Portfolio class net income and portfolio class net loss for portfolio allocation period)
portfolio class taxable income is defined,—
(a) for a tax year, in section HL 31 (Portfolio class taxable income and portfolio class taxable loss for tax year):
(b) for a portfolio allocation period, in section HL 20 (Portfolio class taxable income and portfolio class taxable loss for portfolio allocation period)
portfolio class taxable loss is defined,—
(a) for a tax year, in section HL 31 (Portfolio class taxable income and portfolio class taxable loss for tax year):
(b) for a portfolio allocation period, in section HL 20 (Portfolio class taxable income and portfolio class taxable loss for portfolio allocation period)
portfolio defined benefit fund means a defined benefit fund that—
(a) does not allocate income to investors; and
(b) has become a portfolio investment entity under section HL 13 (Becoming portfolio investment entity); and
(c) has not ceased to be a portfolio investment entity under section HL 15 (Ceasing to be portfolio investment entity)
portfolio entity formation loss is defined in section HL 30 (Portfolio entity formation loss)
portfolio entity investment means an investment of a portfolio investment entity in an item of property of a type to which section HL 10(1) (Further eligibility requirements relating to investments) refers
portfolio entity tax liability, for a portfolio tax rate entity for a period, is defined in section HL 21 (Portfolio entity tax liability and tax credits of portfolio tax rate entity for period)
portfolio investment entity means—
(a) a portfolio tax rate entity:
(b) a portfolio listed company:
(c) a portfolio defined benefit fund
portfolio investor allocated income is defined in section HL 26 (Portfolio investor allocated income and portfolio investor allocated loss)
portfolio investor allocated loss is defined in section HL 26 (Portfolio investor allocated income and portfolio investor allocated loss)
portfolio investor class means 1 or more investors in a portfolio investment entity, each investor having an entitlement to a distribution by the entity of proceeds from portfolio entity investments such that—
(a) the portfolio entity investments are the same for all the investors in the group; and
(b) each investor’s interest in a portfolio entity investment represents a proportion (the investment proportion) of the value of the investor’s entitlement; and
(c) the investment proportion for each investor and each portfolio entity investment differs from the average value of the investment proportion for the investors in the group and the portfolio entity investment by less than 2.5% of that average value
portfolio investor exit period, for an investor in a portfolio investor class of a portfolio tax rate entity and a tax year, means,—
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(a) for an entity that makes payments of tax under section HL 22 (Payments of tax by portfolio tax rate entity making no election), a period—
(i) beginning with the beginning of a portfolio calculation period and ending with the fifth working day after the portfolio calculation period; and
(ii) for which the amount of the entity’s portfolio tax liability under section HL 21 (Portfolio entity tax liability and tax credits of portfolio tax rate entity for period) for the investor and the portfolio investor class and any other portfolio investor classes would, if the period were not a portfolio investor exit period for the investor, equal or exceed the value of the investor’s portfolio investor interest for the portfolio investor class and any other portfolio investor classes at the end of the period; and
(iii) the amount of the portfolio entity tax liability referred to in subparagraph (ii) is not paid under section HL 25 (Optional payments of tax by portfolio tax rate entities); or
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(b) for an entity that makes payments of tax under section HL 24 (Payments of tax by portfolio tax rate entity choosing to make payments when investor leaves), a period—
(i) beginning with the later of the beginning of the tax year and the day on which the investor last became an investor in the portfolio investor class; and
(ii) ending on a day in the tax year on which the entity’s portfolio entity tax liability under section HL 21 for the investor and the portfolio investor class and any other portfolio investor classes for the period equals or is more than the value of the investor’s portfolio investor interest for the portfolio investor class and any other portfolio investor classes
portfolio investor interest means an interest in a portfolio investment entity that gives the holder an entitlement to a distribution of proceeds from a portfolio entity investment of the entity
portfolio investor interest fraction, for an investor in a portfolio investor class of a portfolio investment entity, means the fraction to which the investor is entitled of the amount of a distribution by the entity to the investors in the portfolio investor class
portfolio investor proxy is defined in section HL 33 (Portfolio investor proxies)
portfolio investor rate, for an investor in a portfolio tax rate entity and a portfolio calculation period, means—
(a) 30%, if paragraphs (b) and (c) do not apply; or
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(b) the rate, if paragraph (c) does not apply, that the investor notifies to the entity as the prescribed investor rate for the investor and the period—
(i) before the end of the portfolio calculation period, if the entity makes payments of tax under section HL 22 (Payments of tax by portfolio tax rate entity making no election); and
(ii) before the end of the tax year in which the portfolio calculation period occurs, if the entity makes payment of tax under section HL 24 (Payments of tax by portfolio tax rate entity choosing to make payments when investor leaves); and
(iii) before the entity has calculated the portfolio investor allocated income or portfolio investor allocated loss for the investor and the period; and
(iv) by a notice meeting the requirements of section 28B of the Tax Administration Act 1994; or
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(c) 0%, if—
(i) the entity makes payments of tax under section HL 22 (Payments of tax by portfolio tax rate entity making no election); and
(ii) the portfolio investor rate for the investor for the portfolio calculation period would, in the absence of this paragraph, be more than 0%; and
(iii) the portfolio calculation period includes part of a portfolio investor exit period for the investor
portfolio land company means, for a tax year, a company that—
(a) is not a portfolio investment entity in the tax year; and
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(b) on 80% of the days in the corresponding income year on which the 78 company has property with a market value equal to or more than $100,000, owns property that—
(i) consists of interests in land or shares in a portfolio land company that does not own, directly or indirectly, shares in the company; and
(ii) has a market value equal to or more than 90% of the market value of all the property of the company
portfolio listed company means a company that—
(a) is listed on a recognised exchange in New Zealand or meets the requirements of section HL 12 (Unlisted company may choose to become portfolio listed company); and
(b) has become a portfolio investment entity under section HL 13 (Becoming portfolio investment entity); and
(c) has not ceased to be a portfolio listed company under section HL 12; and
(d) has not ceased to be a portfolio investment entity under section HL 15 (Ceasing to be portfolio investment entity)
portfolio tax rate entity means a company, superannuation fund, or group investment fund that—
(a) has become a portfolio tax rate entity under section HL 13 (Becoming portfolio investment entity); and
(b) has not ceased to be a portfolio tax rate entity under section HL 15 (Ceasing to be portfolio investment entity); and
(c) is not a company listed on a recognised exchange in New Zealand; and
(d) is not a portfolio defined benefit fund
possession includes a use that is in fact or effect substantially exclusive
pre-1983 investments is defined in section HR 3(8) (Definitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds)
pre-1991 budget security means a fixed-rate share, or a debenture to which section FA 2 (Recharacterisation of certain debentures) applies, that—
(a) was itself issued by the company before 8.00 pm New Zealand Standard Time on 30 July 1991 (the specified time), or was issued under a binding contract entered into before the specified time no term of which is altered at any time after the specified time; and
(b) is not a share or debenture any term of which is altered at any time after the specified time, whether under a provision for roll-over or extension or under an option held at the specified time by the shareholder or debenture holder or the company or both or by any other person or otherwise, except when the term is altered under a binding contract entered into before the specified time no term of which is altered at any time after the specified time
pre-imputation income year means an income year that started before the 1987–88 income year
premium,—
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(a) for life insurance,—
(i) means any consideration, however described, payable under a life insurance policy to a life insurer; and
(ii) does not include interest on an unpaid premium:
(b) in sections CR 3, HD 16, HD 17, and YD 8 (which relate to non-resident general insurers), for general insurance or guarantee against risk, means an amount payable in relation to the contract of insurance or guarantee, as applicable, entered into by the insured person:
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(c) in section EZ 8 (Premium paid on land leased before 1 April 1993) and for the purposes of section DZ 9 (Premium paid on land leased before 1 April 1993),—
(i) includes a payment in the nature of a fine, a payment for goodwill attaching to the land, and a payment in consideration of the grant, transfer, or renewal of the lease; and
(ii) does not include rent
premium loading means the amount calculated by a life insurer following the steps in section EY 16(2) (Premium loading: when life insurers providing life insurance at start of income year) or EY 17(2) (Premium loading: when life insurers not providing life insurance at start of income year), as applicable
premium loading formula means the formula in section EY 18(1) (Premium loading formulas) or the formula in section EY 18(2)
prepaid expenditure means expenditure to which section EA 3 (Prepayments) applies
prescribed means—
(a) prescribed by regulations under this Act; or
(b) prescribed by the Commissioner
prescribed amount is defined in section DU 9(4) (Application of sections to resident mining operators)
prescribed interest is defined in section RD 34(3) (Employment-related loans: value using prescribed interest rates) for the purposes of that section
prescribed investor rate, for a person who is an investor in a portfolio tax rate entity and a portfolio allocation period in a tax year, means—
-
(a) 30%, if—
(i) none of paragraphs (b) and (c) applies to the person:
(ii) the person is a resident who derives income as a trustee and chooses to be subject to this paragraph for the tax year; or
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(b) 19.5%, unless paragraph (c) applies to the person, if the person is a resident who had, in either of the 2 income years immediately before the tax year,—
(i) $38,000 or less in taxable income; and
(ii) a total amount of $60,000 or less in taxable income and portfolio investor allocated income after subtraction of portfolio investor allocated loss; or
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(c) 0%, if the person is a resident who—
(i) is an organisation or trust with income that is exempt income under section CW 41 (Charities: non-business income) or CW 42 (Charities: business income):
(ii) is a portfolio investment entity other than a person to whom paragraph (a)(ii) applies:
(iii) is a company:
(iv) is a superannuation fund other than a person to whom paragraph (a)(ii) applies:
(v) derives income as a trustee and does not choose to be subject to paragraph (a) for the tax year:
(vi) is a portfolio investor proxy for the portfolio allocation period
prescribed period is defined in section CU 29 (Other definitions)
prescribed proportion is defined in section CU 29 (Other definitions)
prescribed rate of interest means the rate of interest declared by regulations made under section RA 21(3) (Regulations) to be the rate applying to employment-related loans
price—
(a) is defined in section RD 40(3) (Goods) for the purposes of that section:
(b) is defined in section RD 41(4) (Services) for the purposes of that section:
(c) in sections RD 42 and RD 43 (which relate to goods provided with staff discount), for a registered person who may claim input tax for goods provided to an employee, means the GST-inclusive price
primary producer co-operative company is defined in section CZ 7(4) (Primary producer co-operative companies: 1987–88 income year) for the purposes of that section
principal caregiver is defined in section MC 10 (Principal caregiver) for the purposes of the child tax credit, family assistance credit, family support, in-work payment, and parental tax credit
private domestic worker means a person employed by any other person if—
(a) the employer is the occupier, or 1 of the occupiers, of a dwellinghouse or other premises used exclusively for residential purposes; and
(b) the employment is for the performance of work in or about the dwellinghouse or premises or the garden or grounds belonging to the dwellinghouse or premises; and
(c) the employment is not for a business carried on by the employer or an occupation or calling of the employer; and
(d) the employment is not regular full-time employment
private limitation is defined in section DA 2(2) (General limitations)
private or domestic agreement for the sale and purchase of property is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
private use is defined in section CX 36 (Meaning of private use)
pro rata cancellation, for shares of the same class in a company, means the cancellation of—
(a) all the shares in the class; or
(b) part only of the shares in the class if the cancellation does not alter any person’s voting interest, or market value interest, if a market value circumstance exists at the time in relation to the company, in the company, determined as if no other class of shares existed; or
(c) part only of the shares in the class if the cancellation results from an offer from the company to all shareholders in the class and the resulting cancellation would have met paragraph (b) if each shareholder who received the offer accepted it in full
produce transactions,—
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(a) in section CD 33 (Payments corresponding to notional distributions of producer boards and co-operative companies), subpart HE (Mutual associations), and sections OB 73 and OB 74 (which relate to imputation credit accounts of statutory producer boards), and in the definition of member (paragraph (a)), means transactions that—
(i) are between a statutory producer board and its members; and
(ii) involve the acceptance by the board from its members, in terms of the board’s primary statutory functions, of produce that is trading stock or goods that are trading stock:
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(b) in sections CD 33, OB 78, and OB 79 (which relate to imputation credit accounts of co-operative companies), and in the definition of shareholder (paragraph (c)), means transactions that—
(i) are between a co-operative company and its shareholders; and
(ii) involve the acceptance of produce that is trading stock or goods that are trading stock; and
(iii) are purchases or other acquisitions of the produce or goods by the company from its shareholders, if a principal activity of the company involves the acceptance of such produce or goods from its shareholders:
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(c) in sections CD 33, OB 78, OB 79, and OB 82, and in the definition of shareholder (paragraph (c)), also means transactions that—
(i) are between a co-operative company and its shareholders; and
(ii) involve the supply of produce that is trading stock or goods that are trading stock; and
(iii) are sales or other disposals of the produce or goods by the company to its shareholders, if a principal activity of the company involves the supply of such produce or goods to its shareholders
producer board has the same meaning as statutory producer board
profit is defined in section DB 28(6) (Amount from land affected by change and not already in income) for the purposes of that section
profit-related debenture is defined in section FA 2(4) (Recharacterisation of certain debentures) for the purposes of that section
profit-sharing arrangement means an arrangement under which—
(a) a person (person A) makes specified livestock available, without specifying a fee for doing so, to another person (person B) who carries on a business in which the livestock are used; and
(b) any return or compensation that person A receives for making the livestock available depends on the profits of the business; and
(c) person A participates in the profits and losses of the business; and
(d) if a partnership between person A and person B arises, person A is bound by the requirements of the Partnership Act 1908 for third parties
property,—
(a) in subpart EE (Depreciation), includes consents granted in or after the 1996–97 tax year under the Resource Management Act 1991:
(b) in the financial arrangements rules, and in the definitions of agreement for the sale and purchase, forward contract, right, short-term agreement for sale and purchase, short-term option, and specified option does not include a financial arrangement or foreign exchange:
(c) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
prospecting expenditure—
(a) means expenditure to identify land likely to contain exploitable petroleum deposits or occurrences; and
(b) includes prospecting for petroleum by electrical, geochemical, gravimetric, magnetic, radioactive, seismic, or other geological methods; and
(c) does not include residual expenditure
prospecting permit is defined in section 2 of the Crown Minerals Act 1991
protected family support, for a person, means an amount of family scheme income derived in the way set out in section MD 14 (Person receiving protected family support)
protective right is defined in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section
provisional rate is defined in section EE 67 (Other definitions)
provisional tax means an amount payable as provisional tax under the provisional tax rules
provisional tax rules means the provisions listed in section RC 2 (Provisional tax rules and their application)
public authority—
(a) means every department or instrument of the Executive Government of New Zealand; and
(b) includes the Public Trust and the Maori Trustee
(c) includes the Christmas Island Phosphate Commission, incorporated in Australia by the Christmas Island Agreement Act 1949 of the Parliament of Australia and continued under the Christmas Island Agreement Act 1958; and
(d) is further defined in section CW 38(6) (Public authorities) for the purposes of that section
public entertainer is defined in section CW 19(3) (Amounts derived during short-term visits) for the purposes of that section
public official is defined in section DB 45(4) (Bribes paid to public officials) for the purposes of that section
public unit trust means—
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(a) a unit trust that offers securities to the public under the Securities Act 1978 and that has 100 or more unit holders, treating all associated persons as 1 person, who are—
(i) unit trust managers who hold units in the ordinary course of their activities in relation to the unit trust; or
(ii) persons with an interest of 25% or less in the unit trust, treating all associated persons as 1 person; or
(iii) persons with an interest of 25% or more in the unit trust, treating all associated persons as 1 person, if their interest is 25% or more because of unusual or temporary circumstances, such as the recent establishment or forthcoming termination of the unit trust, and if the unit trust would meet the requirements of any of paragraphs (b), (c), (d), and (e); or
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(b) a unit trust whose unit holders are any 1 or more of the following:
(i) a public unit trust as described in paragraph (a) or this paragraph:
(ii) a group investment fund:
(iii) a life insurance company:
(iv) a superannuation fund:
(v) a unit trust manager, trustee, or person nominated by the manager or the trustee who holds units in the ordinary course of management activities in relation to the unit trust:
(vi) a person with an interest of 25% or less in the unit trust, treating all associated persons as 1 person, if the unit trust offers securities to the public under the Securities Act 1978:
(vii) a person with an interest of 25% or more in the unit trust, treating all associated persons as 1 person, if their interest is 25% or more because of unusual or temporary circumstances, such as the recent establishment or forthcoming termination of the unit trust, and if the unit trust would meet the requirements of any of paragraphs (a), (c), (d), and (e), and if the unit trust offers securities to the public under the Securities Act 1978; or
(c) a unit trust that has less than 100 unit holders if it could reasonably be regarded as a widely-held investment vehicle for direct investment by members of the public despite its number of unit holders or investors; or
(d) a unit trust that has less than 100 unit holders if it has less than 100 unit holders or investors because of unusual or temporary circumstances, such as its recent establishment or forthcoming termination, and if it would otherwise meet the requirements of any of paragraphs (a), (b), (c), and (e); or
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(e) a unit trust that has less than 100 unit holders if it could reasonably be regarded as a vehicle mainly for investment by widely-held vehicles for direct investment that are 1 or more of the following:
(i) unit trusts; or
(ii) group investment funds; or
(iii) life insurance companies; or
(iv) superannuation funds
qualifying asset is defined in section EZ 28 (Meaning of qualifying asset)
qualifying capital value is defined in section EZ 26 (Meaning of qualifying capital value)
qualifying company is defined in section HA 2 (Meaning of qualifying company)
qualifying company election tax means the amount described in section HA 40 (Liability for qualifying company election tax)
qualifying debenture means—
(a) a debenture issued by a forestry company for unpaid purchase money for land bought by the forestry company from the Crown or the Maori owners or a holding company of the forestry company; or
(b) a debenture issued by a forestry company for capitalised interest derived from a debenture described in paragraph (a); or
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(c) a debenture issued by a forestry company for money lent to the forestry company by a holding company for any of the following purposes:
(i) financing expenditure by the forestry company on planting or maintaining trees; or
(ii) meeting administrative overheads, rates, rent, insurance premiums, or other expenses of the same kind; or
(iii) paying interest on money borrowed for the purposes of the forestry business and employed as capital in the business; or
(d) a debenture issued by a forestry company for capitalised interest derived from a debenture described in paragraph (c); or
(e) a debenture issued by a forestry company for capitalised interest derived from a debenture described in paragraph (b) or (d); or
(f) a debenture issued by a Maori investment company to a shareholder of the company or a trustee for a shareholder
qualifying event means—
(a) the extreme climatic conditions that occurred during the month of February 2004 in New Zealand:
(b) the storm event that occurred during the month of July 2004 in the Bay of Plenty area:
(c) any naturally-occurring event that occurs in a later year and—
(i) for which a state of emergency is declared under the Civil Defence Act 1983 or Part 4 of the Civil Defence Emergency Management Act 2002; and
(ii) that the Governor-General by Order in Council declares to be a qualifying event
qualifying foreign equity investor is defined in section CW 12(4) (Proceeds of share disposal by qualifying foreign equity investor) for the purposes of that section
qualifying improvement is defined in section EZ 27 (Meaning of qualifying improvement)
qualifying resident foreign trustee is defined in section 3(1) of the Tax Administration Act 1994
qualifying share premium is defined in section CD 43(28) (Available subscribed capital (ASC) amount) for the purposes of that section
quarantined amount means the amount described in section LK 1(3) (Tax credits relating to attributed CFC income) for the purposes of Part L (Tax credits and other credits)
quarter means a period of 3 consecutive calendar months that ends with the last day of March, June, September, or December
ratio instalment date means an instalment date of a person who uses a GST ratio for a tax year, and is an instalment date for a payment in relation to which no amount of use of money interest or penalties apply other than a late payment penalty or a shortfall penalty
recognised exchange, at any time,—
(a) means a recognised exchange market in New Zealand or anywhere else in the world that at the time has the features described in paragraphs (c) to (e); and
(b) includes a recognised exchange market that at the time is approved for the purposes of this definition by the Commissioner, having had regard to the features described in paragraphs (c) to (e); and
(c) for the purposes of paragraphs (a) and (b), the first feature is that the exchange market brings together buyers and sellers of shares or options over shares; and
(d) for the purposes of paragraphs (a) and (b), the second feature is that the exchange market involves the listing of prices, whether by electronic media or other means, at which persons are willing to buy or sell shares or options; and
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(e) for the purposes of paragraphs (a) and (b), the third feature is that the exchange market provides a medium for the determination of arm’s length prices likely to prove fair and reasonable, having regard to—
(i) the number of participants in the market or having access to the market; and
(ii) the frequency of trading in the market; and
(iii) the nature of trading in the market, including how prices are determined and transactions are effected; and
(iv) the potential or demonstrated capacity of a person or persons significantly to influence the market; and
(v) any significant barriers to entry to the market; and
(vi) any discrimination on the basis of quantity bought and sold unless based on the risks involved, the transaction costs, or economies of scale
redemption payment means the amount by which a payment made on the redemption of a commercial bill by the person who issued it is more than the money lent to the person, issue, in this definition, having the meaning given to it by section 2 of the Bills of Exchange Act 1908
reduced deficit debit is defined in section OC 38 (Meaning of reduced deficit debit) for the purposes of section OC 23 (FDPA breach of FDP ratio by PCA company)
refundable tax credit means—
(a) a tax credit under subpart LB (Tax credits for payments, deductions, and family income assistance):
(b) a tax credit under subpart LF (Tax credits for foreign dividend payment (FDP) credits), excluding section LF 8 (Credits for persons who are non-resident or who receive exempt income):
(c) a tax credit under subpart LO (Tax credits for Maori authority credits):
(d) a tax credit under section HL 22(5) (Payments of tax by portfolio tax rate entity making no election)
registered as a charitable entity means registered as a charitable entity under the Charities Act 2005
registered bank means a registered bank as defined in section 2 of the Reserve Bank of New Zealand Act 1989
registered person is defined in section 2 of the Goods and Services Tax Act 1985
registered security is defined in section 86F of the Stamp and Cheque Duties Act 1971
regulatory value is defined in section FE 20(2) (Financial value and regulatory value) for the purposes of section FE 19 (Banking group’s equity threshold)
reinsurance contract includes—
(a) a cover note:
(b) a renewal of a reinsurance contract
reinvestment profit is defined in section CU 29 (Other definitions)
related activity is defined in section IZ 1(12) (Use of specified activity net losses) for the purposes of that section
related by employment is defined in section EY 11(14) (Superannuation schemes providing life insurance) for the purposes of that section
related company is defined in section GC 5(5) (Leases for inadequate rent) for the purposes of that section
related employer is defined in section RD 51(6) (Calculation of all-inclusive pay) for the purposes of that section
related person is defined in section CD 44(15) to (17) (Available capital distribution amount) for the purposes of that section
relationship agreement, for a person, means—
(a) an agreement for the purpose of Part 6 of the Property (Relationships) Act 1976 that is made on or after 28 July 1983 by the person with another person:
(b) an order under section 25 of the Property (Relationships) Act 1976 that is made by a court on or after 28 July 1983 in relation to the person and another person
relationship period is defined in section MC 11(1) (Relationship periods and entitlement periods) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
relative,—
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(a) in sections CX 19 (Benefits provided instead of allowances), EX 4 (Limits to requirement to include associated person interests), GB 27 (Attribution rule for income from personal services), and the 1988 version provisions, means a person connected with another person by—
(i) being within the second degree of blood relationship to the other:
(ii) being in a marriage, civil union, or de facto relationship with the other:
(iii) being in a marriage, civil union, or de facto relationship with a person who is within the second degree of blood relationship to the other:
(iv) being adopted as a child of the other or as a child of a person who is within the first degree of relationship to the other:
(b) is defined in section HC 36(5) (Trusts and minor beneficiary rule) for the purposes of that section:
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(c) except in the provisions referred to in paragraphs (a) and (b), means a person connected with another person by—
(i) being within the fourth degree of blood relationship to the other:
(ii) being in a marriage, civil union, or de facto relationship with the other:
(iii) being in a marriage, civil union, or de facto relationship with a person who is within the fourth degree of blood relationship to the other:
(iv) being adopted as a child of the other or as a child of a person who is within the third degree of relationship to the other:
(v) being the trustee of a trust under which a relative of the other person has benefited or is eligible to benefit
relevant balance date is defined in section GB 45 (Arrangements involving money not at risk) for the purposes of that section
relevant period is defined in section YC 13(3) (Corporate spin-outs) for the purposes of that section
relinquishment,—
(a) for a petroleum permit, means the abandonment, expiry, forfeiture, revocation, or surrender of the permit otherwise than for a replacement permit; and
(b) for an existing privilege applying to a mining licence under the Petroleum Act 1937, includes the expiry of the initial term without an extension of the initial term or an extension of a specified term
remaining deduction—
(a) is defined in section EJ 4(6) (Expenditure incurred in acquiring film rights in feature films) for the purposes of that section:
(b) is defined in section EJ 5(4) (Expenditure incurred in acquiring film rights in films other than feature films) for the purposes of that section:
(c) is defined in section EJ 8(5) (Film production expenditure for films other than New Zealand films) for the purposes of that section
removal or restoration operations, for a petroleum miner, means removing petroleum mining assets of the kind described in section CT 7(1)(b) or (c) (Meaning of petroleum mining asset), or restoring the site of petroleum mining operations, because of the relinquishment of the petroleum permit relating to the assets or the operations
rent is defined in section GC 5(5) (Leases for inadequate rent) for the purposes of that section
repairs, in sections CC 2 (Non-compliance with covenant for repair) and DB 21 (Amounts paid for non-compliance with covenant for repair), includes painting and general maintenance
replaced area fraction is defined in section DO 9 (Meaning of replaced area fraction and diminished value) for the purposes of sections DO 5 and DO 6 (which relate to horticultural plants)
replacement payment, for a returning share transfer, means a payment to a person of an amount that is—
(a) economically equivalent to a dividend or part of a dividend for an original share:
(b) increased by an imputation credit attached to the payment
replacement permit—
(a) means a petroleum permit obtained in whole or part exchange for another petroleum permit over the same or part of the same area; and
(b) includes a sequential series of replacement permits to the extent to which each permit in the series replaces the previous permit in the series
replacement plant, in sections DO 6, DO 7, and DO 9 (which relate to horticultural plants) means a listed horticultural plant that replaces a listed horticultural plant, whether or not it is of the same type of listed horticultural plant
reporting bank is defined in section FE 4 (Some definitions) for the purposes of subpart FE (Interest apportionment on thin capitalisation)
reporting standard is defined in section DB 35 (Some definitions) for the purposes of section DB 34 (Research or development)
required interest is defined in section LL 9 (Some definitions) for the purposes of subpart LL (Underlying foreign tax credits (UFTC))
research is defined in section DB 35 (Some definitions) for the purposes of sections DB 34, EE 1, EJ 22, and EJ 23 (which relate to deductions and allocation of deductions for development expenditure)
resident foreign trustee is defined in section 3(1) of the Tax Administration Act 1994
resident imputation subgroup has the meaning given in section FN 8(2) (Trans-Tasman imputation groups and resident imputation subgroups)
resident in Australia, for a company, means being resident under section YD 2(1) (Residence of companies) if Australia were treated as being New Zealand for the purposes of that provision
resident in New Zealand and resident of New Zealand have the same meaning as New Zealand resident
resident mining operator is defined in section CU 27 (Meaning of resident mining operator)
resident passive income—
(a) is defined in section RE 2(1) (Resident passive income); and
(b) unless the context otherwise requires, includes RWT required to be withheld under the RWT rules
residential purposes is defined in section CB 18(3) (Residential exclusion from section CB 14) for the purposes of that section
resident’s restricted amalgamation is defined in section FO 3(1) (Resident’s restricted amalgamations) for the purposes of the amalgamation rules
residual expenditure means—
(a) expenditure for which a person is allowed a deduction under section DB 33 (Scientific research):
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(b) expenditure incurred for—
(i) an application fee payable to the Crown for a petroleum permit; or
(ii) insurance premiums, royalties paid under the Petroleum Act 1937 or the Crown Minerals Act 1991, land tax under the Land Tax Act 1976, or rates; or
(iii) a lease of land or buildings; or
(iv) a financial arrangement to which the old financial arrangements rules apply:
(c) interest
residual income tax, for a person and for a tax year, means the positive amount, if any, that remains after subtracting from the person’s income tax liability for the tax year, the following amounts
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(a) the amount of any credit allowed against the income tax liability for tax paid by—
(i) a trustee for the person as a beneficiary; or
(ii) an agent for the person as a principal:
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(b) the amount of any credit allowed against the income tax liability under—
(i) section LB 1 (Tax credits for PAYE income payments):
(ii) section LB 3 (Tax credits for resident withholding tax):
(iii) section LB 5 (Tax credits for non-resident withholding tax):
(iv) section LE 1 (Tax credits for imputation credits):
(v) section LF 1 (Tax credits for FDP credits):
(vi) section LJ 2 (Tax credits for foreign income tax):
(vii) section LK 1 (Tax credits relating to attributed CFC income):
(viii) section LK 6 (Use of tax credits by group companies):
(ix) section LO 1 (Tax credits for Maori authority credits):
(c) the amount of any credit allowed against the income tax liability arising under subpart LP (Tax credits for supplementary dividends), other than through section LP 3(3) (Use of remaining credits):
(d) the amount of a debit balance used to pay income tax under section OE 7 or OP 101 (which relate to the payment of tax by BETA companies or consolidated groups):
(e) the amount of a credit used to pay income tax under section OJ 8 or OJ 18 (which relate to the policyholder base)
resource consent means a resource consent as defined in section 2 of the Resource Management Act 1991
restitution is defined in section DB 44(3) (Restitution of stolen property) for the purposes of that section
retained earnings is defined in section LL 9 (Some definitions) for the purposes of subpart LL (Underlying foreign tax credits (UFTC))
return, for a person’s income, has the same meaning as return of income
return of income means a return of income required under section 33 of the Tax Administration Act 1994
returning share transfer means an arrangement—
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(a) under which—
(i) a share (the original share) listed on an official list of a recognised exchange is transferred from a share supplier to a share user; and
(ii) it is conditionally or unconditionally agreed that the share user or an associated person pays a replacement payment to the share supplier or an associated person, if a dividend is payable on the original share; and
(iii) it is conditionally or unconditionally agreed that the original share or an identical share may be transferred from the share user to the share supplier or an associated person; and
(b) that is not a warrant or instalment receipt
revenue account property, for a person, means—
(a) property that is trading stock of the person; or
(b) property that would produce income for the person if they disposed of it, not including income under section EE 48 (Effect of disposal or event), FA 5 (Assets acquired and disposed of after deduction of payments under lease) or FA 9 (Treatment when lease ends: lessee acquiring asset)
right, in sections EW 32 (Consideration for agreement for sale and purchase of property or services, hire purchase agreement, specified option, or finance lease) and EW 34 (Consideration in foreign currency), and in the definitions of short-term agreement for sale and purchase and short-term option,—
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(a) means—
(i) a right to possess the property; or
(ii) a right to income derived from the property; or
(iii) a right to control or influence the disposal of income derived from the property; or
(iv) a right, directly or indirectly, to make a decision about the property; or
(v) a right, directly or indirectly, to influence a person making a decision about the property; or
(vi) any other right of a substantially similar nature; and
(b) does not include the mere right to enforce an agreement for the sale and purchase of property or services or a specified option
right in the specified property is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
right to take timber includes an easement or licence or right of taking profits or produce from the land to the extent to which the easement, licence, or right relates to timber
ring-fenced tax loss means an amount referred to in section IA 7 (Restrictions relating to ring-fenced tax losses)
rolling average value is defined in section EZ 4(5) (Valuation of livestock bailed or leased as at 2 September 1992) for the purposes of that section
routine government action is defined in section DB 45(4) (Bribes paid to public officials) for the purposes of that section
royalty is defined in section CC 9(2) and (3) (Royalties)
RWT means resident withholding tax and refers to an amount payable as income tax under the RWT rules
RWT exemption certificate means a certificate described in section 32E of the Tax Administration Act 1994
RWT proxy is defined in section 15T of the Tax Administration Act 1994
RWT rules means the provisions listed in section RE 1(1) (RWT rules and their application)
RWT withholding certificate means a form provided under section 25 of the Tax Administration Act 1994
salary or wages—
(a) is defined in section RD 5 (Salary or wages):
(b) is further defined in section RD 65(13) (Employer’s superannuation contributions) for the purposes of that section
schedular income means income of any of the following types
(a) policyholder income under section CR 1(4) (Income of life insurer):
(b) income derived from a mining venture by a non-resident mining operator:
(c) specified living allowances derived by a person in their capacity as a non-resident entertainer if they do not choose to file a return for that income:
(d) category A income derived by a trustee of a group investment fund:
(e) income derived by a portfolio tax rate entity:
(f) non-resident passive income of the kind referred to in section RE 4(4) (Persons who have withholding obligations):
(g) income to which section YD 6 (Apportionment of income from sea transport) applies:
(h) income to which section YD 7 (Apportionment of film rental income) applies:
(i) income to which section YD 8 (Apportionment of premiums derived by non-resident general insurers) applies
schedular income tax liability means the amount determined under section BC 7 (Income tax liability of person with schedular income)
schedular payment is defined in section RD 8 (Schedular payments)
schedular taxable income, for a tax year and a person who has schedular income of a particular kind for the tax year, means the amount of taxable income that the person has in calculating the schedular income tax liability for the kind for the tax year
seal and abandonment means the seal and abandonment of an exploratory well when a petroleum miner files a statutory declaration with the Commissioner stating that the miner has no intention of utilising the well in petroleum mining operations or of applying for a petroleum mining permit in relation to the area in which the well is located
second payment period means the period starting on the 16th day of a month and ending with the last day of the month
section 200 is defined in section CZ 7(4) (Primary producer co-operative companies: 1987–88 income year) for the purposes of that section
secured arrangement,—
(a) in the financial arrangements rules, and in the definitions of security arrangement and security payment, means an arrangement whose non-performance is secured against by a financial arrangement:
(b) is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
security arrangement,—
(a) except in the old financial arrangements rules, means a financial arrangement that secures a party against another person failing to perform the person’s obligations under a secured arrangement:
(b) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
security payment,—
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(a) in the financial arrangements rules, means money received by a party to a security arrangement to the extent to which—
(i) the money is received for a loss incurred because of non-performance of the secured arrangement; and
(ii) the money is income of the party:
(b) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
segment of foreign-sourced income is defined in section LJ 4 (Meaning of segment of foreign-sourced income) for the purposes of Part L (Tax credits and other credits)
selected period is defined in section MF 1(3) (Application for payment of tax credit by instalment) for the purposes of that section
self-assessed adverse event, for a person and a farming, agricultural, or fishing business of the person, means an event that—
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(a) is 1 of the following:
(i) drought, fire, flood, or some other natural event:
(ii) disease or sickness of livestock; and
(b) materially affects the business; and
(c) is described, together with the effect on the business, by the person in a statutory declaration given to the Commissioner
separated person, in section LC 7 (Meaning of housekeeper), subparts MA to MF and MZ (which relate to tax credits for families), and in the definitions of spouse and civil union partner, means a person who is separated and living apart from their spouse or civil union partner, whether under an agreement for separation, or under a court order, or otherwise
services,—
(a) in sections CD 5 (What is a transfer of value?) and EA 3 (Prepayments), means anything that is not goods, money, or a chose in action:
(b) in sections CX 1 (Goods and services tax) and DB 2 (Goods and services tax), means anything that is not goods or money, as each of those terms is defined in section 2 of the Goods and Services Tax Act 1985
settlement, in section FE 2 (When this subpart applies) and subpart HC (Trusts), in the trust rules, and in the definitions of complying trust, disposition of property, foreign trust, and general power of appointment,—
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(a) means—
(i) an act or failure to act on the part of a person that has the effect of making the person a settlor; or
(ii) a transaction or series of transactions that a person enters into and that has the effect of making the person a settlor; and
(b) includes a settlement that a person is treated as making because the person is treated as being a settlor of the settlement
settlement of relationship property is defined in section FB 1(3) (What this subpart does) for the purposes of subpart FB (Transfers of relationship property)
settlor,—
(a) is defined in section HC 27 (Who is a settlor?) for the purposes of section CW 59 (New Zealand companies operating in Niue), subpart YB (Associated persons and nominees), the consolidation rules, the trust rules, and the definition of settlement:
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(b) in sections HC 36 and HC 37 (which relate to minor beneficiaries), has the meaning given in paragraph (a), with the following qualifications:
(i) in section HC 27(2) if the transfer of value is the provision of financial assistance by way of a loan for less than market value, it means loans existing on or after 1 April 2002 for which the interest rate on the amount borrowed is at any time during a tax year less than the interest rate set out in the Income Tax (Fringe Benefit Tax, Interest on Loans) Regulations on 31 March of the previous tax year; and
(ii) in section HC 27(2) the transfer of value does not include the provision of financial assistance by way of a guarantee that was not called on or the provision of security that was not called on; and
(iii) in section HC 27(2) the transfer of value does not include services that are incidental to the operation of the trust, such as bookkeeping or accounting services or those provided in being a trustee
share—
(a) includes any interest in the capital of a company:
(b) includes a debenture to which section FA 2 (Recharacterisation of certain debentures) applies:
(c) includes a unit in a unit trust:
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(d) includes an investor’s interest in a group investment fund if—
(i) the fund is not a designated group investment fund; and
(ii) the interest does not result from an investment from a designated source; and
(iii) the investor’s interest does not result from an investment made in the fund on or before 22 June 1983, including an amount treated as invested at that date as pre-1983 investments under section HR 3(8) (Definitions for section HR 2: group investment funds):
(e) does not include a withdrawable share in a building society, except in the definitions of investment society dividend and withdrawable share:
(f) is further defined in section CE 6 (Meaning of share: when share acquired) for the purposes of sections CE 2 to CE 4 and CE 7 (which relate to share purchase agreements):
(g) is further defined in section DC 15 (Some definitions) for the purposes of sections DC 12 to DC 15 (which relate to share purchase schemes)
share-lending arrangement means an arrangement, entered into on or after 1 July 2006, that is a returning share transfer, and—
(a) the agreed term of the arrangement is 1 year or less; and
(b) the terms and conditions of the arrangement, including the share-lending collateral, are ordinary commercial terms and conditions consistent with those that would apply between parties negotiating at arm’s length; and
(c) the amount of tax calculated under section RE 17 (Replacement payments under share-lending arrangements) for a replacement payment, if any, is paid; and
(d) the share user disposes of the original share or an identical share to the share supplier during the agreed term of the arrangement, or within a further period allowed by the Commissioner; and
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(e) the share user—
(i) agrees to issue, and issues, a credit transfer notice in relation to a dividend paid for the original share:
(ii) establishes and maintains an imputation credit account, if a dividend is payable for the original share during the agreed term of the arrangement
share-lending collateral means an amount, or an adjustment to the amount, that—
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(a) is related to the market value of an original share under a share-lending arrangement, and the amount is paid to a person,—
(i) by a share user or an associated person to secure the transfer of the original share to the share user:
(ii) by a share supplier or an associated person for the re-transfer of the original share or an identical share to them; and
(b) is not a replacement payment
share-lending right means, for a share supplier under a share-lending arrangement, a conditional or unconditional right to acquire the original share or an identical share under the share-lending arrangement
share purchase agreement is defined in sections CE 7 (Meaning of share purchase agreement) and CZ 1 (Share purchase agreement income before 19 July 1968) for the purposes of sections CE 1 to CE 4 (which relate to employment income)
share purchase scheme means a scheme approved for the time being by the Commissioner for the purposes of section DC 12 (Loans to employees under share purchase schemes)
share reorganisation, in the FIF rules and for a person and an attributing interest in a FIF, means an action of the FIF that causes an increase or reduction, other than for consideration, of the attributing interests held by the person, including the person, who holds attributing interests in the FIF immediately before the action
share supplier means a person, described as a share supplier, in the definition of returning share transfer, from whom a share user acquires an original share under a returning share transfer
share user means a person, described as a share user in the definition of returning share transfer, who acquires an original share under a returning share transfer
shareholder—
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(a) includes—
(i) a holder of a share; and
(ii) a member of a company, whether the company’s capital is divided into shares or not:
(b) does not include a holder of a withdrawable share in a building society, except in the definitions of investment society dividend and withdrawable share:
(c) in subparts HA (Qualifying companies (QC) and loss-attributing qualifying companies (LAQC)) and OE (Branch equivalent tax accounts (BETA)) and OJ (Policyholder credit accounts (PDA)), in the FDP rules and the imputation rules, and in the definition of shareholder dividend statement, includes a sharemilker (as defined in section 2 of the Sharemilking Agreements Act 1937), to the extent to which the sharemilker derives payment for produce transactions directly from a co-operative dairy or milk company
shareholder decision-making right means a right, carried by a share issued by a company or an option over a share issued by a company, to vote or participate in any decision-making concerning—
(a) a dividend or other distribution to be paid or made by the company, whether on a liquidation of the company or otherwise, excluding decision-making undertaken by directors acting only in their capacity as directors; or
(b) the constitution of the company; or
(c) a variation in the capital of the company; or
(d) the appointment of a director of the company
shareholder dividend statement means a statement required by section 29 of the Tax Administration Act 1994 to be given by a company to a shareholder to whom is paid a dividend referred to in that section
shareholder-employee,—
(a) in sections EA 4 (Deferred payment of employment income) and EI 9 (Matching rule for employment income of shareholder-employee), means a person who receives or is entitled to receive salary, wages, or other income to which section RD 3(2) to (4) (PAYE income payments) applies:
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(b) in the FBT rules and in section 177A of the Tax Administration Act 1994, means a person who is, in relation to a close company,—
(i) a shareholder in and an employee of the company; and
(ii) a person to whom section RD 3(2) to (4) applies
shareholder FDP ratio is defined in section OC 39 (Meaning of shareholder FDP ratio) for the purposes of sections OC 23 and OC 36 (which relate to FDP credits and debits)
shares of the same class means any 2 or more shares of a company—
(a) that carry the same shareholder decision-making rights; and
(b) that carry the same rights, in terms of priority, amount payable per share, and otherwise, to be paid profits distributed by the company and distributions of assets of the company on a cancellation of its shares; and
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(c) for which either the owner, or the amount paid for the issue, of each share is the same if—
(i) the company gives notice to the Commissioner in a form approved by the Commissioner, that the company chooses to treat the shares as a separate class; and
(ii) the company can at all times from the time of issue of each share identify and distinguish the share from any other shares in the company
shearer means a person who—
(a) undertakes the shearing of sheep, other than in the carrying on of a business by the person; and
(b) is not a person permanently employed on the premises where the shearing shed is situated
shearing shed hand means a person who—
(a) is employed in or about the shearing shed, other than in the carrying on of a business by the person; and
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(b) is not—
(i) a shearer:
(ii) a wool classer:
(iii) a person permanently employed on the premises where the shearing shed is situated
short term agreement for the sale and purchase of property is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
short term trade credit is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
short-term agreement for sale and purchase means an agreement for the sale and purchase of property or services of 1 of the following classes
(a) an agreement under which settlement must take place or the services must be performed on or before the 93rd day after the date on which the agreement is entered into:
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(b) if the date on which the agreement is entered into cannot be established, an agreement under which settlement must take place or the services must be performed on or before the 93rd day after the earlier of—
(i) the date on which the buyer first makes a payment to the seller; and
(ii) the date on which the first right in the property is transferred or the services are performed:
(c) if the agreement is continuous and the seller renders periodic invoices for the property or services, an agreement under which settlement must take place or the services must be performed on or before the 93rd day after the date on which each invoice is rendered
short-term bailment is defined in section EC 27 (Some definitions) for the purposes of subpart EC (Valuation of livestock)
short-term charge facility is defined in section CX 25(3) (Benefits provided by charitable organisations) for the purposes of the FBT rules
short-term option,—
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(a) in the financial arrangements rules, means a specified option of 1 of the following classes:
(i) an option under which settlement must take place or the services must be performed on or before the 93rd day after the date on which the option is entered into:
(ii) if the date on which the option is entered into cannot be established, an option under which settlement must take place or the services must be performed on or before the 93rd day after the earlier of the date on which the buyer first makes a payment to the seller and the date on which the first right in the property is transferred or the services are performed:
(b) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
shortfall penalty is defined in section 3(1) of the Tax Administration Act 1994
sickness, accident, or death benefit fund means a sickness, accident, or death benefit fund that is—
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(a) established for the benefit of—
(i) employees; or
(ii) the members of an incorporated society; or
(iii) the surviving spouses and dependants of those employees or members; and
(b) approved by the Commissioner
significant capital activity, in section DO 1(1)(g) (Enhancements to land, except trees) and schedule 20 (Expenditure on farming, horticultural, aquacultural, and forestry improvements) and in relation to a farming or agricultural business on land in New Zealand,—
(a) means an activity that enables a change in the nature or character of a farming activity from that undertaken on the land immediately before the change; and
(b) excludes an activity that enables a change in the intensity of a farming practice employed in a farming activity on the land
significant financial hardship is defined in section CS 3(2) (Exclusion of withdrawal on grounds of hardship) for the purposes of that section
slice rule means the rule set out in section CD 23(3) (Ordering rule and slice rule) for calculating the amount of available subscribed capital per share
small-business person is defined in section RC 40 (Some definitions) for the purposes of subpart RC (Provisional tax)
social assistance payment is defined in section MA 8 (Some definitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families)
social assistance suspensory loan is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
sound recording is defined in the Copyright Act 1994
source in New Zealand, for income, means a source described in section YD 4 (Classes of income treated as having New Zealand source)
special account means a special home ownership account
special corporate entity means—
(a) a Crown Research Institute:
(b) a group investment fund:
(c) a Life Insurance Fund:
(d) an entity that has not issued shares and is engaged mainly in the business of providing life insurance or other insurance to the public:
(e) a local authority:
(f) a public authority:
(g) a State enterprise:
-
(h) a statutory producer board other than a body that derives only exempt income:
-
(i) any other statutory body that does not issue shares, if—
(i) the statutory body is established by an Act of the Parliament of New Zealand or by a statute of the legislature, whether federal or state or provincial, of any territory outside New Zealand; and
(ii) the Commissioner, having regard to the terms of the statute by which the body is established, is satisfied that it would be appropriate to treat the body as a special corporate entity for the purposes of those provisions of this Act whose application is dependent on the measurement of voting and market value interests:
-
(j) any body incorporated under the Incorporated Societies Act 1908, for an income year in which the body on no day in the income year has shares on issue to the members of the body
special home ownership account means a special home ownership account operated by a person under Part 2 of the Home Ownership Savings Act 1974
special rate is defined in section EE 67 (Other definitions)
specified activity is defined in section IZ 1(12) (Use of specified activity net losses) for the purposes of that section
specified activity net income is defined in section IZ 1(12) (Use of specified activity net losses) for the purposes of that section
specified activity net loss is defined in section IZ 1(12) (Use of specified activity net losses) for the purposes of that section
specified base cost for 1983 income year property means the greater of—
(a) the cost price or acquisition value of the property; and
(b) the market value of the property on the last day of the 1982–83 income year
specified insurance premium is defined in section CX 16(3) (Contributions to life or health insurance)
specified lease means a lease of a personal property lease asset if—
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(a) the lease is entered into in the period starting on 6 August 1982 and ending on 19 May 1999 and the lease has a guaranteed residual value, or has a term of the lease that is more than 36 consecutive months, or has a term of the lease that is the economic life of the asset because the Commissioner considers that the asset has an economic life of less than 36 months, and—
(i) the lessee becomes the owner of the asset at the end of the term of the lease:
(ii) the lessee has the option to repurchase the asset at the end of the term of the lease at a price that the Commissioner considers will be significantly lower than the market value of the asset at the end of the term of the lease:
(iii) the total of all personal property lease payments and the guaranteed residual value is more than or equal to, or to a small extent less than, the cost price of the asset:
(iv) the lessor and the lessee agree that the lessee is liable for the payment of all, or nearly all, expenditure incurred for the costs of repair and maintenance of the asset and any other incidental costs arising during the term of the lease for the use of the asset:
(b) the lease is entered into in the period starting on 6 August 1982 and ending on 19 May 1999 and the lessee acquires ownership of the asset by any means, whether from the lessor or another person:
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(c) the lease is entered into in the period starting on 28 October 1983 and ending on 19 May 1999 and—
(i) a person other than the lessee acquires the asset; and
(ii) the lessee and the person who acquires the asset are associated
specified livestock—
(a) means an animal of a type specified in schedule 17, column 1 (Types and classes of livestock); and
(b) does not include an animal that is high-priced livestock, except as provided in section EC 37 (Bailment)
specified living allowance means—
(a) an income-tested benefit; or
(b) a veteran’s pension; or
(c) New Zealand superannuation; or
(d) a basic grant or an independent circumstances grant, made under regulations made under section 193 of the Education Act 1964, section 303 of the Education Act 1989, or an enactment substituted for those sections; or
-
(e) compensation described in section RD 5(1)(b)(iii) (Salary or wages) if the compensation relates to a day forming part of a continuous period of eligibility for such compensation and the day falls after the earlier of—
(i) the day having the same date as the first day of the continuous period of eligibility for compensation and occurring in the third calendar month after that first day; and
(ii) the last day of the third calendar month after the first day of the continuous period of eligibility for compensation
specified mineral is defined in section CU 28 (Meaning of specified mineral)
specified option,—
-
(a) in the financial arrangements rules,—
(i) means an option to acquire or dispose of property or services; and
(ii) includes an agreement for the sale and purchase of property or services entered into as a result of the exercise of the option:
(b) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
specified period,—
(a) is defined in section EH 36 (Other definitions) for the purposes of the main income equalisation scheme:
(b) is defined in section EH 62 (Other definitions) for the purposes of the adverse event income equalisation scheme:
(c) is defined in section EH 79 (Other definitions) for the purposes of the thinning operations income equalisation scheme
spouse, in section LC 4 (Tax credits for transitional circumstances) and subparts MA to MF and MZ (which relate to tax credits for families), and in the definitions of entitlement period, full-time earner, and separated person, does not include a separated person
spreading method means a method listed in section EW 14(2) (What spreading methods do)
stallion means a stallion that is bloodstock
standard accounting year has the meaning given in section YE 1(4) (References to balance dates and years)
standard balance date has the meaning given in section YE 1(4) (References to balance dates and years)
standard-cost household service means a service that is a standard-cost household service under a determination made by the Commissioner under section 91AA of the Tax Administration Act 1994
standard dividend means a dividend derived from a company by a shareholder in the form of—
(a) money; or
(b) the release of an obligation to repay an amount lent; or
(c) a distribution of property of the company; or
(d) a taxable bonus issue
standard income year is defined in section YE 1(4) (References to balance dates and years)
standard value, for non-specified livestock, means the value set under section EC 29 (Determining standard values)
standing timber includes trees that would be standing timber if they were mature trees
starting date is defined in section LL 3(3) (Meaning of grey list dividend) for the purposes of that section
state enterprise means a person specified in schedule 36 (State enterprises)
statutory producer board means—
(a) a body specified in schedule 37 (Statutory producer boards):
(b) a marketing authority as defined in the Primary Products Marketing Act 1953 that is established by regulations made under that Act:
(c) a primary producer board or marketing board established by an Act
statutory trustee company is defined in section 2 of the Trustee Companies Act 1967
straight-line method, for depreciation, is defined in section EE 67 (Other definitions)
straight-line rate is defined in section EE 67 (Other definitions)
subsidised transport means the provision of transport or an entitlement to transport to an employee by the employer, or by a company (the group company) in the same group of companies as the employer, in a quarter, or an income year if section RD 60 (Close company option) applies, if—
(a) the employer or group company carries on a business consisting of, or including, transporting the public for hire or reward; and
(b) the employer or group company provides the transport or the entitlement to the employee in the course of transporting the public; and
(c) the transport or entitlement is not transport in a motor vehicle; and
(d) the amount, if any, the employee pays is less than the highest amount the employer or group company charges the public, in the quarter or income year in which the provision to the employee occurs, for transport that is equivalent in terms of class, extent, and occasion to the transport or entitlement the employer or group company provides to the employee
subsidy claim form means a form that a listed PAYE intermediary must provide to the Commissioner in an electronic format prescribed by the Commissioner showing,—
(a) the tax file number of the listed PAYE intermediary; and
(b) the tax file number and name of each employer in respect of which a subsidy is claimed; and
(c) the tax file number and name of each employee of each employer in relation to whom a subsidy is claimed under sections RP 4 (Payment of subsidies to certain PAYE intermediaries) and 15M of the Tax Administration Act 1994; and
(d) the period to which the form relates; and
(e) the number of PAYE income payments made by the listed PAYE intermediary to each employee in the period to which the form relates; and
(f) the amount of subsidy that the listed PAYE intermediary claims in respect of the period to which the form relates
substantial business assets is defined in section GB 28(6) (Interpretation of terms used in section GB 27) for the purposes of section GB 27 (Attribution rule for income from personal services)
substituting debenture is defined in section FA 2(5) (Recharacterisation of certain debentures) for the purposes of that section
superannuation category 1 scheme means a scheme or fund that was at the relevant time a superannuation category 1 scheme under the Income Tax Act 1976
superannuation category 2 scheme means a scheme or fund that was at the relevant time a category 2 scheme under the Income Tax Act 1976
superannuation category 3 scheme means a scheme or fund that was at the relevant time a superannuation category 3 scheme under the Income Tax Act 1976
superannuation contribution—
(a) means a disposition of property to or for the benefit of a superannuation scheme in consideration for which fully adequate consideration in money or money’ worth does not pass from the scheme to a person; and
(b) does not include a benefit that may pass from the scheme to a person under the terms of the scheme
superannuation fund—
(a) means a superannuation scheme registered under the Superannuation Schemes Act 1989 or a KiwiSaver scheme that is registered under the KiwiSaver Act 2006; and
(b) for a superannuation fund that is a trust, means the trustees of the fund
superannuation policy is defined in section DZ 2(3) (Life insurers acquiring property before 1 April 1988) for the purposes of that section and section EZ 1 (Life insurers acquiring property before 1 April 1988)
superannuation savings scheme means all the entitlements and tax credits arising under subpart MK (Tax credits for KiwiSaver schemes and complying superannuation funds)
superannuation scheme—
-
(a) means—
(i) a trust or unit trust established by its trust deed mainly for the purposes of providing retirement benefits to beneficiaries who are natural persons or paying benefits to superannuation funds; or
(ii) a KiwiSaver scheme that is registered under the KiwiSaver Act 2006; or
(iii) a company that is not a unit trust, is not resident in New Zealand, and is established mainly for the purpose of providing retirement benefits to members or relatives of members who are natural persons; or
(iv) an arrangement constituted under an Act of the Parliament of New Zealand, other than the Social Security Act 1964, mainly for the purpose of providing retirement benefits to natural persons; or
(v) an arrangement constituted under the legislation of a country, territory, state, or local authority outside New Zealand mainly for the purpose of providing retirement benefits to natural persons; and
(b) for a superannuation scheme that is a trust, means the trustees of the scheme
supplement, for a provision in Part D (Deductions) means to allow a person a deduction without requiring them to satisfy the general permission
supplementary dividend, for a company and for a person deriving a dividend (the first dividend) from the company, means a dividend that—
(a) is paid by the company in the same income year as the first dividend; and
(b) is paid in relation to the first dividend; and
(c) is derived by the person; and
(d) is equal in amount to the tax credit calculated, for the first dividend, under section LP 2(2) (Tax credits for supplementary dividends)
supplementary dividend holding company in relation to a company (the subsidiary), means a company—
(a) that is resident in New Zealand; and
(b) that has notified the subsidiary within the previous 7 years that it is a supplementary dividend company, and has not revoked the notice; and
(c) that has a purpose, in maintaining the notice, of directly or indirectly enabling the payment of a supplementary dividend to a non-resident; and
(d) in which 1 or more voting interests are held by non-residents; and
(e) that derives dividends that are not excluded income or exempt income other than income under sections CW 9 to CW 11 (which relate to income from equity)
supply is defined in section GC 14 (Definitions for sections GC 6 to GC 13) for the purposes of sections GC 6, GC 9 and GC 10 (which relate to transfer pricing arrangements)
tax means income tax, but in the provisions in which the term
“income tax”
has an extended or limited meaning,“tax”
has a corresponding meaningtax account with the Commissioner, for a person, means an account dealing with the person’s transactions with the Commissioner in relation to income tax
tax advantage, in sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage), GB 42 and GB 43 (which relate to Maori authority credit arrangements to obtain a tax advantage) and sections OB 61, OC 28, OD 21, and OK 20 (which relate to memorandum accounts), means—
(a) the allowance, wholly or partly, of a tax credit under section LE 1 (Tax credits for imputation credits):
(b) the allowance, wholly or partly, of a tax credit under section LF 1 (Tax credits for FDP credits):
(c) the obtaining of a refund of FDP under section LF 8 (Credits for persons who are non-resident or who receive exempt income):
(d) the allowance, wholly or partly, of a tax credit under section LO 1 (Tax credits for Maori authority credits):
(e) the arising of a credit to an imputation credit account under sections OB 4 to OB 29 (which relate to credits arising to imputation credit accounts):
(f) the arising of a credit to an FDP account under sections OC 6 to OC 12 (which relate to credits arising to FDP accounts):
(g) the arising of a credit to a Maori authority credit account under sections OK 2 to OK 9 (which relate to credits arising to Maori authority credit accounts)
tax agent means a person—
(a) who prepares the annual returns required to be filed for 10 or more persons; and
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(b) who—
(i) carries on a professional public practice; or
(ii) carries on any business in which annual returns required to be filed are prepared; or
(iii) is the Maori Trustee
tax avoidance includes—
(a) directly or indirectly altering the incidence of any income tax:
(b) directly or indirectly relieving a person from liability to pay income tax or from a potential or prospective liability to future income tax:
(c) directly or indirectly avoiding, postponing, or reducing any liability to income tax or any potential or prospective liability to future income tax
tax avoidance arrangement means an arrangement, whether entered into by the person affected by the arrangement or by another person, that directly or indirectly—
(a) has tax avoidance as its purpose or effect; or
(b) has tax avoidance as 1 of its purposes or effects, whether or not any other purpose or effect is referable to ordinary business or family dealings, if the tax avoidance purpose or effect is not merely incidental
tax-base property is defined in section FC 1(2) (What this subpart does) for the purposes of subpart FC (Distribution, transmission, and gifts of property)
tax code, for an employee, means the employee’s tax code under section 24B of the Tax Administration Act 1994
tax credit—
(a) is defined in section LA 10 (Meaning of tax credit):
(b) is defined in section GA 1(7) (Commissioner’s power to adjust) for the purposes of that section
tax credit advantage—
(a) is defined in section GB 36(5) (Reconstruction of imputation arrangements to obtain tax advantage) for the purposes of that section:
(b) is defined in section GB 43(5) (Reconstruction of Maori authority credit arrangements to obtain tax advantage) for the purposes of that section
tax file number means an identification number that the Commissioner has allocated to a person—
(a) generally for the purposes of this Act; or
(b) specifically for the purpose of the issue to the person of an RWT exemption certificate under section RE 27 (RWT exemption certificates)
tax loss means an amount described in section IA 2(1) (Tax losses)
tax loss component is defined in section IA 2(7) (Tax losses)
tax pooling account means a trust account into which a tax pooling intermediary pays an amount that they receive in their role as intermediary from a person liable to pay provisional tax
tax withheld means an amount of tax paid under the PAYE rules, the RWT rules, the NRWT rules, or regulations made under section 225 of the Tax Administration Act 1994
tax year—
(a) means a period starting on 1 April and ending on 31 March:
(b) is defined in section IW 1(6) (Shortfall penalties) for the purposes of that section
taxable activity,—
(a) in the provisional tax rules, the RWT rules, and the NRWT rules, is defined in section 6 of the Goods and Services Tax Act 1985, except that section 6(3)(d) does not apply:
(b) is defined in section DB 3(3) (Determining tax liabilities) for the purposes of that section
taxable bonus issue means—
(a) a bonus issue in lieu:
(b) a bonus issue that a company chooses to treat as a dividend under section CD 8 (Elections to make bonus issue into dividend):
(c) in the case of a bonus issue made before the enactment of this Act, a bonus issue that the company chose to treat as a dividend under a provision of an earlier Act corresponding to CD 8:
(d) a bonus issue that is a dividend under section CD 10 (Bonus issue by foreign unit trust instead of money or property)
taxable distribution, for a non-complying trust or a foreign trust, is defined in section HC 15(2) (Taxable distributions from non-complying and foreign trusts)
taxable income means taxable income for a tax year calculated under section BC 5 (Taxable income)
taxable Maori authority distribution is defined in section HF 7 (Taxable Maori authority distributions)
taxable period has the meaning given in section 2(1) of the Goods and Services Tax Act 1985
taxable supply has the meaning given in section 2(1) of the Goods and Services Tax Act 1985
taxation law, in sections EZ 52 (References to new rules include old rules), ZA 3 (Transitional provisions), ZA 4 (Saving of binding rulings), and ZA 5 (Saving of accrual determinations),—
(a) is defined in section 3(1) of the Tax Administration Act 1994; and
(b) includes a provision of the Income Tax Act 1994 and the Income Tax Act 2004
taxicab is defined in section 2(1) of the Transport Act 1962
taxpayer means a person who is, or may be, liable to perform or comply with an obligation imposed by this Act
temporary building means—
-
(a) a building that—
(i) is erected under a permit issued by a local authority or a public authority; and
(ii) must be demolished or removed if the local authority or the public authority requires its demolition or removal; or
-
(b) a building that—
(i) is erected at a construction site; and
(ii) is to be demolished or removed on or before the completion of the construction; or
-
(c) a building that—
(i) was erected, and is used, to house specific plant or machinery; and
(ii) will have to be demolished to remove or replace the plant or machinery
ten percent capital reduction is defined in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section
term of the lease—
(a) means the period of time from the date on which a lease starts until it ends:
(b) if the term is indefinite, means the period of time during which the lessee is unable, under the lease, to terminate the lease without incurring a penalty:
(c) if 2 or more consecutive leases are treated under paragraph (d)(v) of the definition of lease as 1 lease of a personal property lease asset, the term of the lease runs from the start of the first term of the lease to the end of the last of the leases:
(d) is defined in section EZ 8(5) (Premium paid on land leased before 1 April 1993) for the purposes of that section
terminal tax means an amount calculated for a tax year under section BC 8 (Satisfaction of income tax liability)
terminal tax date, for a tax year and a person, means the date determined under section RA 13 (Payment dates for terminal tax) for the payment of terminal tax for the tax year; and if the person does not have terminal tax for the tax year, section RA 13 applies as if the person did have terminal tax for the tax year
terminating share means a share in a building society that is included in a group of shares, if the group is to terminate—
(a) at the end of a period specified on the issue of the shares; or
(b) on the attainment of a result specified on the issue of the shares
thinning operations is defined in section EH 79 (Other definitions)
thinning operations deposit is defined in section EH 79 (Other definitions)
thinning operations income equalisation account is defined in section EH 79 (Other definitions)
thinning operations income equalisation scheme means the scheme referred to in section EH 1(2)(c) (Income equalisation schemes)
thinning operations maximum deposit is defined in section EH 78 (Meaning of thinning operations maximum deposit)
timber includes standing timber in—
(a) section EB 24 (Apportionment on disposal of business assets that include trading stock):
(b) section FB 6 (Timber or right to take timber):
(c) section GC 1 (Disposals of trading stock at below market value):
(d) the definition of dispose, paragraph (b):
(e) the definition of right to take timber:
(f) the definition of trading stock, paragraph (b)(iv)
time bar means the provisions of sections 108 and 108B of the Tax Administration Act 1994
time of emigration for an emigrating company, is the time at which the emigrating company becomes a non-resident for the purposes of subpart FL (Emigration of resident companies)
time of the sale, in sections DC 10 (Sale of business: transferred employment income obligations) and EA 4 (Deferred payment of employment income), means the date on which the agreement for sale of the business or part of the business is settled by the exchange of the seller’s business or the part for the buyer’s consideration
total group assets, for a New Zealand group, is defined in section FE 16 (Total group assets) for the purposes of subpart FE (Interest apportionment on thin capitalisation)
total group debt, for a New Zealand group, is defined in section FE 15 (Total group debt) for the purposes of subpart FE (Interest apportionment on thin capitalisation)
total tax credit, for a person, means the total amount of their tax credits under Part L (Tax credits and other credits)
total taxable supplies is defined in section RC 8(8) (GST ratio method) for the purposes of that section and sections RC 11, RC 16, RC 19, and RC 31 (which relate to the calculation and payment of provisional tax using the GST ratio method)
tracking account is defined in section LL 9 (Some definitions) for the purposes of subpart LL (Underlying foreign tax credits (UFTC))
tracking associate is defined in section LL 9 (Some definitions) for the purposes of subpart LL (Underlying foreign tax credits (UFTC))
trade credit is defined in section EZ 48 (Definitions) for the purposes of the old financial arrangements rules
trading stock—
(a) is defined in section EB 2 (Meaning of trading stock) except for the provisions to which paragraphs (b) and (d) apply:
-
(b) in sections CG 6 (Receipts from insurance, indemnity, or compensation for trading stock), FB 13 (Trading stock), and GC 1 to GC 3 (which relate to the sale of trading stock for inadequate consideration),—
(i) includes anything produced or manufactured:
(ii) includes anything acquired for the purposes of manufacture or disposal:
(iii) includes livestock:
(iv) includes timber or a right to take timber:
(v) includes land whose disposal would produce income under any of sections CB 6 to CB 15 (which relate to income from land):
(vi) includes any thing for which expenditure is incurred and which would be trading stock if possession of it were taken:
(vii) does not include a financial arrangement to which the financial arrangements rules or the old financial arrangements rules apply:
(c) is defined in section GC 1 (Disposals of trading stock at below market value) for the purposes of that section:
(d) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
transfer amount is defined in section FB 19(3) (Leased assets) for the purposes of that section
transfer of value—
(a) is defined in section CD 5 (What is a transfer of value?):
-
(b) means a transfer that occurs when—
(i) person A provides money or money’s worth to person B; and
(ii) if person B provides any money or money’s worth to person A as part of the arrangement described in paragraph (a), the market value of what person A provides is more than the market value of what person B provides; and
(c) includes the release of an obligation that person B has to pay money to person A, either by agreement or operation of law; and
(d) transfers value has a corresponding meaning
transfer pricing arrangement is defined in section GC 6(2) (Purpose of rules and nature of arrangements)
transferee—
(a) is defined in section DZ 5(6) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section:
(b) in subpart FB (Transfers of relationship property), for property transferred under a relationship agreement, means the person to whom the property is transferred under the agreement
transferor—
(a) is defined in section CZ 8(2) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section:
(b) is defined in section DZ 5(6) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section:
(c) in subpart FB (Transfers of relationship property), for property transferred under a relationship agreement, means the person from whom the property is transferred under the agreement
transitional resident is defined in section HR 8(2) (Transitional residents)
transitional year, in relation to provisional tax, means the period for which a person files a return under section 39 of the Tax Administration Act 1994
trans-Tasman imputation group means the group described in section FN 8(1) (Trans-Tasman imputation groups and resident imputation subgroups)
trust, in the definitions of superannuation scheme and unit trust, has the meaning given by the Trustee Act 1956
trust rules means—
(a) section CS 18 (Value of loan treated as fund income):
(b) sections DV 1 to DV 7 (which relate to superannuation funds):
(c) section DV 9 (Trusts):
(d) section GB 22 (Arrangements involving trust beneficiary income):
(e) subpart HC (Trusts):
(f) subpart HZ (Terminating provisions):
(g) sections LE 4, LE 5, LF 2, LF 3, and LO 2 (which relate to tax credits for beneficiary minors):
(h) sections 59 and 93B of the Tax Administration Act 1994
trustee,—
-
(a) for a trust,—
(i) means the trustee only in the capacity of trustee of the trust; and
(ii) includes all trustees, for the time being, of the trust:
(b) includes an executor and administrator:
(c) includes the Public Trust:
(d) includes the Maori Trustee:
(e) for a superannuation scheme that is a trust or that is treated by this Act as a trust, includes a person by whom the investments of the scheme, or a part of the scheme, are managed or controlled:
(f) is defined in section DC 15 (Some definitions) for the purposes of sections DC 12 to DC 15 (which relate to share purchase schemes)
trustee income is defined in section HC 7 (Trustee income)
turnover, in subpart EB (Valuation of trading stock (including dealer’s livestock)),—
(a) means the total income that a business derives in an income year as a result of trading by that business; and
(b) does not include the value of closing stock
type, in subparts EC (Valuation of livestock) and FB (Transfers of relationship property), and in the definitions of class and herd livestock, means a category of livestock listed in schedule 17, column 1 (Types and classes of livestock)
UFTC means underlying foreign tax credit
UFTC accounting period, in relation to a person and in relation to a dividend paid by a company, means—
(a) an accounting year of the company, if the person has throughout the accounting year the required interest in the company as described in section LL 9 (Some definitions); and
-
(b) 1 of the following:
(i) the accounting year in which the dividend is paid; or
(ii) the accounting year of the company immediately before the accounting year in which the dividend is paid; or
(iii) an accounting year immediately before another accounting year that is a UFTC accounting period
ultimate owner of a company means a person—
(a) who has an ownership interest in the company calculated under section FE 2 (When this subpart applies); and
(b) in whom no ownership interest is held by a person who holds an ownership interest in the company of 50% or more
ultimate parent is the company described in section FE 34 (Identifying ultimate parent) for the purposes of subpart FE (Interest apportionment on thin capitalisation)
unclassified benefit is defined in section CX 37 (Meaning of unclassified benefit)
unit holder, for a unit trust, means a person who holds a beneficial interest in the property that is subject to the trust
unit trust—
(a) means a scheme or arrangement that is made for the purpose or has the effect of providing facilities for subscribers, purchasers, or contributors to participate, as beneficiaries under a trust, in income and capital gains arising from the property that is subject to the trust; and
-
(b) does not include—
(i) a trust for the benefit of debenture holders:
(ii) the Common Fund of Public Trust:
(iii) a group investment fund established by Public Trust:
(iv) the Common Fund of the Maori Trustee:
(v) a group investment fund established under the Trustee Companies Act 1967:
(vi) a friendly society registered under the Friendly Societies and Credit Unions Act 1982:
(vii) a superannuation fund:
(viii) an employee share purchase scheme:
(ix) a fund that meets the requirements of section CW 45 (Funeral trusts):
(x) any other trust of any specified kind that is declared by the Governor-General, by Order in Council, not to be a unit trust for the purposes of section HD 13 (Unit trusts)
unit trust manager is defined in section CD 16(4) (Certain dividends not increased by tax credits) for the purposes of that section
unlisted trust is defined in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section
unlisted widely-held trust means a widely-held trust the units or interests in which are not quoted on the official list of a recognised exchange
variable principal debt instrument,—
-
(a) in the financial arrangements rules, means a financial arrangement that contemplates that 1 party may, on demand or call,—
(i) advance further amounts to the other party; or
(ii) require the return of all amounts advanced to the other party, if the other party’s rights and obligations under the financial arrangement are expressed in a foreign currency:
(b) in the old financial arrangements rules, is defined in section EZ 48 (Definitions)
venture investment agreement is defined in section CW 13(6) (Proceeds from share or option acquired under venture investment agreement) for the purposes of that section
Venture Investment Fund means the company called New Zealand Venture Investment Fund Limited that is listed in schedules 4, 5, and 6 of the Public Finance Act 1989
veteran’s pension means a veteran’s pension, other than a portable veteran’s pension, paid or payable under—
(a) Part 6 of the War Pensions Act 1954; or
(b) section 70(3)(b) of the Social Security Act 1964; or
voting interest—
(a) means, for a person and a company and a time, the percentage voting interest that the person is treated as holding in the company at the time under sections YC 2 to YC 20 (which relate to the measurement of control and ownership interests):
(b) in subpart HA (Qualifying companies (QC) and loss-attributing qualifying companies (LAQC)), and in the definition of effective interest, is described in section HA 44 (Measuring effective interests):
(c) in section YC 13(4) and (5) (Corporate spin-outs), means, for a person and a company and a time, the percentage voting interest that the person is treated as holding in the company under section YC 2 (Voting interests), as modified by section YC 13(7)
wholly-owned group has the same meaning as wholly-owned group of companies
wholly-owned group of companies is defined in section IC 4(1) (Common ownership: wholly-owned groups of companies)
widely-held company means, at any time, a company that, at the time,—
(a) has no less than 25 shareholders (treating all associated shareholders as 1 person); and
(b) is not a closely-held company
widely-held GIF means a group investment fund that meets the requirements of—
(a) the investor membership requirements in section HL 6(1) (Investor membership requirement), treating the group investment fund as having 1 portfolio investor class comprised of all investors in the fund:
(b) 1 or more of paragraphs (a) and (c) to (e) of the definition of public unit trust, treating the group investment fund as a unit trust
widely-held superannuation fund means a superannuation fund that meets the requirements of—
(a) the investor membership requirements in section HL 6(1) (Investor membership requirement), treating the superannuation fund as having 1 portfolio investor class comprised of all investors in the fund:
(b) 1 or more of paragraphs (a) and (c) to (e) of the definition of public unit trust, treating the superannuation fund as a unit trust
widely-held trust means a unit trust or group investment fund to which 1 of the following applies
(a) it has at least 100 unit-holders or investors, treating all associated persons as 1 person; or
(b) paragraph (a) does not apply to it but it can still reasonably be regarded as a widely-held investment vehicle for direct investment by the public; or
(c) paragraph (a) does not apply to it but only because of unusual or temporary circumstances, such as the fact that it was recently established or is to be terminated; or
(d) paragraph (a) does not apply to it but it can reasonably be regarded as a vehicle mainly for investment by unit trusts, group investment funds, or superannuation funds that are widely-held vehicles for direct investment
wine is defined in section CV 8 (Regulations: Australian wine producer rebate) for the purposes of that section
withdrawable share—
-
(a) means a share in a building society—
(i) that bears a rate of dividend set on the issue of the share and that is redeemable at the end of a fixed term or at the option of the shareholder; or
(ii) that has been issued under section 31A of the Building Societies Act 1965; or
(iii) that is a terminating share; and
(b) does not include a share in a building society that is irredeemable, or redeemable only at the society’s option, on which a dividend is declared and payable from the annual surplus revenue of the building society
withdrawal,—
(a) in subpart CS (Superannuation funds), includes the direct transfer of an amount by a superannuation fund to another superannuation fund or a superannuation scheme:
(b) in section CS 7 (Exclusion of withdrawal when member ends employment), means a withdrawal of amounts, and any return on amounts, contributed to a superannuation fund during the time a member is employed by the employer with whom the member is ending their employment:
(c) in section CS 9 (Exclusion of withdrawal from defined benefit fund when member ends employment), means a withdrawal of amounts, and any return on amounts, contributed to a defined benefit fund during the time a member is employed by the employer with whom the member is ending their employment
withdrawal certificate, for a special account that is a special home ownership account, means a withdrawal certificate as defined in the Home Ownership Savings Act 1974
withdrawal income means withdrawal income as determined under section RZ 7 (Withdrawal income)
withdrawal tax means withdrawal tax imposed by section RZ 8 (Payment and rate of withdrawal tax)
withholding tax limitation is defined in section DA 2(5) (General limitations)
working day means any day of the week other than—
(a) Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, Labour Day, the Sovereign’s birthday, and Waitangi Day; and
(b) a day in the period starting on 25 December in a year and ending on 15 January (both dates inclusive) in the following year
work-related vehicle is defined in section CX 38 (Meaning of work-related vehicle)
year means a 12-month period
year of payment is defined in section LP 2(5) (Tax credits for supplementary dividends) for the purposes of subpart LP (Tax credits for supplementary dividends)
year of transfer, for a relationship agreement, means the income year in which the date of transfer falls
zero-rated portfolio investor, for a portfolio tax rate entity that makes payments of tax under section HL 22 (Payments of tax by portfolio tax rate entity making no election) or HL 24 (Payments of tax by portfolio tax rate entity choosing to make payments when investor leaves) and a portfolio allocation period, means an investor in the entity who has a prescribed investor rate of 0% for the period.
Compare: 2004 No 35 s OB 1
YA 2 Meaning of income tax varied
-
DTA and time bar provisions: ancillary tax
(1) The term income tax includes ancillary tax in—
(a) section BB 3(2) (Overriding effect of certain matters):
(b) section BH 1 (Double tax agreements):
(c) sections 107A to 108B of the Tax Administration Act 1994.
DTA provisions: tax recovery agreements
(2) The term income tax includes a tax that is prescribed in a tax recovery agreement made under Part 10A of the Tax Administration Act 1994 in—
(a) section BB 3(2):
(b) section BH 1.
General tax avoidance provisions: ancillary tax
(3) The term income tax includes ancillary tax, but not excluded ancillary tax, in—
(a) section BB 3(1):
(b) sections BG 1 (Tax avoidance) and GA 1 (Commissioner’s power to adjust):
(c) the definition of tax avoidance.
Modified application of section GA 1
(4) When section GA 1 is applied in the case of an ancillary tax,—
(a) the words taxable income in section GA 1(2) are treated as replaced by the words
“liability to the ancillary tax”
; and
(b) the following paragraph is treated as added to section GA 1(5):
“(e) an amount subject to the ancillary tax”
.
Tax of other countries
(5) The term income tax, when specifically used in relation to tax imposed by another country,—
(a) means a tax of substantially the same nature as income tax imposed under section BB 1 (Imposition of income tax); and
(b) includes a tax, imposed as a collection mechanism for the foreign tax, that is of substantially the same nature as provisional tax, pay-as-you-earn (PAYE), resident withholding tax (RWT), or non-resident withholding tax (NRWT).
UFTC rules
(6) The term income tax includes capital gains tax and branch repatriation tax in subpart LL (Underlying foreign tax credits (UFTC)), except for the definition of fixed-rate share in section LL 9 (Some definitions) and the definition of after-income tax earnings.
FDP, imputation, and BETA rules
(7) The term income tax, in relation to tax that has been paid by a person, includes provisional tax in—
(a) the FDP rules:
(b) the imputation rules:
(c) subpart OE (Branch equivalent tax accounts (BETA)).
Defined in this Act: after-income tax earnings, ancillary tax, BETA, double tax agreement, excluded ancillary tax, FDP rules, fixed-rate share, imputation rules, income tax, NRWT, PAYE, provisional tax, RWT, tax, tax avoidance, taxable income,
Compare: 2004 No 35 ss HG 12(2), IZ 7, MB 12, ME 9(6), MI 10(5), MI 21(5), MK 8(6), NC 20(1), ND 1W(2), NE 7(2), NF 13, NG 17(2), NH 3(7), OB 6
YA 3 Treatment of qualifying company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax
-
Excluded taxes
(1) In the provisions listed in subsection (2), income tax and tax does not include—
(a) qualifying company election tax:
(b) fringe benefit tax (FBT):
(c) foreign dividend payment (FDP) penalty tax:
(d) imputation penalty tax:
(e) withdrawal tax.
Provisions
(2) The provisions are—
(b) sections CB 15(1), CD 19, CF 2, CH 4, CQ 2(1) and (3), CQ 5, CR 1(4) and (5), CU 1 to CU 3, CU 21 to CU 25, CW 1, CW 3 to CW 24, CW 28 to CW 33 (except subsection (1)(c) and (d)), CW 34 to CW 37, CW 40 to CW 56, CW 59, CW 60, CW 64, CZ 2, CZ 5, CZ 16, and CZ 17:
(c) sections DB 1, DB 52, DD 1 to DD 3, DD 10, DN 2, DN 6, DP 8, DP 9, DU 1 to DU 10, DW 3, and DZ 12(1) and (2):
(d) sections EC 17 to EC 19, EC 48, EG 2, EH 28 to EH 33, EH 59, EI 1, EI 7, EI 8, EJ 1, EX 18 to EX 23, EX 25, EX 29 to EX 49, EX 51, EX 58, EX 59, EX 62, EX 64, EX 69, EX 72, EY 42, EY 43, EY 46, EY 48, EZ 17 to EZ 19, EZ 26, EZ 37, EZ 38, and EZ 43:
(e) sections FA 3, FA 12 to FA 18, FM 3 to FM 28, FM 35, FM 36, and FM 38:
(f) sections GB 9 to GB 14:
(g) sections HC 1, HC 4, HC 7, HC 8, HC 10, HC 15 to HC 26, HC 29, HC 31 to HC 37, HD 12, HD 13, HD 16, HD 17, HR 2 to HR 4, and HZ 2:
(h) sections IA 3 to IA 7, and IC 1:
(i) sections LC 1 to LC 9, LC 11, LC 12, LD 1 to LD 3, LK 1 to LK 11, LL 2, LL 9, and LZ 6 to LZ 12:
(j) sections OP 3 to OP 50, OP 64 to OP 77, OP 97 to OP 108, and OP 110 to OP 116:
(k) sections RC 28 to RC 31:
(l) sections YA 2(2)(a) to (c) and (g), YD 2, YD 3, and YD 5 to YD 8:
(m) in the definition of tax avoidance in section YA 1;
(n) sections 31 and 183 of the Tax Administration Act 1994.
Defined in this Act: FBT, FDP penalty tax, imputation penalty tax, income tax, qualifying company election tax, tax, withdrawal tax,
Compare: 2004 No 35 s OB 6(2), (3)
Table Y1 Associated person rules
Subpart YB—Associated persons and nominees
Associated persons
YB 1 What this subpart does
-
Associated person rules and nominee rules
(1) This subpart sets out the rules that—
(a) define when 2 persons are associated persons; and
(b) determine how nominees are treated.
Other references
(2) If a rule in this subpart states that 2 persons are associated persons for 1 or more provisions in this Act, a reference in the relevant provision to persons who are associated with each other includes those persons.
Application stated in sections
(3) Each section in this subpart relating to associated persons states the extent to which the section applies.
Defined in this Act: associated person,
YB 2 Two companies with common control
-
50% or greater common voting interests
(1) Two companies are associated persons if a group of persons exists whose total voting interests in each company are 50% or greater.
50% or greater common market value interests
(2) Two companies are associated persons if—
(a) a market value circumstance exists for either company; and
(b) a group of persons exists whose total market value interests in each company are 50% or greater.
Common control by other means
(3) Two companies are associated persons if a group of persons exists who control both companies by any other means.
Person treated as holding relative’s rights
(4) In the application of this section, a natural person is treated as holding rights held by a relative of the person. Subsections (5) and (9) override this subsection.
No double counting
(5) Despite subsection (4), rights may be counted only once for the purposes of determining whether 2 companies are associated persons.
Exception for certain government entities
(6) This section does not apply to make a company an associated person of another company if the first company is—
(a) a state enterprise:
(b) a Crown Research Institute:
(c) a Crown health enterprise:
(d) a company that is part of the same group of companies as an entity referred to in paragraphs (a) to (c).
Exception for international tax rules
(7) In the international tax rules, except sections CD 45 to CD 52 and CZ 10 (which relate to calculation of attributed repatriation dividends), 2 companies are not associated persons if 1, but not both, is a non-resident.
Application: whole Act
(8) This section applies for the purposes of the whole Act.
Limit on application: relative’s interests
(9) Despite subsection (8), subsection (4) does not apply for the purposes of—
(a) the 1973 version provisions (which relate to taxation of transactions involving land):
(b) the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Defined in this Act: 1973 version provisions, 1988 version provisions, associated person, attributed repatriation, company, control, Crown Research Institute, dividend, group of companies, group of persons, international tax rules, market value circumstance, market value interest, non-resident, relative, state enterprise, voting interest,
Compare: 2004 No 35 ss OD 7(1)(a), (2), (3), OD 8(1)(a), (2), (3)(a)(i), (3A), (4)(a)(i), (6)
YB 3 Two companies with common control: 1988 version provisions
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50% or greater common income interests
(1) Two companies are associated persons if a group of persons exists whose total income interests in each company are 50% or greater.
Modified application of income interest rules
(2) For the purposes of this section in defining an income interest, sections EX 8 to EX 10, EX 13, EX 17, EX 26, and GB 9 to GB 14 (which relate to the calculation of income interests) apply as if—
(a) each reference to a
“CFC”
or“foreign company”
were a reference to a“company”
; and
(b) section YD 2(2) (Residence of companies) were omitted.
Exception for international tax rules
(3) In the international tax rules, except sections CD 45 to CD 52 and CZ 10 (which relate to calculation of attributed repatriation dividends), 2 companies are not associated persons if 1, but not both, is a non-resident.
Application: 1988 version provisions
(4) This section applies for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Defined in this Act: 1988 version provisions, associated person, attributed repatriation, CFC, company, foreign company, group of persons, income interest, international tax rules, non-resident,
Compare: 2004 No 35 s OD 8(3)(a)(ii), (3A)
YB 4 Company and associate’s associate: 1988 version provisions
-
Company and associate’s associate
(1) A company and a person are associated persons if the person is associated with another person who is associated, other than under this section, with the company.
Exception for international tax rules
(2) In the international tax rules, except sections CD 45 to CD 52 and CZ 10 (which relate to calculation of attributed repatriation dividends), 2 companies are not associated persons if 1, but not both, is a non-resident.
Application: 1988 version provisions
(3) This section applies for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Meaning of associated
(4) In this section, the term associated has the meaning that it has for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Defined in this Act: 1988 version provisions, associated person, attributed repatriation, company, dividend, international tax rules, non-resident,
Compare: 2004 No 35 s OD 8(3)(c), (3A)
YB 5 Company and non-corporate 25% interest holder
-
Company and 25% voting interest holder
(1) A company and a person other than a company are associated persons if the person has a voting interest in the company of 25% or more.
Company and 25% market value interest holder
(2) A company and a person other than a company are associated persons if—
(a) a market value circumstance exists for the company; and
(b) the person has a market value interest in the company of 25% or more.
Person treated as holding relative’s rights
(3) In the application of this section, a natural person is treated as holding rights held by a relative of the person. Subsections (4) and (6) override this subsection.
No double counting
(4) Despite subsection (3), rights may be counted only once for the purposes of determining whether a company and a person are associated persons.
Application: whole Act unless other versions apply
(5) This section applies for the purposes of the whole Act except for—
(a) the 1988 version provisions (which are the international tax rules and other miscellaneous rules); and
(b) the 1990 version provisions (which are certain provisions relating to petroleum mining and some other miscellaneous rules).
Limit on application: relative’s interests
(6) Despite subsection (5), subsection (3) does not apply for the purposes of the 1973 version provisions (which relate to taxation of transactions involving land).
Defined in this Act: 1973 version provisions, 1988 version provisions, 1990 version provisions, associated person, company, market value circumstance, market value interest, relative, voting interest,
Compare: 2004 No 35 ss OD 7(1)(b), (2), OD 8(4)(b)(i)
YB 6 Company and relative of 25% interest holder: 1973 version provisions
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Company and relative of 25% voting interest holder
(1) A company and a person other than a company are associated persons if a voting interest in the company of 25% or more is held by—
(a) the person’s spouse, civil union partner, or de facto partner:
(b) the person’s infant child:
(c) the trustee of a trust under which the person, their spouse, their civil union partner, their de facto partner, or their infant child has benefited or is eligible to benefit:
(d) any combination of the person and a person referred to in paragraphs (a) to (c).
Company and 25% market value interest holder
(2) A company and a person other than a company are associated persons if—
(a) a market value circumstance exists for the company; and
-
(b) the market value interest in the company of 25% or more is held by—
(i) the person’s spouse, civil union partner, or de facto partner:
(ii) the person’s infant child:
(iii) the trustee of a trust under which the person, their spouse, their civil union partner, their de facto partner, or their infant child has benefited or is eligible to benefit:
(iv) any combination of the person and a person referred to in subsection (1)(a) to (c).
Application: 1973 version provisions
(3) This section applies for the purposes of the 1973 version provisions (which relate to taxation of transactions involving land).
Defined in this Act: 1973 version provisions, associated person, company, market value circumstances, market value interest, trustee,
Compare: 2004 No 35 s OD 8(4)(b)
YB 7 Company and non-corporate 50% interest holder: 1988 version provisions
-
Company and 50% income interest holder
(1) A company and a person other than a company are associated persons if the person has an income interest in the company of 50% or more.
Modified application of income interest rules
(2) For the purposes of this section in defining an income interest, sections EX 8 to EX 10, EX 13, EX 17, EX 26 and GB 9 to GB 14 (which all relate to the calculation of income interests) apply as if—
(a) each reference to a
“CFC”
or“foreign company”
were a reference to a“company”
; and
(b) section YD 2(2) (Residence of companies) were omitted.
Application: 1988 version provisions
(3) This section applies for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Defined in this Act: 1988 version provisions, associated person, CFC, company, foreign company, income interest,
Compare: 2004 No 35 s OD 8(3)(b)
YB 8 Company and non-corporate 50% interest holder: 1990 version provisions
-
Company and 50% voting interest holder
(1) A company and a person other than a company are associated persons if the person has a voting interest in the company of 50% or more.
Company and 50% market value interest holder
(2) A company and a person other than a company are associated persons if—
(a) a market value circumstance exists for the company; and
(b) the person has a market value interest in the company of 50% or more.
Person treated as holding relative’s rights
(3) In the application of this section, a natural person is treated as holding rights held by a relative of the person. Subsection (4) overrides this subsection.
No double counting
(4) Despite subsection (3), rights may be counted only once for the purposes of determining whether a company and a person are associated persons.
Application: 1990 version provisions
(5) This section applies for the purposes of the 1990 version provisions (which are certain provisions relating to petroleum mining and some other miscellaneous rules).
Defined in this Act: 1990 version provisions, associated person, company, market value circumstance, market value interest, relative, voting interest,
Compare: 2004 No 35 s OD 8(1)(b), (2)(b), (c)
YB 9 Relatives: persons with blood or adoption relationships
-
Fourth degree of relationship
(1) Two persons are associated persons if they are within the fourth degree of blood relationship to each other.
Application: whole Act
(2) Subsection (1) applies for the purposes of the whole Act, except—
(a) the 1973 version provisions (which relate to taxation of transactions involving land); and
(b) the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
1973 version provisions: infant children only
(3) For the purposes of the 1973 version provisions (which relate to taxation of transactions involving land), persons are associated persons because of a blood relationship only if 1 is the infant child of the other.
1988 version provisions: second degree of relationship only
(4) For the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules), persons are associated persons because of a blood relationship only if they are within the second degree of blood relationship.
Treatment of adoption
(5) For the purposes of this section, a child by adoption is treated as a natural child.
Defined in this Act: 1973 version provisions, 1988 version provisions, associated person,
Compare: 2004 No 35 ss OB 1 relative, OD 7(1)(c), OD 8(1)(c), (3)(d), (4)(c)
YB 10 Relatives: person and their spouse or partner
-
Marriage
(1) Two persons are associated persons if they are married.
Civil union
(2) Two persons are associated persons if they are in a civil union.
De facto relationship
(3) Two persons are associated persons if they are in a de facto relationship.
Application: whole Act
(4) This section applies for the purposes of the whole Act.
Defined in this Act: associated person, de facto relationship,
Compare: 2004 No 35 ss OB 1 relative, OD 7(1)(c), OD 8(1)(c), (3)(d), (4)(c)
YB 11 Relatives: person with blood relationship to spouse or partner of other person
-
Fourth degree of blood relationship with spouse
(1) Two persons are associated persons if 1 person is within the fourth degree of blood relationship to the spouse of the other person.
Fourth degree of blood relationship with civil union partner
(2) Two persons are associated persons if 1 person is within the fourth degree of blood relationship to the civil union partner of the other person.
Fourth degree of blood relationship with de facto partner
(3) Two persons are associated persons if 1 person is within the fourth degree of blood relationship to the de facto partner of the other person.
Application: whole Act
(4) Subsections (1) to (3) apply for the purposes of the whole Act, except—
(a) the 1973 version provisions (which relate to taxation of transactions involving land); and
(b) the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
1988 version provisions: second degree of relationship only
(5) For the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules), a person is an associated person because of a blood relationship with the other person’s spouse or partner only if they are within the second degree of blood relationship with the spouse or partner.
Defined in this Act: 1973 version provisions, 1988 version provisions, associated person, civil union partner, de facto partner, spouse,
Compare: 2004 No 35 ss OB 1 relative, OD 7(1)(c), OD 8(1)(c), (3)(d), (4)(c)
YB 12 Trusts: person and trustee for their relative
-
Person and trustee for relative
(1) Two persons are associated persons if 1 person is the trustee of a trust under which any of the following persons associated with the other person has benefited or is eligible to benefit:
(a) a person associated with the other person under section YB 9:
(b) a person associated with the other person under section YB 10:
(c) a person associated with the other person under section YB 11.
Application: whole Act
(2) This section applies for the purposes of the whole Act, except the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Defined in this Act: 1988 version provisions, associated person, trustee,
Compare: 2004 No 35 ss OB 1 relative, OD 7(1)(c), OD 8(1)(c), (3)(d), (4)(c)
YB 13 Trusts: person and trustee for person
-
Person and trustee for person
(1) Two persons are associated persons if 1 person is the trustee of a trust under which the other (the beneficiary) has benefited or is eligible to benefit.
Exception: employee trusts
(2) Subsection (1) does not apply if—
(a) the trust is only for the benefit of employees of an employer; and
(b) neither the beneficiary nor any person associated with the beneficiary directly or indirectly controls the trust.
Application: 1988 and 1990 version provisions
(3) This section applies for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules) and the 1990 version provisions (which are certain provisions relating to petroleum mining and some other miscellaneous rules).
Meaning of associated
(4) In subsection (2)(b), the term associated has the meaning that it has for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Defined in this Act: 1988 version provisions, 1990 version provisions, associated person, trust,
Compare: 2004 No 35 s OD 8(1)(g), (3)(g)
YB 14 Trusts: trusts with common settlor
-
Trusts with common settlor
(1) The trustees of 2 separate trusts are associated persons if the 2 trusts have 1 or more settlors in common.
Application: 1988 and 1990 version provisions
(2) Subsection (1) applies for the purposes of—
(a) the 1988 version provisions (which are the international tax rules and other miscellaneous rules); and
(b) the 1990 version provisions (which are certain provisions relating to petroleum mining and some other miscellaneous rules).
Exception: 1988 version provisions: non-corporate settlor of employee trust
(3) Despite subsection (2), subsection (1) does not apply for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules) if—
(a) the settlor is not a company; and
(b) the settlor settles property on the terms of the trust only for the benefit of employees of the settlor; and
(c) neither the settlor nor any associated person of the settlor directly or indirectly controls the trust.
Exception: 1988 version provisions: corporate settlor of employee trust
(4) Despite subsection (2), subsection (1) does not apply for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules) if—
(a) the settlor is a company; and
(b) the settlor settles property on the terms of the trust only for the benefit of its employees; and
-
(c) none of the following directly or indirectly controls the trust—
(i) the settlor:
(ii) a person associated with the settlor:
(iii) an executive of the settlor:
(iv) a director of the settlor:
(v) a person holding a direct voting interest of 25% or more in the settlor:
(vi) if a market value circumstance exists for the settlor, a person holding a 25% or greater direct market value interest in the settlor.
Meaning of associated
(5) In subsection (3)(c), the term associated person has the meaning that it has for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Defined in this Act: 1973 version provisions, 1988 version provisions, associated person, company, direct market value interest, direct voting interest, employee, market value circumstance, settlor, trustee,
Compare: 2004 No 35 s OD 8(1)(f), (3)(h)
YB 15 Trusts: trustee and settlor: 1988 version provisions
-
Trustee and settlor
(1) Two persons are associated persons if 1 is the trustee of a trust of which the other is a settlor.
Exception: non-corporate settlor of employee trust
(2) Subsection (1) does not apply if—
(a) the settlor is not a company; and
(b) the settlor settles property on the terms of the trust only for the benefit of employees of the settlor; and
(c) neither the settlor nor any associated person of the settlor directly or indirectly controls the trust.
Exception: corporate settlor of employee trust
(3) Subsection (1) does not apply if—
(a) the settlor is a company; and
(b) the settlor settles property on the terms of the trust only for the benefit of its employees; and
-
(c) none of the following directly or indirectly controls the trust—
(i) the settlor:
(ii) a person associated with the settlor:
(iii) an executive of the settlor:
(iv) a director of the settlor:
(v) a person holding a direct voting interest of 25% or more in the settlor:
(vi) if a market value circumstance exists for the settlor, a person holding a 25% or greater direct market value interest in the settlor.
Application:1988 version provisions
(4) This section applies for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Meaning of associated person
(5) In this section, the term associated person has the meaning that it has for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Defined in this Act: 1988 version provisions, associated person, company, direct market value interest, direct voting interest, employee, market value circumstance, settlor, trustee,
Compare: 2004 No 35 s OD 8(3)(i)
YB 16 Partnerships: partnership and partner
-
Partnership and partner
(1) A partnership and a partner in the partnership are associated persons.
Application: whole Act
(2) This section applies for the purposes of the whole Act.
Defined in this Act: associated person,
Compare: 2004 No 35 ss OD 7(1)(d)(i), OD 8(1)(d), (3)(e), (4)(d)
YB 17 Partnerships: partnership and associate of partner
-
Partnership and associate of partner
(1) A partnership and a person associated with a partner are associated persons.
Application: whole Act
(2) This section applies for the purposes of the whole Act.
When associated
(3) In this section, a person is treated as associated with a partner if—
(a) the person is associated with the partner other than under this section; and
(b) for the purposes of the 1973 version provisions (which relate to taxation of transactions involving land), the term associated has the meaning that it has for the purposes of those provisions; and
(c) for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules), the term associated has the meaning that it has for the purposes of those provisions.
Defined in this Act: 1973 version provisions, 1988 version provisions, 1990 version provisions, associated person,
Compare: 2004 No 35 ss OD 7(1)(d)(ii), OD 8(1)(e), (3)(f), (4)(e)
YB 18 Persons habitually acting together: 1988 version provisions
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Persons habitually acting together
(1) Two persons are associated persons if they habitually act together in holding or exercising any of the rights in relation to a foreign company described in section EX 5(1) (Direct control interests).
Only associated concerning specific rights
(2) Despite subsection (1), the 2 persons are treated as associated persons only concerning the right in relation to which they act together.
Application: 1988 version provisions
(3) This section applies for the purposes of the 1988 version provisions (which are the international tax rules and other miscellaneous rules).
Defined in this Act: 1988 version provisions, associated person, foreign company,
Compare: 2004 No 35 s OD 8(3)(j)
YB 19 Person and controlled non-profit organisation: 1990 version provisions
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Person and controlled non-profit organisation
(1) A person and an organisation are associated persons if—
(a) the organisation is 1 of those listed in subsection (2); and
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(b) the organisation is controlled, directly or indirectly, by—
(i) the person:
(ii) a person associated with the person under section YB 9:
(iii) a person associated with the person under section YB 10:
(iv) a person associated with the person under section YB 11.
Relevant organisations
(2) The organisations referred to in subsection (1) are—
(a) an organisation described in section CW 41 (Charities: non-business income):
(b) an organisation described in section CW 44 (Friendly societies):
(c) an organisation described in section DV 8 (Non-profit organisations).
Application: 1990 version provisions
(3) This section applies for the purposes of the 1990 version provisions (which are certain provisions relating to petroleum mining and some other miscellaneous rules).
Defined in this Act: 1990 version provisions, associated person,
Compare: 2004 No 35 s OD 8(1)(h)
YB 20 Some definitions
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1973 version provisions
(1) In sections YB 1 to YB 19, 1973 version provisions (which relate to taxation of transactions involving land) refers to the following provisions, which relate to taxation of land transactions:
(a) sections CB 7 to CB 11 (which relate to certain land transactions), except section CB 8 (Disposal: land used for landfill, if notice of election):
(b) section CB 15 (Transactions between associated persons):
(c) sections FB 3 to FB 5 (which relate to the transfer of land on a settlement of relationship property).
1988 version provisions
(2) In sections YB 1 to YB 19, 1988 version provisions (which are the international tax rules and other miscellaneous rules) refers to the international tax rules and the following provisions:
(a) sections CX 6(1)(b) and CX 7 (which relate to the FBT rules):
(b) section DB 13 (Repayment of debt sold at discount to associate of debtor):
(c) section DS 4 (Meaning of film reimbursement scheme):
(d) section DT 4 (Acquisition of exploratory material):
(e) section EC 10(4)(b) (Restrictions on use of cost price method):
(f) sections EE 40 to EE 43, EE 59, EE 60 and EZ 12 (which relate to depreciation losses):
(g) sections EW 43, EW 49, and EZ 41 (which relate to financial arrangements):
(h) subpart FE (Interest apportionment on thin capitalisation):
(i) section FF 4 (Threshold for application of interest apportionment rule):
(j) section GB 27 (Attribution rule for income from personal services):
(k) sections GB 45 and GB 46 (which relate to arrangements involving money not at risk):
(l) sections GC 6 to GC 14 (which relate to transfer pricing arrangements between associated persons):
(m) section HC 15 (Taxable distributions from non-complying and foreign trusts):
(n) section HD 15 (Asset stripping of companies):
(o) sections HL 6 (Investor membership requirement) and HL 9 (Investor interest size requirement):
(p) sections LJ 1 to LJ 3, LJ 6, and LJ 7 (which relate to tax credits for tax paid outside New Zealand):
(q) subpart LL (Underlying foreign tax credits (UFTC)):
(r) section LP 2 (Tax credits for supplementary dividends):
(s) sections LQ 3, LQ 4, RG 7, YD 7, and YD 8 (which relate to conduit tax relief):
(t) the definitions in section YA 1 (Definitions) of returning share transfer and share-lending arrangement:
(u) section YD 8 (Apportionment of premiums derived by non-resident general insurers).
1990 version provisions
(3) In sections YB 1 to YB 19, 1990 version provisions (which are certain provisions relating to petroleum mining and some other miscellaneous rules) refers to the following provisions:
(a) section CW 12 (Proceeds of share disposal by qualifying foreign equity investor):
(b) section DP 10(3) to (5) (Cost of acquiring timber or right to take timber: other cases):
(c) sections DT 9 to DT 11, DT 15, EJ 16, and GB 20 (which relate to petroleum mining).
Defined in this Act: 1973 version provisions, 1988 version provisions, 1990 version provisions, returning share transfer, share-lending arrangement,
Compare: 2004 No 35 s OD 8(1), (3), (4)
Nominees
YB 21 Transparency of nominees
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Treatment of nominee
(1) In this Act, unless the context otherwise requires, if a person holds something or does something as a nominee for another person, the other person holds or does that thing and the nominee is ignored.
Who is a nominee?
(2) A person holds or does something as a nominee for another person if the person acts on the other person’s behalf. However, a trustee is a nominee only if the trustee is a bare trustee.
Defined in this Act: trustee,
Compare: 2004 No 35 s OD 9
Subpart YC—Measurement of company control and ownership
Control
YC 1 Meaning of control
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Meaning
(1) In this Act, a company is treated as under the control of a group of persons—
(a) whose total direct voting interests in the company are more than 50%:
(b) whose total direct market value interests in the company are more than 50%, if a market value circumstance exists for the company:
(c) who control the company by any other means.
Person treated as holding relative’s rights
(2) In the application of this section, a natural person is treated as holding rights held by a relative of the person.
No double counting
(3) Despite subsection (2), rights may be counted only once for the purposes of determining whether a company is under the control of a group of persons.
Defined in this Act: company, control, direct market value interest, direct voting interest, group, market value circumstance, relative,
Compare: 2004 No 35 s OD 1
Voting and market value interests
YC 2 Voting interests
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Percentage of shareholder decision-making rights
(1) A person’s voting interest in a company equals the percentage of the total shareholder decision-making rights for the company carried by shares or options held by the person.
When decision-making rights vary
(2) Despite subsection (1), if the percentage of shareholder decision-making rights for a company carried by shares or options held by any person differs as between the types of decision-making listed in the definition of shareholder decision-making right, the person’s voting interest in the company equals the average of those differing percentages.
Defined in this Act: company, share, shareholder decision-making right, voting interest,
Compare: 2004 No 35 s OD 3(1), (2)
YC 3 Market value interests
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Percentage of market value
(1) A person’s market value interest in a company equals the percentage of the total market value of shares and options over shares in the company that the market value of shares and options over shares in the company held by the person represents.
Adjustments for options
(2) For the purposes of subsection (1), the market value of any share in a company that is subject to an option is calculated having regard to the terms of the option.
Defined in this Act: company, market value, market value interest, option, share,
Compare: 2004 No 35 s OD 4(1), (2)
YC 4 Look-through rule for corporate shareholders
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When subsection (2) applies
(1) Subsection (2) applies if a company (the shareholder company) is or is treated as having, whether under subsection (2) or otherwise, a voting interest in another company (the issuing company).
Voting interest attributed to shareholders
(2) Each person (the shareholder) who has a voting interest in the shareholder company is treated as having (to be added to any other percentage voting interest in the issuing company which the shareholder has) their portion of the shareholder company’s voting interest in the issuing company and the shareholder company is treated as not having that portion.
Calculation of shareholder’s portion
(3) The shareholder’s portion of the voting interest is calculated by multiplying the shareholder company’s voting interest in the issuing company by the shareholder’s voting interest in the shareholder company.
When subsection (5) applies
(4) Subsection (5) applies if a company (the shareholder company) is or is treated as having, whether under subsection (5) or otherwise, a market value interest in another company (the issuing company).
Attributing market value interest to shareholders
(5) Each person (the shareholder) who has a market value interest in the shareholder company is treated as having their portion of the shareholder company’s market value interest in the issuing company and the shareholder company is treated as not having that portion. The shareholder’s portion is added to any other percentage market value interest in the issuing company which the shareholder has at that time.
Calculation of shareholder’s portion
(6) The shareholder’s portion of the market value interest is calculated by multiplying the shareholder company’s market value interest in the issuing company by the shareholder’s market value interest in the shareholder company.
When subsection (8) applies
(7) Subsection (8) applies if,—
(a) in the case of a company (the first company), no direct market value circumstance exists; but
(b) it is necessary to determine the direct market value interest of a person in the first company in order to apply subsection (5) in relation to an issuing company, whether that issuing company is the first company or any other company, because a direct market value circumstance exists for some other relevant company.
Direct market value interest equal to direct voting interest
(8) The direct market value interest of the person in the first company is equal to the direct voting interest of the person in the first company.
Defined in this Act: company, direct market value circumstance, direct market value interest, direct voting interest, director, market value interest, voting interest,
Compare: 2004 No 35 ss OD 3(3)(d), OD 4(4)
YC 5 Treatment of special corporate entities
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When this section applies
(1) This section applies for the purposes of sections YC 2 to YC 6 to a company that is a special corporate entity.
Company treated as issuing shares
(2) If no shares have been issued by the special corporate entity, it is treated as having issued shares that carry all shareholder decision-making rights and all other rights of ownership in relation to the special corporate entity.
Who is treated as shareholder?
(3) The shares are treated as held by—
(a) the members for the time being of the special corporate entity, if any:
(b) the directors for the time being of the special corporate entity, if no members exist:
(c) in the case of a public authority or state enterprise that has neither members nor directors, the Minister of the Crown for the time being who performs a director’s functions.
Persons also treated as holding related rights
(4) The persons treated under subsection (3) as holding the shares are also treated as holding—
(a) any options over the shares; and
(b) any rights derived from the shares and options, including any interests treated as held under section YC 4.
Shareholders treated as notional single person existing with entity
(5) The members, directors, or Ministers are treated as holding their shares and related rights—
(a) in their capacity as members, directors, or Ministers; and
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(b) as a notional single person that—
(i) exists as long as the special corporate entity exists; and
(ii) holds nothing other than shares and related rights concerning the entity.
Defined in this Act: company, director, public authority, share, special corporate entity, state enterprise,
Compare: 2004 No 35 ss OD 3(3)(a), OD 4(3)(a)
YC 6 Disregarding certain securities
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When this section applies
(1) This section applies for the purposes of sections YC 2 to YC 5 if—
(a) a company has issued an excluded fixed rate security:
(b) an excluded option has been granted in relation to a share in a company:
(c) a company has issued a pre-1991 budget security.
Security treated as not issued or granted
(2) The excluded fixed rate security, excluded option, or pre-1991 budget security is treated as never having been issued or granted.
Holder treated as not holding security
(3) The holder of the excluded fixed rate security, excluded option, or pre-1991 budget security is treated as never having held it.
Credit account continuity provisions: excluded fixed return securities counted
(4) This section is overridden by section YC 19.
Defined in this Act: company, excluded fixed rate security, excluded option, pre-1991 budget security, share,
Compare: 2004 No 35 ss OD 3(3)(c), OD 4(3)(c)
Voting and market value interests: modifications for continuity provisions
YC 7 When sections YC 8 to YC 19 apply
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Sections YC 8 to YC 19 apply to modify sections YC 2 to YC 6 when the continuity provisions are applied.
Defined in this Act: continuity provisions,
Compare: 2004 No 35 s OD 5(1)
YC 8 Death of share or option holder
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If a person acquires a share or option over a share on the death of a person (the deceased person), as a beneficiary or trustee under the will or intestacy, the person is treated as—
(a) having acquired the share or option on the date the deceased person acquired it; and
(b) having held it until the person in fact acquired it.
Defined in this Act: company, share, trustee,
Compare: 2004 No 35 s OD 5(2)
YC 9 Shares or options held by trustees
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Trustees treated as notional single person
(1) All the trustees of a trust holding a share or an option over a share in a company under the trust are treated as the same notional single person that is—
(a) not a company; and
(b) separate and distinct from the trustees in their capacities other than as trustees of the trust.
Exception to subsection (1)
(2) Subsection (1) does not apply if any of the following has a purpose or effect of defeating the intent and application of a continuity provision:
(a) the establishment of the trust:
(b) the termination of the trust:
(c) a change in the trustees of the trust.
Change in ownership of corporate trustee
(3) Subsection (4) applies if—
(a) any share in a company (the first company) or option over a share in the first company is held by a trustee; and
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(b) the trustee is a company other than—
(i) Public Trust:
(ii) any company in which Public Trust holds all voting and market value interests:
(iii) a statutory trustee company; and
(c) any share in the trustee or option over a share in the trustee is disposed of, issued, or granted; and
(d) to the extent to which the disposal, issue, or grant changes the beneficial ownership of the share or option over a share in the first company, unless it can be shown not to have a purpose or effect of defeating the intent and application of any of the continuity provisions.
Trustee treated as disposing of share or option
(4) The trustee is treated as having disposed of the share or option in the first company, at the time of the disposal, issue, or grant, to an unrelated person and having immediately reacquired the share or option.
Avoidance
(5) Section GB 5 (Arrangements involving trust beneficiaries) may apply to treat a share or option held by a trustee as being disposed of at the time of a change in trust beneficiaries.
Defined in this Act: company, continuity provision, market value interest, share, statutory trustee company, trustee, voting interest,
Compare: 2004 No 35 s OD 5(3), (4)
YC 10 Shareholders holding less than 10% direct interests
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When this section applies
(1) This section applies when—
(a) a person has a direct voting interest or direct market value interest of less than 10% in a company (the issuing company), calculated before YC 4, as modified by section YC 11, is applied:
(b) the person is not a company that is associated with the issuing company.
Person’s interest treated as held by notional single person
(2) The person’s direct voting or market value interest is treated as held by a notional single person that—
(a) is not a company; and
(b) exists as long as the issuing company exists; and
(c) holds all interests in the issuing company to which this section applies; and
(d) holds nothing other than voting or market value interests in the company.
Overriding look-through rule for corporate shareholders
(3) This section overrides section YC 4.
Defined in this Act: associated person, company, direct market value interest, direct voting interest, market value interest, shareholder, voting interest,
Compare: 2004 No 35 s OD 5(5)
YC 11 No look-through rule for companies in certain cases
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When this section applies
(1) This section applies when a company (the shareholder company) has, before section YC 4 is applied to that interest, a voting interest or market value interest in another company (the issuing company) and either subsection (2) or (3) applies.
First case: limited attribution company holding less than 50%
(2) The shareholder company—
(a) is a limited attribution company; and
(b) the voting interest or market value interest, when added to any interests which the shareholder company is treated as having under section YC 4, as modified by this section and section YC 10, is less than 50%.
Second case: shareholder not associated and would be attributed less than 10%
(3) A person (the shareholder), who holds a voting or market value interest in the shareholder company, to whom the relevant portion of the voting interest or market value interest would be attributed under section YC 4, assuming section YC 10 does not then apply to the portion,—
(a) is not associated with the issuing company; and
(b) the relevant portion, before adding any other voting or market value interest which the shareholder has or is treated as having, is less than 10%.
Overriding look-through rule
(4) Section YC 4 does not apply to the voting or market value interest of the shareholder company.
Defined in this Act: associated person, company, co-operative company, double tax agreement, limited attribution company, market value interest, shareholder, voting interest,
Compare: 2004 No 35 s OD 5(6)
YC 12 Public unit trusts
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When this section applies
(1) This section applies in relation to a public unit trust if the public unit trust chooses to apply it.
Unit holders treated as notional single person
(2) The unit holders’ shares in the unit trust are treated as held by a notional single person that—
(a) is not a company; and
(b) exists as long as the unit trust exists; and
(c) holds nothing other than the shares in the unit trust.
Treatment of balances carried forward into 2001–02 tax year
(3) Subsection (4) applies if—
(a) a public unit trust exists on the first day of the 2001–02 tax year; and
(b) the public unit trust chose to apply section OD 5(5B) of the Income Tax Act 1994 from the first day of the tax year.
Notional single person treated as always existing
(4) The notional single person is treated as having accumulated and as having always existed in relation to the balances, at the start of the 2001–02 tax year, of the unit trust’s—
(a) imputation credit account:
(b) foreign dividend payment (FDP) account:
(c) loss balances.
Defined in this Act: company, FDP account, imputation credit account, loss balance, public unit trust, share, shareholder, tax year, unit trust,
Compare: 2004 No 35 s OD 4(5A)–(5C)
YC 13 Corporate spin-outs
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When this section applies
(1) This section applies if—
(a) a share in a company (the spun-out company) is transferred or issued to a shareholder in another company (the original parent); and
(b) before the transfer or issue, the original parent is treated, under section YC 11(3), as holding a voting interest or market value interest in another company (the spun-out subsidiary); and
(c) before the transfer or issue, the original parent is treated as holding all voting interests and, if a market value circumstance exists, all market value interests in the spun-out company, assuming seciton YC 4 did not apply to treat the original parent’s interests to be held by others; and
(d) at the time of the transfer or issue, the original parent is a limited attribution company; and
(e) after the transfer or issue, the spun-out company is treated under section YC 11(3) as holding the voting interest or market value interest in the spun-out subsidiary; and
(f) after the transfer or issue, the spun-out company is, at all times during the relevant period described in subsection (3), a limited attribution company.
Overriding look-through rule for spun-out company
(2) Section YC 4 is overridden and the spun-out company is treated as holding the voting interest or market value interest in the spun-out subsidiary—
(a) for the period before the transfer or issue that the original parent was treated as holding the interest; and
(b) for the purposes of applying the continuity provisions from the date of the transfer or issue; and
(c) to the extent to which, immediately after the transfer or issue, a group of persons exists who hold common interests in the original parent and the spun-out company, calculated on the assumption that the only voting interests and market value interests in those companies are those treated as held by those companies under section YC 11(3).
Meaning of relevant period
(3) In subsection (1)(f), relevant period means—
(a) in relation to the offset of a loss under Part I (Treatment of tax losses), the period from the date of the transfer or issue until the last day of the period in which the loss is offset:
(b) in relation to a credit subject to a continuity provision, the period from the date of the transfer or issue until the date the credit is cancelled by a subsequent debit.
Meaning of common interest
(4) In subsection (2)(c), common interest means—
(a) if a market value circumstance does not exist for the original parent or the spun-out company, the common voting interest described in subsection (5):
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(b) if a market value circumstance exists for the original parent but not the spun-out company, the lower of—
(i) the common voting interest described in subsection (5); and
(ii) the market value interest in the original parent:
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(c) if a market value circumstance exists for the spun-out company but not the original parent, the lower of—
(i) the common voting interest described in subsection (5); and
(ii) the market value interest in the spun-out company:
(d) if a market value circumstance exists for the original parent and the spun-out company, the lower of the common voting interest described in subsection (5) and the common market value interest described in subsection (6).
Meaning of common voting interest
(5) In subsection (4), common voting interest, for a person in relation to the original parent and the spun-out company, means—
(a) the percentage voting interest of the person in each company, if the percentages are the same:
(b) the lower of the percentage voting interests of the person in the companies, if the percentages differ.
Meaning of common market value interest
(6) In subsection (4), common market value interest, for a person in relation to the original parent and the spun-out company, means—
(a) the percentage market value interest of the person in each company, if the percentages are the same:
(b) the lower of the percentage market value interests of the person in the companies, if the percentages differ.
Common interests: look-through rules partially overridden
(7) For the purposes of measuring common interests, neither section YB 21 (Transparency of nominees) nor YC 4 apply to treat a nominee’s or company’s voting interest or market value interest in the original parent or the spun-out company to be held by another person, if the interest the other person would be treated as holding would be less than 10%.
Defined in this Act: common interest, common market value interest, common voting interest, company, continuity provision, group of persons, limited attribution company, market value circumstance, market value interest, relevant period, share, shareholder, voting interest,
Compare: 2004 No 35 s OD 5(6A)–(6F)
YC 14 Disregarding concessionary rules
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When this section applies
(1) As the provisions of sections YC 10 to YC 13 are intended to have concessionary effect, subsection (2) applies if—
(a) at a time, for a company and a continuity provision, the requirements of the provision are not met; but
(b) the requirements would have been met but for the application to a particular extent of sections YC 10 to YC 13.
Requirements of continuity provision treated as met
(2) The requirements of the continuity provision are treated as met at the time.
Defined in this Act: company, continuity provision,
Compare: 2004 No 35 s OD 5(7)
YC 15 Directors’ knowledge of failure to meet requirements of continuity provision
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When this section applies
(1) This section applies if—
(a) for a company at a time, the requirements of a continuity provision would not have been met but for the application of section YC 10, YC 11, or both; and
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(b) the failure, but for that concessionary application, to meet the requirements was not due only to—
(i) the sale of shares in a company in the ordinary course of trading on a recognised exchange between less than 10% holders:
(ii) the cancellation of shares in a unit trust, that falls within paragraph (a), (b), or (c) of the definition of widely-held trust, held by less than 10% holders:
(iii) the cancellation of shares in a unit trust, that falls within paragraph (a), (b), or (c) of the definition of widely-held trust, which were acquired from less than 10% holders by the manager or trustee of the unit trust in the ordinary course of their activities in relation to the unit trust; and
(c) the directors of the company know or could reasonably be expected to know, without making enquiries specifically for the purposes of applying the continuity provisions, that the requirements of the continuity provision would not have been met but for that concessionary application.
Requirements of continuity provision treated as not met
(2) The requirements of the continuity provision are treated as not met at the time.
Meaning of less than 10% holder
(3) In this section, less than 10% holder means a person whose direct voting interest or direct market value interest is, at all relevant times, an interest to which YC 10 applies.
Defined in this Act: company, continuity provision, director, less than 10% holder, recognised exchange, share, trustee, unit trust, widely-held trust,
Compare: 2004 No 35 s OD 5(8)
YC 16 Disregarding market value changes
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When this section applies
(1) This section applies if—
(a) for a company at a time, the requirements of a continuity provision are not met; and
(b) the requirements would have been met but for a change in the market value interest of 1 or more persons; and
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(c) the change is solely attributable to—
(i) a change in the market value of the tangible and intangible assets of the company:
(ii) a change in the market value of any 1 or more shares in the company that is not attributable to any change in the terms of those shares:
(iii) a combination of those factors.
Requirements of continuity provision treated as met
(2) The requirements of the continuity provision are treated as met at the time.
Defined in this Act: company, continuity provision, market value, market value interest, share,
Compare: 2004 No 35 s OD 5(9)
YC 17 Demutualisation of insurers
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When this section applies
(1) This section applies if an insurer stops being a special corporate entity as a result of demutualisation.
Former member acquiring voting or market value interest
(2) Subsection (3) applies if—
(a) a person acquires a voting interest or a market value interest in an insurer on the demutualisation of the insurer; and
(b) immediately before the demutualisation, the person was a member of the insurer; and
(c) the interest is acquired solely as a result of that membership.
When person treated as holding interest
(3) With effect from the date of the acquisition but subject to section YC 10, the person is treated as having held the voting interest or market value interest at all times during the period in which the insurer was a special corporate entity.
Trustee for former member acquiring voting or market value interest
(4) Subsection (5) applies if—
(a) a person acquires a voting interest or a market value interest in a life insurer on the demutualisation of the life insurer; and
(b) the person is the trustee of a trust for the benefit of persons who were members of the life insurer immediately before the demutualisation; and
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(c) the trust was established before the demutualisation process—
(i) as an interim holding vehicle pending distribution to the members of all shares held by the trust:
(ii) to exercise voting rights on behalf of the members in relation to any holding company established before the demutualisation process which holds all the shares in the life insurer; and
(d) the Commissioner considers that the trust falls within paragraphs (b) and (c), and has notified the trustee.
When trustee treated as holding interest
(5) With effect from the date of the acquisition, the trustee is treated as having held the voting interest or market value interest at all times during the period in which the life insurer was a special corporate entity.
Application of section YC 10 to interests of former members
(6) Subsection (7) applies if—
(a) subsection (5) applies; and
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(b) the notional single person referred to in section YC 10 acquires a voting interest or market value interest in the life insurer on—
(i) the distribution by the trustee of the shares from the trust:
(ii) the issue of shares by the holding company; and
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(c) the person referred to in section YC 10(1), whose direct voting interest or direct market value interest is treated under YC 10 as that of the notional single person resulting in the notional single person’s interest in the life insurer,—
(i) was a member of the life insurer immediately before the demutualisation, or is a trustee of a trust for the members; and
(ii) acquired the direct voting interest or direct market value interest as a result of the membership.
When notional single person treated as holding interest
(7) With effect from the date of the acquisition, the notional single person is treated as having existed and having held the voting interest or market value interest at all times during—
(a) the period in which the life insurer was a special corporate entity; and
(b) the period of the trust before the acquisition by the notional single person.
Community trust acquiring voting or market value interest
(8) Subsection (9) applies if—
(a) a person acquires a voting interest or a market value interest in an insurer on and solely as a result of the demutualisation of the insurer; and
(b) the person is the trustee of a community trust for the benefit of some or all of a community which generally includes persons who were members of the insurer immediately before the demutualisation; and
(c) the Commissioner considers that the trust falls within paragraph (b) and has notified the trustee.
When trustee treated as holding interest
(9) With effect from the date of the acquisition, the trustee is treated as having held the voting interest or market value interest at all times during the period in which the insurer was a special corporate entity.
Net losses of years before 1992–93
(10) Subsection (11) applies if—
(a) an insurer undergoes demutualisation; and
(b) the insurer, or another company that is part of the same group of companies (the loss company), had a net loss in a tax year before the 1992–93 tax year; and
(c) the loss company carried the loss forward to the 1992–93 tax year under the Income Tax Act 1976; and
(d) the loss has not been offset against net income for any period before demutualisation.
Net loss treated as for 1992–93 tax year
(11) Despite section IZ 5 (Companies’ tax losses for tax years before 1991–92 tax year) for the purposes of Part I (Treatment of tax losses), with effect from the date on which the insurer stops being a special corporate entity on the demutualisation, the loss is treated as having arisen on the first day of the loss company’s 1992–93 tax year and not to have arisen in the earlier tax year.
Credit account credits arising before 1 April 2002
(12) Subsection (13) applies if—
(a) an insurer undergoes demutualisation; and
-
(b) the insurer or another company that is part of the same group of companies has, at the time of the commencement of the process of demutualisation, a credit that arose before 1 April 1992 in—
(i) its imputation credit account:
(ii) its FDP account:
(iii) its branch equivalent tax account.
Credit treated as arising on 1 April 1992
(13) Despite section OZ 4 (Terminating modifications to debits for loss of shareholder continuity), for the purposes of Part O (Memorandum accounts), with effect from the date on which the insurer stops being a special corporate entity on the demutualisation, the credit is treated as having first arisen in the account on 1 April 1992 and not when it actually arose.
Defined in this Act: branch equivalent tax account, community trust, company, direct market value interest, direct voting interest, FDP account, imputation credit account, insurer, life insurer, market value interest, net income, net loss, share, special corporate entity, tax year, trustee, voting interest,
Compare: 2004 No 35 s OD 5A
YC 18 Reverse takeovers
-
When subsections (2) and (3) apply
(1) Subsections (2) and (3) apply if—
(a) a limited attribution company (the initial parent) is treated under section YC 11(3) as holding all ownership interests in another company (the subsidiary); and
(b) a change in the ownership of the initial parent occurs, or the initial parent ends its existence on an amalgamation (the changeover); and
(c) immediately after the changeover, another limited attribution company (the new parent) is treated under section YC 11(3) as holding all ownership interests in the subsidiary; and
(d) immediately after the changeover, all or part of the ownership interests in the new parent are treated under section YC 11(3) as being held by persons (the initial owners) who were treated as holding ownership interests in the initial parent immediately before the changeover; and
(e) in the case of each initial owner, the percentage ownership interest in the initial parent that the initial owner holds immediately before the changeover is the same as the percentage ownership interest in the new parent that the initial owner holds immediately after the changeover.
Loss balance continuity
(2) If the initial owners hold a total of 49% or more of the ownership interests in the new parent immediately after the changeover, the new parent is treated for the purposes of Part I (Treatment of tax losses) as—
(a) holding, immediately after the changeover, the ownership interests in the subsidiary that the initial parent held immediately before the changeover; and
(b) having held the ownership interests for the period for which the ownership interests were treated as held by the initial parent.
Credit account continuity
(3) If the initial owners hold a total of 66% or more of the ownership interests in the new parent immediately after the changeover, the new parent is treated for the purposes of subparts OB, OC, and OP (which relate to imputation credit accounts and FDP credit accounts) as—
(a) holding, immediately after the changeover, the ownership interests in the subsidiary that the initial parent held immediately before the changeover; and
(b) having held the ownership interests for the period for which the ownership interests were treated as held by the initial parent.
When subsection (5) applies
(4) As the provisions of this section are intended to have concessionary effect, subsection (5) applies if—
(a) at a time, for a company and a continuity provision, the requirements of the provision are not met; but
(b) the requirements would have been met but for the application to a particular extent of subsections (2) and (3).
Requirements met
(5) The requirements of the continuity provision are treated as met at the time.
Meaning of ownership interest
(6) In this section, ownership interest, for a company means—
(a) a voting interest in the company as determined under section YC 4(2), if paragraph (b) does not apply:
(b) a market value interest in the company as determined under section YC 4(5), if a market value circumstance exists for the company.
Limited application to changeovers before 3 April 2006
(7) Subsections (2) and (3) apply for a person for a changeover occurring before 3 April 2006 only if, before that date, the person files a return of income on the basis that the requirements of a continuity provision are satisfied in relation to the company and the changeover.
Defined in this Act: amalgamation, company, continuity provisions, limited attribution company, market value circumstance, market value interest, ownership interest, return of income, voting interest,
Compare: 2004 No 35 s OD 5AA
YC 19 Legislative conversion of foreign company of proprietors
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When this section applies
(1) This section applies if—
(a) a company of proprietors is established by a statute of a legislature outside New Zealand; and
(b) the company of proprietors becomes a limited liability company as a result of another statute.
Proprietor acquiring voting or market value interest
(2) Subsection (3) applies if—
(a) a person acquires a voting interest or a market value interest in a company on the conversion of a company of proprietors; and
(b) immediately before the conversion, the person was a proprietor of the company of proprietors and the person acquired the interest solely as a result of being a proprietor.
Company and person treated as always having held interest
(3) With effect from the date of acquisition but subject to section YC 10,—
(a) the company of proprietors is treated as having been a company with shareholders at all times before the conversion; and
(b) the person is treated as having held the voting interest or market value interest at all times before the conversion.
Defined in this Act: company, market value interest, New Zealand, shareholder, voting interest,
Compare: 2004 No 35 s OD 5B
YC 20 Credit account continuity provisions: excluded fixed rate securities
-
When this section applies
(1) This section applies for the purposes of the credit account continuity provisions.
Counting excluded fixed rate securities
(2) Section YC 6 applies as if—
(a) section YC 6(1)(a) were omitted; and
(b) each other reference to
“excluded fixed rate security”
were omitted.
Relationship with section YA 1
(3) Section YA 1 (Definitions) applies as if—
(a) paragraph (e) of the definition of excluded option were omitted; and
(b) in paragraphs (a), (b), and (f) of the definition of market value circumstance, the words
“an excluded fixed rate security”
were replaced by“a”
.
Defined in this Act: credit account continuity provisions, excluded fixed rate security,
Compare: 2004 No 35 s OD 6
Subpart YD—Residence and source in New Zealand
Residence
YD 1 Residence of natural persons
-
What this section does
(1) This section contains the rules for determining when a person who is not a company is a New Zealand resident for the purposes of this Act.
Permanent place of abode in New Zealand
(2) Despite anything else in this section, a person is a New Zealand resident if they have a permanent place of abode in New Zealand, even if they also have a permanent place of abode elsewhere.
183 days in New Zealand
(3) A person is a New Zealand resident if they are personally present in New Zealand for more than 183 days in total in a 12-month period.
Person treated as resident from first of 183 days
(4) If subsection (3) applies, the person is treated as resident from the first of the 183 days until the person is treated under subsection (5) as ceasing to be a New Zealand resident.
Ending residence: 325 days outside New Zealand
(5) A person treated as a New Zealand resident only under subsection (3) stops being a New Zealand resident if they are personally absent from New Zealand for more than 325 days in total in a 12-month period.
Person treated as non-resident from first of 325 days
(6) The person is treated as not resident from the first of the 325 days until they are treated again as resident under this section.
Government servants
(7) Despite subsection (5), a person who is personally absent from New Zealand in the service, in any capacity, of the New Zealand Government is treated as a New Zealand resident during the absence.
Presence for part-days
(8) For the purposes of this section, a person personally present in New Zealand for part of a day is treated as—
(a) present in New Zealand for the whole day; and
(b) not absent from New Zealand for any part of the day.
Special concession for transitional residents
(9) Subsection (10) applies if a person would have become a transitional resident under section HR 8 (Transitional residents) on a particular day (the notional date) in the absence of the rule in subsection (2).
No application for preceding 12 months
(10) Subsection (2) does not apply to the person for the period of 12 months ending before the notional date.
Defined in this Act: company, New Zealand resident, transitional resident,
Compare: 2004 No 35 s OE 1
YD 2 Residence of companies
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Four bases for residence
(1) A company is a New Zealand resident for the purposes of this Act if—
(a) it is incorporated in New Zealand:
(b) its head office is in New Zealand:
(c) its centre of management is in New Zealand:
(d) its directors, in their capacity as directors, exercise control of the company in New Zealand, even if the directors’ decision-making also occurs outside New Zealand.
International tax rules
(2) Despite subsection (1), for the purpose of the international tax rules, a company is treated as remaining resident in New Zealand if it becomes a foreign company but is resident in New Zealand again within 183 days afterwards.
Cook Islands National Superannuation Fund trustee
(3) Despite subsection (1), the trustee of the Cook Islands National Superannuation Fund, established by the Cook Islands National Superannuation Fund Deed under the Cook Islands National Superannuation Scheme Act 2000 (Cook Islands), is not a New Zealand resident.
Defined in this Act: company, director, foreign company, New Zealand resident,
Compare: 2004 No 35 ss GC 9(6), OE 2(1), (1B)
YD 3 Country of residence of foreign companies
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When this section applies
(1) This section applies for the purposes of the international tax rules to determine the country in which a foreign company is treated as resident for an accounting period.
Liability to income tax
(2) The company is treated as resident in a country if, at any time during the accounting period, it is liable to income tax in the country because any of the following is located in the country—
(a) its domicile:
(b) its residence:
(c) its place of management:
(d) any other criterion of a similar nature.
Further rule: first application
(3) Subsection (4) applies if the application of subsection (2) for an accounting period means that—
(a) the company is resident in 2 or more countries:
(b) the company is not resident in any country.
Applying New Zealand rules
(4) The company is treated as resident in the country in which—
(a) it is incorporated:
(b) it has its head:
(c) it has its centre of management:
(d) its directors, in their capacity as directors, exercise control of the company, even if the directors’ decision-making also occurs outside the country.
Further rule: second application
(5) The company is treated as resident in the country in which its centre of management is located for the accounting period if no 1 country of residence is identified under subsection (4).
Final rule
(6) The Commissioner must determine the country of residence if no 1 country of residence is identified under subsection (5).
Defined in this Act: accounting period, Commissioner, company, director, foreign company, international tax rules,
Compare: 2004 No 35 s OE 2(2)–(6)
Source
YD 4 Classes of income treated as having New Zealand source
-
What this section does
(1) This section lists the types of income that are treated as having a source in New Zealand for the purposes of this Act.
Business in New Zealand
(2) Income derived from a business has a source in New Zealand if—
(a) the business is wholly carried on in New Zealand:
(b) the business is partly carried on in New Zealand, to the extent to which the income is apportioned to a New Zealand source under section YD 5.
Contracts made or performed in New Zealand
(3) Income derived by a person from a contract has a source in New Zealand if the contract is—
(a) made in New Zealand, except to the extent to which the person wholly or partly performs the contract outside New Zealand, and the income is apportioned to a source outside New Zealand under YD 5:
(b) made outside New Zealand but the person wholly or partly performs the contract here, to the extent to which the income is apportioned to a New Zealand source under section YD 5.
Personal services in New Zealand
(4) An amount that is income under section CE 1 (Amounts derived in connection with employment) has a source in New Zealand if the amount is earned in New Zealand, even if the employer is not a New Zealand resident.
Accident compensation payments
(5) An accident compensation payment as defined in section CF 1(2) (Benefits, pensions, compensation, and government grants) has a source in New Zealand.
Pensions
(6) The following amounts have a source in New Zealand:
(a) a pension or annuity payable by the government of New Zealand:
(b) a pension or annuity payable out of a superannuation scheme established in New Zealand:
(c) a gratuitous payment, within the definition of pension in section CF 1(2), if the services are provided in New Zealand.
Income from land owned in New Zealand
(7) Income derived by a person as the owner of land in New Zealand has a source in New Zealand.
Income from use in New Zealand of personal property
(8) Income, other than a royalty, derived as consideration for the use of, or right to use, personal property in New Zealand has a source in New Zealand if the income is—
(a) paid by a New Zealand resident:
(b) paid by a non-resident, and for which the non-resident is allowed a deduction.
Royalties
(9) A royalty has a source in New Zealand if it is—
(a) paid by a New Zealand resident and not made in connection with a business they carry on outside New Zealand through a fixed establishment outside New Zealand:
(b) paid by a non-resident, and for which the non-resident is allowed a deduction.
Dividends
(10) Income derived from shares in, or membership of, a company resident in New Zealand has a source in New Zealand.
Income from debt instruments
(11) The following amounts have a source in New Zealand—
(a) interest or a redemption payment derived from money lent in New Zealand:
-
(b) interest or a redemption payment derived from money lent outside New Zealand—
(i) to a New Zealand resident, unless the money is used by them for the purposes of a business they carry on outside New Zealand through a fixed establishment outside New Zealand:
(ii) to a non-resident, if the money is used by them for the purposes of a business they carry on in New Zealand through a fixed establishment in New Zealand:
(c) income from securities issued by the government of New Zealand:
(d) income derived from debentures issued by a local authority or public authority:
(e) income derived from a mortgage of land in New Zealand.
Income from disposal of New Zealand property
(12) Income derived from the disposal of property situated in New Zealand has a source in New Zealand.
Beneficiary income
(13) Income derived by a beneficiary from a trust has a source in New Zealand to the extent to which the income of the trust fund has a source in New Zealand.
Income from air transport
(14) Income derived from transporting people or property by air has a source in New Zealand if the transportation leaves from New Zealand.
Income from sea transport
(15) Income derived from transporting people or property by sea has a source in New Zealand if the transportation leaves from New Zealand to the extent to which the income is apportioned to a New Zealand source under section YD 6.
Non-resident general insurers
(16) A premium for general insurance paid to a non-resident general insurer of the type described in section YD 8 has a source in New Zealand to the extent set out in section YD 8(2).
Non-resident life insurers: policies in New Zealand
(17) Income of a non-resident life insurer calculated under section EY 48 (Non-resident life insurers with life insurance policies in New Zealand) has a source in New Zealand.
Any other source in New Zealand
(18) Income derived directly or indirectly from any other source in New Zealand has a source in New Zealand.
Defined in this Act: accident compensation payment, amount, business, company, debentures, deduction, dispose, employer, fixed establishment, general insurance, income, interest, life insurer, local authority, money lent, New Zealand, New Zealand resident, non-resident, pay, pension, public authority, redemption payment, royalty, share, source in New Zealand, superannuation scheme,
Compare: 2004 No 35 s OE 4(1)
YD 5 Apportionment of income derived partly in New Zealand
-
When this section applies
(1) This section applies when—
(a) a person carries on business partly in New Zealand and partly outside New Zealand; or
(b) a contract is made in New Zealand and is performed, in whole or in part, by a person outside New Zealand; or
(c) a contract is made outside New Zealand and is performed, in whole or in part, by a person in New Zealand.
Apportionment
(2) The amount of income derived from the business or under the contract, and the amount of expenditure incurred in deriving the income, must be apportioned between New Zealand and sources outside New Zealand to the extent necessary to achieve the result in subsection (3).
Necessary effect of apportionment
(3) The result of the apportionment must be that the person’s net income or net loss, in relation to the business or contract, is the same as a separate and independent person would have if they were carrying out only the person’s activities in New Zealand and dealing at arm’s length.
Defined in this Act: amount, business, gross, income, net loss, New Zealand,
Compare: 2004 No 35 s FB 2
YD 6 Apportionment of income from sea transport
-
When this section applies
(1) This section applies when a non-resident derives an amount of income from transporting people or property by sea from New Zealand to a destination outside New Zealand.
Five percent from source in New Zealand
(2) Five percent of the amount is treated as having a source in New Zealand and the remainder of the amount is treated as not having a source in New Zealand.
Reduction by Commissioner
(3) Despite subsection (2), the Commissioner may reduce the amount that is treated as having a source in New Zealand to the extent to which the country in which the non-resident is resident would treat an amount derived by a New Zealand resident from sea transport from that country as—
(a) not having a source in that country:
(b) otherwise as exempt from income tax in that country.
No deduction
(4) The non-resident is denied a deduction under section DW 3 (Non-resident general insurers, shippers, and film renters) for expenditure or loss incurred.
Intervening stop in New Zealand
(5) The transport of people or property from a port in New Zealand is treated as transport to a place outside New Zealand even if the ship calls at another New Zealand port before leaving New Zealand.
Defined in this Act: amount, Commissioner, income, income tax, New Zealand resident, non-resident,
Compare: 2004 No 35 ss FC 18, FC 19
YD 7 Apportionment of film rental income
-
When this section applies
(1) This section applies if a non-resident person derives an amount that would be treated as having a source in New Zealand under section YD 4 from 1 or more of the following activities
(a) renting, exhibiting, or issuing a film or making other arrangements for its exhibition:
(b) selling or hiring film containers, cinematographic or photographic materials, or equipment or accessories relating to a film:
(c) selling or hiring advertising materials relating to a film.
Income and exempt income
(2) Despite section YD 4, 10% of the amount is treated as having a source in New Zealand and the remainder of the amount is treated as not having a source in New Zealand.
Agreement with other non-resident
(3) If the non-resident person is required under an agreement with another non-resident person (person A) to pay person A an amount that is a film rent, royalty, commission, or that arises from an amount derived by the non-resident person from the activities, the amount paid to person A is treated as not having a source in New Zealand.
No deduction
(4) The non-resident is denied a deduction under section DW 3 (Non-resident general insurers, shippers, and film renters) for expenditure or loss incurred.
Insignificant proportion
(5) This section does not apply to a non-resident person if the amounts derived by them for the activities are an insignificant proportion of the total amounts derived by them from a business carried on in New Zealand or elsewhere.
Defined in this Act: amount, arrangement, business, exempt income, film, income, New Zealand, non-resident, royalty, source in New Zealand,
Compare: 2004 No 35 s FC 21
YD 8 Apportionment of premiums derived by non-resident general insurers
-
When this section applies
(1) This section applies if—
(a) a premium is paid under a contract of insurance; and
(b) the insurance is of 1 of the types listed in subsection (4); and
(c) when the insurer derives the premium, they are a non-resident; and
(d) the premium is not attributable to a business of the insurer which they carry on in New Zealand through a fixed establishment in New Zealand; and
(e) the premium is treated as connected with New Zealand under any of the tests of connection in subsection (5); and
(f) subsection (6) does not apply to override subsection (5).
Ten percent of premium from source in New Zealand
(2) Ten percent of the gross premium is treated as having a source in New Zealand and the remainder of the gross premium is treated as not having a source in New Zealand.
Special rules
(3) The following provisions apply in relation to taxation of the 10% amount
(a) the insurer is denied a deduction for expenditure or loss incurred, under section DW 3 (Non-resident general insurers, shippers, and film renters):
(b) sections HD 16 (Non-resident general insurers) and HD 17 (Agent paying premiums to residents of Switzerland) apply to impose certain obligations in relation to payment of income tax and provision of tax returns and other information.
Types of insurance
(4) The types of insurance referred to in subsection (1)(b) are—
(a) general insurance:
-
(b) a guarantee against risk given by an insurer to an insured person if—
(i) the insured person is liable to pay a premium to the insurer for the guarantee; and
(ii) the insured person is associated with the insurer:
-
(c) a guarantee against risk given by an insurer to an insured person if—
(i) the insured person is liable to pay a premium to the insurer for the guarantee; and
(ii) the risk arises from money lent to the insured person; and
(iii) the amounts the insured person is liable to pay for the money are significantly less than they would otherwise have been because of the guarantee; and
(iv) the effect of the guarantee on the amounts payable is more than an incidental effect, or comes about as more than an incidental purpose, of the insurer’s giving the guarantee.
Connection with New Zealand
(5) The premium is connected with New Zealand if—
(a) the insurance contract from which the premium is derived is offered or entered into in New Zealand:
(b) the insured person is resident in New Zealand:
(c) the insured person is a non-resident but enters into the insurance contract for the purposes of a business they carry on in New Zealand through a fixed establishment in New Zealand.
No connection if all risk offshore
(6) Despite subsection (5), the premium is treated as not connected with New Zealand if—
(a) all risk covered by the premium is located outside New Zealand; and
(b) the insurer deriving the premium is not associated with the insured person.
Defined in this Act: business, fixed establishment, general insurance, insurance, insurance contract, insured person, insurer, pay, source in New Zealand,
Compare: 2004 No 35 ss FC 13, FC 14(1)
Conduit tax relief companies: special residence rules
YD 9 Residence of CTR company shareholders
-
When these sections apply
(1) The rules in this section and sections YD 10 and YD 11 apply only for the purposes of applying the conduit tax relief provisions in sections LQ 3 to LQ 5, OD 16, OD 22, RG 7, YD 10(3) and YD 11(4) (which relate to credits and payments for conduit tax relief).
Associated CFC or non-complying trust treated as resident
(2) A non-resident is treated as resident in New Zealand if the non-resident is—
(a) associated with the conduit tax relief (CTR) company; and
(b) a controlled foreign company (CFC) or the trustee of a non-complying trust.
CTR holding companies and group members treated as non-resident
(3) A company resident in New Zealand holding shares in a CTR company is treated as not resident in New Zealand if it is—
(a) a CTR holding company for the CTR company; or
(b) a CTR group member for the CTR company, but only to the extent described in subsection (4).
Limitation to treatment of group member as non-resident
(4) A CTR group member is treated as not resident in New Zealand for the percentage of its direct voting interest, direct market value interest, and entitlement to derive dividends that is equal to the total percentage of direct voting interests, or direct market value interests if market value circumstances exist, referred to in section YD 11(4).
Defined in this Act: associated person, CFC, company, CTR company, CTR group member, CTR holding company, direct market value interest, direct voting interest, dividend, market value circumstance, non-complying trust, non-resident, resident in New Zealand, share, trustee,
Compare: 2004 No 35 s OE 8
YD 10 Meaning of CTR holding company
-
What is a CTR holding company?
(1) A company is a CTR holding company, in relation to a CTR company in which it holds shares, if the requirements of subsections (2) to (5) are each met.
CTR company
(2) The company must itself be a CTR company.
Direct ownership by single non-resident
(3) A single person not resident in New Zealand must have—
(a) 100% of the direct voting interests in the CTR holding company; and
(b) 100% of the direct market value interests in the CTR holding company, if a direct market value circumstance exists at the relevant time for the CTR holding company.
Owning 10% or more of CTR company
(4) The company must itself have—
(a) a 10% or greater direct voting interest in the CTR company; and
(b) a 10% or greater direct market value interest in the CTR company, if a direct market value circumstance exists at the relevant time for the CTR company.
Notice to CTR company
(5) The company must have previously given, and have not revoked, a notice to the CTR company that it is to be a CTR holding company for the CTR company.
Nominal shareholding
(6) In the application of subsection (3), a nominal shareholding held by a person solely to comply with company law requirements is disregarded.
CFC or non-complying trust
(7) Despite subsection (3), a company is not a CTR holding company if the single person is a CFC or the trustee of a non-complying trust.
Defined in this Act: CFC, company, CTR company, CTR holding company, direct market value circumstance, direct market value interest, direct voting interest, non-complying trust, resident in New Zealand, share, trustee,
Compare: 2004 No 35 s OE 7(1), (2)
YD 11 Meaning of CTR group member
-
What is a CTR group member?
(1) A company resident in New Zealand is a CTR group member, in relation to a CTR company in which it holds shares, if the requirements of subsections (2) to (4) are each met.
CTR company
(2) The company must itself be a CTR company.
Direct ownership of CTR company
(3) The company must have, in the CTR company,—
(a) a 100% direct voting interest; and
(b) a 100% direct market value interest, if a market value circumstance exists at the time for the CTR company.
Direct or indirect interest in group member
(4) One or more non-residents have a direct voting interest, or a direct market value interest if a market value circumstance exists at the time for the group member, in—
(a) the CTR group member:
-
(b) another member of the same wholly-owned group of companies that—
(i) is resident in New Zealand; and
(ii) has a 100% voting interest and, if a market value circumstance exists, a 100% market value interest, in the CTR company.
Nominal shareholding
(5) For the purposes of subsections (3) and (4), a nominal shareholding held by a person solely to comply with company law requirements is disregarded.
No application of look-through rules
(6) In the application of subsection (4)(b), the look-through rules in section YC 4(2) and (5) (Look-through rule for corporate shareholders) do not apply to treat the other member’s interests as held by others.
Associated CFC or non-complying trust treated as resident
(7) For the purposes of subsection (4), a non-resident is treated as resident in New Zealand if the non-resident is—
(a) associated with the company or the CTR company; and
(b) a CFC or the trustee of a non-complying trust.
Defined in this Act: associated person, CFC, company, CTR company, CTR group member, direct market value interest, direct voting interest, market value circumstance, non-complying trust, non-resident, resident in New Zealand, share, trustee,
Compare: 2004 No 35 s OE 7(3)–(5)
Subpart YE—References to balance dates and years
YE 1 References to balance dates and years
-
When this section applies
(1) This section applies for the purposes of the Act unless the context requires otherwise.
Tax year identified by 2 years
(2) A reference to a tax year that is identified by a reference, in full or short form, to 2 years is a reference to the tax year that—
(a) starts on 1 April in the earlier of those years; and
(b) ends on 31 March in the later of those years.
Income year identified by 2 years
(3) A reference to an income year that is identified by a reference, in full or short form, to 2 years is a reference to the corresponding income year for the tax year that a reference to the same 2 years would identify.
Standard balance date or accounting years
(4) A reference to a person with a standard balance date, a standard accounting year, or a standard income year is a reference to a person who files a return of income under section 33 of the Tax Administration Act 1994 for a tax year on the basis of a corresponding income year also ending on 31 March.
Non-standard balance date, accounting year, or income year
(5) A reference to a person with a non-standard balance date, non-standard accounting year, or non-standard income year is a reference to a person who has approval under section 38 of the Tax Administration Act 1994 to file a return of income for a tax year on the basis of a corresponding income year ending other than 31 March. Unless the context requires otherwise, the non-standard year is the accounting year that corresponds to the tax year for which the reference is made.
Early balance date
(6) A reference to a person with an early balance date is a reference to a person who has approval under section 38 of the Tax Administration Act 1994 to file a return of income for a tax year on the basis of a corresponding income year that ends in a date between 1 October and the following 31 March, both days inclusive. Unless the context requires otherwise, the year with the early balance date is the accounting year that corresponds with the tax year for which the reference is made.
Late balance date
(7) A reference to a person with a late balance date is a reference to a person who has approval under section 38 of the Tax Administration Act 1994 to file a return of income for a tax year on the basis of a corresponding income year that ends in a date between 1 April and the following 30 September, both days inclusive. Unless the context otherwise requires, the year with the late balance date is the accounting year that corresponds with the tax year in relation to which the reference is made.
Defined in this Act: accounting year, corresponding income year, early balance date, income year, late balance date, non-standard accounting year, non-standard balance date, non-standard income year, return of income, standard accounting year, standard balance date, standard income year,
Compare: 2004 No 35 s OF 1
Subpart YF—Currency conversion
YF 1 General rules for currency conversion
-
When this section applies
(1) This section applies when—
(a) an amount is paid or payable in a currency other than New Zealand currency; and
(b) a provision in this Act requires the amount to be taken into account in New Zealand currency, whether expressly or by necessary implication; and
(c) this Act does not contain a specific currency conversion rule that applies to the conversion of the amount into New Zealand currency.
Use of spot exchange rate
(2) The amount must be converted into New Zealand currency by applying the close of trading spot exchange rate on the date at which the amount is required to be measured or calculated.
Alternative use of average or monthly rates
(3) Despite subsection (2), the amount may be converted into New Zealand currency by applying the average of the close of trading spot exchange rates for the 15th day of each complete month that falls in the relevant period if—
(a) the Commissioner allows it:
(b) the conversion is 1 of the types listed in subsection (4).
Particular cases in which monthly average rate permitted
(4) The following are the particular cases in which use of a monthly average rate is permitted, subject to any specific additional requirements set out in the relevant provision
(a) section EX 21(4) (Branch equivalent income or loss: calculation rules):
(b) section EX 49(8) (Accounting profits method):
(c) section EX 51(7) (Comparative value method):
(d) section EX 53(11) (Fair dividend rate method: usual method):
(e) section EX 54(13) (Fair dividend rate for entities that value investors’ units):
(f) section EX 55(15) (Deemed rate of return method).
Defined in this Act: amount, close of trading spot exchange rate, Commissioner, New Zealand, pay,
Subpart YZ—Terminating provisions
YZ 1 Source rule for interest
-
Application from 29 July 1983
(1) Section YD 4(11)(a) and (b) (Classes of income treated as having New Zealand source) applies to—
(a) interest derived from money lent under a binding contract entered into on or after 29 July 1983:
-
(b) a redemption payment made on a commercial bill if—
(i) it was issued on or after 29 July 1983; and
(ii) it was not issued under a binding contract entered into before that date.
Meaning of issue
(2) In this section, issue has the meaning given in section 2 of the Bills of Exchange Act 1908.
Defined in this Act: commercial bill, interest, money lent, redemption payment,
Compare: 2004 No 35 s OE 4(1A)
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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