Income tax imposed by section BB 1 (Imposition of income tax) of the Income Tax Act 2007 must, for the 2022–23 tax year, be paid at the basic rates specified in schedule 1 of that Act.

This Part amends the Income Tax Act 2007.

In section AA 1(a), replace “net income” with “a net amount of income”.

In section AA 1, list of defined terms,—

After section CB 6A(1A), insert:

In section CB 6A(2B), replace “person.” with “person (see also: section FC 9 (Residential land transferred to executor, administrator, or beneficiary on death of person).”

In section CB 6A(5B), replace “acquired subsequent to” with “converted subsequent to”.

In section CB 6A(5B), replace “the date the joint tenancy was acquired” with “the same as prior to the conversion”.

In section CB 6A(5C), replace “acquired subsequent to” with “converted subsequent to”.

In section CB 6A(5C), replace “the date the tenancy in common in equal shares was acquired” with “the same as prior to the conversion”.

Replace section CB 6A(5D) with:

Replace section CB 6AB(1), (2), and (3) with:

After section CB 6AB(2)(b), insert:

In section CB 6AB(4), replace “If a person transfers the same land to themselves in a different capacity, and there is no intervening transfer to a third party,” with “If a person in 1 capacity transfers land to themselves in a different capacity,”.

In section CB 6AB(4), delete “, and must not be to or from a person in their capacity of settlor, beneficiary, or trustee”.

Repeal section CB 6AB(5)(a).

Replace section CB 6AB(5)(d) with:

After section CB 6AB(6)(a), insert:

Replace section CB 6AB(6)(c) with:

Replace section CB 6AC(1), (2), and (3) with:

Repeal section CB 6AC(4)(a).

In section CB 6AC(5), delete “, under section HF 2(3)(e)(i) (Who is eligible to be a Maori authority?)”.

Repeal section CB 16A(7).

After section CD 1(2), insert:

In section CD 1, list of defined terms, insert “company”, “double tax agreement”, “DRCD deferral date”, “New Zealand resident”, and “resident in New Zealand”.

In section CD 14(1), replace “(Treatment of emigrating companies and their shareholders)” with “or FL 3 (which relate to the treatment of emigrating companies and their shareholders)”.

In section CD 14(2), after “section FL 2”, insert “or FL 3, as applicable”.

In section CD 15(1)(a), after “dividend”, insert “subject to any limitation to the imputation credit made under section LE 5 where the person is a beneficiary”.

Subsection (1) applies for the 2008–09 and later income years.

In section CD 26(1)(b), replace “(Treatment of emigrating companies and their shareholders)” with “or FL 3 (which relate to the treatment of emigrating companies and their shareholders)”.

In section CD 36(2),—

After section CD 36(3), insert:

Subsection (1) applies for income years starting on or after 1 July 2014.

Subsection (2) applies for income years starting on or after 1 April 2023.

In section CD 43(16), replace “(Treatment of emigrating companies and their shareholders)” with “or FL 3 (which relate to the treatment of emigrating companies and their shareholders)”.

Replace section CE 1(3B), other than the heading, with:

In section CE 1, list of defined terms, insert “cross-border employee”.

After section CE 1E, insert:

After section CE 1F(3), insert:

In section CE 1F, list of defined terms, insert “double tax agreement”.

In section CQ 5(1)(c)(viii), delete “purchase”.

In section CQ 5, list of defined terms, insert “employee share scheme”.

In section CR 4(1)(a)(i), after “Appendix D”, insert “or IFRS 17”.

Replace section CR 4(3)(a)(ii) with:

In section CR 4, list of defined terms, insert “IFRS 17” and “present value (gross)”.

Subsections (1), (2), and (3) apply for income years starting on or after 1 January 2023.

In section CV 12, replace “section HC 8” with “section HC 8(2)”.

Subsection (1) applies for the 2022–23 and later income years.

After section CW 3, insert:

Replace the heading to section CW 10(1) with “Exempt income: dividends within wholly-owned groups”.

Replace section CW 10(1)(a) with:

In section CW 10(1)(e), replace “met.” with “met; and”.

After section CW 10(1)(e), insert:

After section CW 10(1), insert:

In section CW 10, list of defined terms, insert “amount”, “double tax agreement”, “fully imputed”, “New Zealand resident”, “New Zealand tax”, and “shareholder”.

After section CX 1(b), insert:

In section CX 9, after “employee”, insert “, unless section CX 19C or CX 19D applies”.

Subsection (1) applies to fringe benefits provided on or after 1 April 2023.

In section CX 10(2)(b), replace “a share purchase scheme” with “an exempt ESS”.

In section CX 10, list of defined terms,—

After section CX 19B, insert:

Subsection (1) applies to fringe benefits provided on or after 1 April 2023.

In section CX 26, insert—

In section CX 26, list of defined terms, insert “New Zealand” and “resident”.

In section CX 35(2)(b), replace “a share purchase scheme” with “an exempt ESS”.

In section CX 35, list of defined terms, insert “exempt ESS”.

In section CX 47(1)(a), replace “or a public authority” with “, a public authority, or a public purpose Crown-controlled company”.

In section CX 47, list of defined terms, insert “public purpose Crown-controlled company”.

In section CX 57B(1),—

After section CZ 23, insert:

Subsection (1) applies to payments made on or after the beginning of the relevant North Island flooding event.

After section CZ 24, insert:

Subsection (1) applies to payments made on or after the beginning of the relevant North Island flooding event.

After section CZ 29, insert:

After section CZ 39(1), insert:

In section CZ 39(5B), replace “acquired subsequent to” with “converted subsequent to”.

In section CZ 39(5B), replace “the joint tenancy was acquired” with “was the person’s bright-line acquisition date for the land prior to the conversion”.

In section CZ 39(5C), replace “acquired subsequent to” with “converted subsequent to”.

In section CZ 39(5C), replace “the tenancy in common was acquired” with “was the person’s bright-line acquisition date for the land prior to the conversion”.

In section CZ 39(7), replace “person.” with “person (see also: section FC 9 (Residential land transferred to executor, administrator, or beneficiary on death of person).”

Replace section CZ 39(5D) with:

After section DB 2(2), insert:

Replace section DB 53(1)(b) with:

In section DB 53, list of defined terms, insert “zero-rated investor”.

After section DB 67, insert:

Subsection (1) applies for the 2008–09 and later income years. However, subsection (1) does not apply for an income year before the 2024–25 income year if the person has—

Repeal section DD 11, definition of business premises.

In section DF 1(1)(a), replace “or a public authority” with “, a public authority, or a public purpose Crown-controlled company”.

In section DF 1(1B), replace “or public authority” with “authority, public authority, or public purpose Crown-controlled company”.

In section DF 1(3)(a), replace “or public authority” with “authority, public authority, or public purpose Crown-controlled company”.

In section DF 1, list of defined terms, insert “public purpose Crown-controlled company”.

After section DG 5(2)(c), insert:

In section DG 5, list of defined terms, insert “beneficiary”, “disallowed residential property”, and “interposed residential property holder”.

Replace section DG 11(1)(b) with:

In section DG 11, list of defined terms, delete “beneficiary”, “disallowed residential property”, and “interposed residential property holder”.

In section DH 6(2)(a)(i), replace “DH 4(1) to (3)” with “DH 4”.

Repeal section DH 6(2)(a)(ii).

In the heading to section DH 7(2), replace “balance” with “principal”.

Repeal section DH 9.

In section DH 10(6)(e), replace “under section DH 7(4) against the notional loan principal” with “under section DH 7(4), other than against the notional loan principal,”.

Replace the heading to section DH 12(2) with “Other property”.

In section DN 6(1)(c)(viii), delete “purchase”.

In section DN 6, list of defined terms, insert “employee share scheme”.

In section DW 4(1)(a)(i), after “Appendix D”, insert “, or IFRS 17”.

In section DW 4(4)(a)(i), after “year)”, insert “, if none of subparagraphs (ii), (iii), and (iv) applies”.

In section DW 4(4)(a)(ii), replace “insurer:” with “insurer; or”.

After section DW 4(4)(a)(ii), insert:

In section DW 4(4B), formula, replace “risk margin” with “risk adjustment”.

In section DW 4(4C)(c),—

In section DW 4, list of defined terms, insert “IFRS 17” and “present value (gross)”.

Subsections (1), (2), (3), (4), (5), (6), and (7) apply for income years starting on or after 1 January 2023.

After section EE 6(2), insert:

In section EE 6, list of defined terms, insert “utilities distribution asset”.

Subsections (1) and (2) apply for the 2008–09 and later income years. However, subsections (1) and (2) do not apply for an income year before the 2024–25 income year, if the person has—

Before section EE 7(g), insert:

In section EE 7, list of defined terms, insert “utilities distribution asset” and “utilities distribution network”.

Subsections (1) and (2) apply for the 2008–09 and later income years. However, subsections (1) and (2) do not apply for an income year before the 2024–25 income year if the person has—

In section EE 31(1), replace “(Treatment of emigrating companies and their shareholders)” with “or FL 3(2) (which relate to the treatment of emigrating companies and their shareholders)”.

After section EW 15B(4), insert:

In section EW 15B, list of defined terms, insert “Commissioner”, “expenditure”, “income year”, “life financial reinsurance”, “life insurer”, and “reinsurance contract”.

Subsections (1) and (2) apply for income years starting on or after 1 January 2023.

Replace section EW 15D(3)(a) with:

In section EW 24(3), replace “Section EW 26 sets out” with “Sections EW 26 and HM 35(8)(c) (Determining net amounts and taxable amounts) set out”.

Subsection (1) applies to the 2023–24 and later income years.

In section EW 46C(6), definition of nominal shares, replace “a share purchase scheme” with “an exempt ESS”.

In section EW 46C, list of defined terms, insert “exempt ESS”.

After section EW 46C, insert:

Replace section EX 20B(3)(c) with:

Subsection (1) applies for income years starting on or after 1 April 2023.

In section EX 20C(10)(b), after “of the CFC”, insert “, other than a deductible foreign equity distribution (the distribution) to the extent to which the distribution is funded directly or indirectly from an attributing interest that is an income interest in a FIF meeting the requirements of section EX 59(1),”.

Subsection (1) applies for income years starting on or after 1 April 2023.

In section EX 38(1)(f), replace “a employee share scheme” with “an employee share scheme”.

In section EX 46(10),—

Replace section EX 52(5), other than the heading, with:

Subsection (1) applies for income years starting on or after 1 July 2014.

Replace section EX 53(5), other than the heading, with:

Subsection (1) applies for income years starting on or after 1 July 2014.

In section EX 59(1B)(b), replace “(ii).” with “(ii); and”.

After section EX 59(1B)(b), insert:

Subsections (1) and (2) apply for income years starting on or after 1 July 2014.

In section EY 24(2)(a)(i), before “the amount”, insert “if subparagraphs (ii), (iii), and (iv) do not apply,”.

In section EY 24(2)(a)(ii), replace “IBNR liability” with “liability for claims incurred but not reported” in each place.

After section EY 24(2)(a)(ii), insert:

In section EY 24(3), formula,—

In section EY 24(4)(a), replace “life risk claims incurred” with “life risk claims incurred but not reported”.

In section EY 24(4)(c),—

After section EY 24(4), insert:

In section EY 24, list of defined terms, insert “GST”, “IFRS 17”, “life insurance policy”, “life reinsurance policy”, “outstanding claims reserve”, and “tax”.

Subsections (1), (2), (3), (4), (5), (6), (7), and (8) apply for income years starting on or after 1 January 2023.

In section FC 9(2), replace “administrator.” with “administrator (see also: sections CB 6A(2B) and CZ 39(7)).”

After section FC 9(3), insert:

Replace section FL 1(1), other than the heading, with:

In section FL 1(2), words before the paragraphs, after “non-resident”, insert “, or if a specified event occurs after an emigrating company starts being treated under a double tax agreement as not being a New Zealand resident,”.

In section FL 1, list of defined terms, insert “double tax agreement”.

Replace section FL 2 with:

After section FL 2, insert:

Repeal section FM 31(1)(b) and (e).

In section FM 31, list of defined terms, delete “foreign company” and “income tax”.

Replace section FN 4(1)(d) with:

In section FZ 9(c)(i), replace “16 March 2022” with “31 March 2024”.

In section GB 28(6)(a)(ii), delete “or more”.

In section GC 13(1C), words before the paragraphs, replace “1.122” with “1.142”.

In section HA 7(3)(a), delete “or adoption,”.

In section HB 13(6), replace “values” with “timings and values”.

After section HC 8(1), insert:

In section HC 8(2), replace “The amount” with “An amount not treated as being derived by the person under subsection (1B)”.

In section HC 8, list of defined terms, insert “reportable income”.

Subsections (1) and (2) apply for the 2022–23 and later income years.

In section HC 26(1), words before paragraph (a), replace “New Zealand resident trustee” with “resident trustee of a foreign trust”.

In section HC 26(1)(c), words before subparagraph (i), replace “foreign trust” with “trust”.

In section HC 26(1)(c)(i), after “trust deed”, insert “or a will or other document that creates and governs the trust”.

In section HC 26(1)(d), words before subparagraph (i), replace “foreign trust” with “trust”.

In section HC 26(1)(d)(i), after “trust deed”, insert “or a will or other document that creates and governs the trust”.

In section HC 26(1B), words before paragraph (a), replace “subsection (1)(c)(v) or (d)(iv)” with “subsection (1)(c)(iii), (iv), or (v) or (d)(ii), (iii), or (iv)”.

Replace section HC 26(1B)(b) with:

In section HC 36(5), definition of relative, delete “adoption, as described in paragraph (a)(iv), or”.

In section HM 35(8)(a), replace “these valuations” with “these valuations and paragraph (c) does not apply to the income and deductions”.

In section HM 35(8)(b), replace “paragraph (a).”, with “paragraph (a) and paragraph (c) does not apply to the income and deductions:”.

After section HM 35(8)(b), insert:

Subsections (1), (2), and (3) apply for the 2023–24 and later income years.

Replace section HM 40 with:

In section HR 12(3)(d), replace “the Te” with “Te”.

After section IB 2, insert:

Subsection (1) applies in relation to a breach of the requirements for continuity of ownership of section IA 5 if the breach occurs during the 2020–21 income year or a later income year.

Replace the heading to section IC 4(2) with “Exempt employee share schemes”.

In section IC 4(2), replace “a share purchase scheme” with “an exempt ESS”.

In section IC 4, list of defined terms,—

In section IC 5(1)(b), delete “residence”.

After section IC 5(7), insert:

In section IC 5, list of defined terms, insert “commonality period”.

Replace the heading to section IC 7 with “Place of incorporation or carrying on business”.

Repeal section IC 7(2).

In section IC 7, list of defined terms, delete “double tax agreement”, “income tax”, and “resident in New Zealand”.

After section IZ 7, insert:

In section LE 5(2), after “credit”, insert “and imputation credit”.

Subsection (1) applies for the 2008–09 and later income years.

Replace section LK 1(1C) with:

In section LT 1(4D)(a), after “if”, insert “the amount described in subsection (1)(a)(iii) is zero or”.

Replace the heading to section OB 2 with “Australian companies with imputation credit accounts”.

After section OB 2(2)(a)(i), insert:

After section OB 2(3), insert:

Replace section OB 2(7)(b) and (c) with:

In section OB 2(8)(b), replace “unless paragraph (c) applies” with “for a company that has made an election under subsection (1), unless paragraph (a) or (c) applies”.

In section OB 2, list of defined terms, insert “resident in New Zealand”.

After section OB 23, insert:

Subsection (1) applies for the 2021–22 and later tax years.

Replace section OB 62(1), other than the heading, with:

In section OB 62(3), words before the paragraphs, after “subsection (1)(a)”, insert “or (c)”.

In table O1, after row 21, insert:

Subsection (1) applies for the 2021–22 and later tax years.

After section OP 16, insert:

Subsection (1) applies for the 2021–22 and later tax years.

After section OP 41, insert:

Subsection (1) applies for the 2021–22 and later tax years.

In table O19, after row 11, insert:

Subsection (1) applies for the 2021–22 and later tax years.

In table O20, after row 15, insert:

Subsection (1) applies for the 2021–22 and later tax years.

After section RA 6(4), insert:

In section RA 6, list of defined terms, insert “dividend” and “DRCD deferral date”.

After section RA 15(4), insert:

In section RA 15, list of defined terms, insert “cross-border employees” and “PAYE income payment”.

In section RA 18(1), replace “(Treatment of emigrating companies and their shareholders)” with “or FL 3 (which relate to the treatment of emigrating companies and their shareholders)”.

In section RA 18(2), replace “date that is 3 months after the time of emigration” with “relevant date set out in subsection (3)”.

After section RA 18(2), insert:

Replace section RC 5(2), other than the heading, with:

In section RC 5(3), words before the paragraphs, after “is”, insert “, for the purpose of determining the amount of any particular instalment of provisional tax payable under section RC 9,”.

In section RC 5(3)(b), replace “date on which the first payment of provisional tax for the tax year is required” with “relevant instalment date”.

In section RC 5(3)(c), replace “that date” with “the relevant instalment date”.

In section RC 5(d), replace “the date is not” with “the relevant instalment date is not”.

After section RC 5(3), insert:

Subsections (1) and (2) apply for provisional tax payments for the income years corresponding to the 2008–09 and subsequent tax years. However, subsections (1) and (2) do not apply to a person to the extent to which the person was assessed for penalties and interest on a return of income filed before 30 August 2022 that is inconsistent with section RC 5.

Subsections (3), (4), (5), and (6) apply for the 2017–18 and later income years. However, subsections (3), (4), (5), and (6) do not apply to a person to the extent to which the person was assessed for penalties and interest on a return of income filed before 30 August 2022 that is inconsistent with section RC 5.

Repeal section RD 23.

Repeal section RD 24(1)(b).

After section RD 62, insert:

Replace section RD 65(1), other than the heading, with:

In section RD 65, list of defined terms, insert “cross-border employee” and “foreign superannuation scheme”.

After section RD 71, insert:

Replace section RF 2(1), other than the heading, with:

Replace the heading to section RF 2(2) with “Exclusions: non-residents”.

After section RF 2(2), insert:

In section RF 2(2B), words before the paragraphs, replace “Subsection (1)(d)” with “Subsection (1)(a)(iv)”.

In section RF 2, list of defined terms, insert “double tax agreement” and “New Zealand resident”.

In section RF 2C(1)(c)(i), replace “section RF 2(1)(d)” with “section RF 2(1)(a)(iv)”.

In section RF 9(1), replace “and RF 11B” with “RF 11B, and RF 11BB”.

After section RF 11B, insert:

In section RF 12G(4)(a), replace “section RF 2(1)(d)” with “section RF 2(1)(a)(iv)”.

In section RL 1(2)(a), replace “(13)” with “(1A)”.

This section amends section YA 1.

Replace the definition of Australian ICA company with:

Insert, in appropriate alphabetical order:

Insert, in appropriate alphabetical order:

Replace the definition of business premises with:

In the definition of company,—

Insert, in appropriate alphabetical order:

Insert, in appropriate alphabetical order:

Insert, in appropriate alphabetical order:

Repeal the definition of cryptocurrency inserted by subsection (9).

In the definition of dispose, paragraph (a), replace “CB 22” with “CB 22, CW 3C”.

Insert, in appropriate alphabetical order:

In the definition of fully imputed, paragraph (a),—

Replace the definition of ICA company with:

Insert, in appropriate alphabetical order:

Insert, in appropriate alphabetical order:

Repeal the definition of non-fungible token inserted by subsection (16).

In the definition of non-resident contractor,—

Insert, in appropriate alphabetical order:

In the definition of OECD transfer pricing guidelines, replace “OECD 2017, OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2017” with “OECD (2022), OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022”.

In the definition of outstanding claims reserve,—

Replace the definition of present value (gross) with:

In the definition of profit distribution plan, paragraph (b), replace “a share purchase scheme” with “an exempt ESS”.

In the definition of profit distribution plan, paragraph (b), replace “a employee share scheme” with “an employee share scheme”.

Insert, in appropriate alphabetical order:

Insert, in appropriate alphabetical order:

In the definition of relative, repeal paragraph (a)(iv).

Repeal the definition of resident foreign trustee.

In the definition of settlement, paragraph (c), delete “in section CB 16A(7) (Main home exclusion for disposal within 10 years)”.

Replace the definition of time of emigration with:

In the definition of trust rules, paragraph (h), replace “and 93B,” with “59B, 59C, 59D, 59DB, 93B, and 139AC”.

In the definition of unit trust, paragraph (b)(viii), replace “employee share purchase scheme” with “exempt ESS”.

Insert, in appropriate alphabetical order:

Insert, in appropriate alphabetical order:

Insert, in appropriate alphabetical order:

Subsections (15), (21), and (22) apply for income years starting on or after 1 January 2023.

A person may choose that subsection (20) does not apply to them for—

Subsection (10) applies immediately before the commencement of section 171(11) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022.

Repeal section YB 4(3).

In schedule 5, after clause 7B, insert:

Subsection (1) applies to fringe benefits provided on and after 1 April 2023.

In schedule 15, after item 10, insert:

In schedule 21B, part B, item 21, replace “the contract for the Callaghan Innovation project grant” with “the contract for the Callaghan Innovation project grant. Nor does it include an amount spent by a recipient of a New to R&D Grant, to the extent to which the amount exceeds the amount covered by the New to R&D Grant contract”.

In schedule 32, insert, in appropriate alphabetical order, “Cotton On Foundation Limited”, “Engineers Without Borders New Zealand Incorporated”, “Family for Every Child New Zealand Trust”, “Forests for People Limited”, “Joyya Trust”, and “Solomon Island Medical Mission Charitable Trust”.

In schedule 32, insert, in appropriate alphabetical order, “Heilala Vanilla Foundation”.

In schedule 32, delete “Heilala Vanilla Foundation”.

In schedule 32, insert, in appropriate alphabetical order, “New Zealand for UNHCR (United Nations High Commissioner for Refugees)”.

In schedule 32, delete “UNHCR (United Nations High Commissioner for Refugees)”.

In schedule 32, insert, in appropriate alphabetical order, “Pacific Island Food Revolution Limited”.

In schedule 32, delete “Pacific Island Food Revolution Limited”.

In schedule 32, insert, in appropriate alphabetical order, “Anglican World Aid (Aotearoa) Limited”.

This Part amends the Goods and Services Tax Act 1985.