Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Bill

  • enacted

Hon David Parker

Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Bill

Government Bill

65—3

Contents

Key
1Title
2Commencement
Part 1
Annual rates of income tax
3Annual rates of income tax for 2021–22 tax year
Part 2
Amendments to Goods and Services Tax Act 1985
4Amendments to Goods and Services Tax Act 1985
5Section 2 amended (Interpretation)
5BSection 3 amended (Meaning of term financial service)
6Section 3A amended (Meaning of input tax)
7Section 5 amended (Meaning of term supply)
8Section 6 amended (Meaning of term taxable activity)
10Section 11 amended (Zero-rating of goods)
11Section 11A amended (Zero-rating of services)
12New section 12C inserted (Information for importation of goods including distantly taxable goods)
12CInformation for importation of goods including distantly taxable goods
13Section 15 amended (Taxable periods)
14Section 15B amended (Taxable periods aligned with balance dates)
15Section 15C amended (Changes in taxable periods)
16Section 15D amended (When change in taxable period takes effect)
17Section 15E amended (Meaning of end of taxable period)
18New section 15EB inserted (Approval of taxable period not consisting of whole calendar months)
15EBApproval of taxable period not consisting of whole calendar months
19New cross-headings and sections 19E to 19Q inserted
Records of supplies
19EDefinitions of types of record
19FRecords of taxable supplies
19GRecords of imported supplies received by registered person
19HRecords of secondhand goods received by registered person
19IRecords of supplies to nominated recipients
19JRecords of supplies by members of GST group or supplier group
Supply information and supply correction information
19KTaxable supply information: supplies by registered person
19LTaxable supply information: supplies by member of GST group or supplier group
19MTaxable supply information: goods included in supplies of distantly taxable goods
19NSupply correction information
19OTreatment of fractional amounts of cent in information
19PCommissioner may approve use of symbols, etc, on electronically transmitted information
19QReferences to tax invoice, credit note, and debit note
20New cross-heading above section 20 inserted
Calculation of tax payable: deductions, apportionment, other adjustments
21Section 20 amended (Calculation of tax payable)
22Section 20H amended (Goods and services tax incurred in making financial services for raising funds)
23Section 21 amended (Adjustments for apportioned supplies)
24Section 21B amended (Adjustments when person or partnership becomes registered after acquiring goods and services)
25Section 21F amended (Treatment on disposal)
26Section 24 amended and repealed (Tax invoices)
27Section 24BA amended before repeal and repealed (Shared tax invoices)
28Section 24BAB repealed (Receipts for supplies)
29Section 24BAC repealed (Information for importation of goods including distantly taxable goods)
30Section 24B repealed (Records to be kept by recipient of imported goods and services)
31Section 25 amended (Credit and debit notices)
32Section 25AA amended (Consequences of change in contract for imported goods and services)
33Section 25AB amended (Consequences of change in contract for secondhand goods)
34Section 25A repealed (Commissioner may approve use of symbols, etc, on electronically transmitted invoices, receipts, and credit and debit notes)
35Section 43 amended (Deduction of tax from payment due to defaulters)
36Section 53 amended (Registered person to notify change of status)
37Section 55 amended (Group of companies)
38New section 55B inserted (Supplier group and issuing member)
55BSupplier group and issuing member
39Section 60 amended (Agents and auctioneers)
40Section 75 amended (Keeping of records)
41Section 75B amended (General rules for giving information or communicating matters)
42Section 78AA amended (Exceptions to effect of increase of tax)
43Section 78B amended (Adjustments to tax payable for persons furnishing returns following change in rate of tax)
44Section 78BA amended (Adjustments to tax payable in relation to credit and debit notes following change in rate of tax)
45Section 78G repealed (Railways vesting: zero-rating and timing of tax calculations and documents)
Part 3
Amendments to Income Tax Act 2007
46Amendments to Income Tax Act 2007
47Section BC 5 amended (Taxable income)
48Section CB 6A replaced (Disposal within 10 years: Bright-line test for residential land)
CB 6ADisposal within 10 years: Bright-line test for residential land
CB 6ACResidential land transferred for certain family trusts
CB 6ADResidential land transferred to Maori authorities, or similar eligible persons, for certain family trusts
CB 6ABResidential land transferred in relation to certain family trusts and other capacities
CB 6ACResidential land transferred in relation to certain Māori family trusts
CB 6AECertain transfers of residential land included in settlement of claim under the Treaty of Waitangi
CB 6AFCertain transfers of residential land between look-through company, or partnership, and members
49Section CB 16A amended (Main home exclusion for disposal within 10 years)
49BSection CB 36 amended (Disposal of emissions units)
50Section CD 5 amended (What is a transfer of company value?)
50BSection CD 38 amended (General calculation rule for transfers of company value)
52Section CD 43 amended (Available subscribed capital (ASC) amount)
53Section CD 44 amended (Available capital distribution amount)
54Section CW 10 amended (Dividend within New Zealand wholly-owned group)
54BNew section CW 10B inserted (Dividends derived by council-controlled organisation holding companies)
CW 10BDividends derived by council-controlled organisation holding companies
55Section CW 39 amended (Local authorities)
55BSection CW 47 amended (TAB NZ and racing clubs)
55CNew section CW 62C inserted (Income from foreign-currency loans used for disallowed residential property)
CW 62CIncome from foreign-currency loans used for disallowed residential property
56Section CX 47 amended (Government grants to businesses)
56BSection CZ 39 amended (Disposal within 5 years: bright-line test for residential land: acquisition on or after 29 March 2018)
57Section CZ 40 amended (Main home exclusion for bright-line: acquisition on or after 29 March 2018)
57BSection DB 7 amended (Interest: most companies need no nexus with income)
58Section DB 8 amended (Interest: money borrowed to acquire shares in group companies)
61Section DB 20B amended (Consideration for agreement to grant, renew, extend, or transfer leasehold estate or licence)
61BSection DB 23C amended (Revenue account property: cost of some residential land reduced)
62Cross-heading above section DB 41 replaced
Corporate gifting
63Section DB 41 amended (Charitable or other public benefit gifts by company)
64Section DF 1 amended (Government grants to businesses)
64BSection DG 2 amended (Application of this subpart)
64BBSection DG 8 amended (Expenditure limitation rule)
64CSection DG 9 amended (Apportionment formula)
64CBSection DG 10 amended (Interest expenditure rules)
64DSection DG 11 amended (Interest expenditure: close companies)
64DBSection DG 14 amended (Interest expenditure: non-corporate shareholders)
64ENew subpart DH inserted (Interest incurred in relation to certain land)
Subpart DH—Interest incurred in relation to certain land
DH 1Interest related to certain land
DH 2When this subpart applies
DH 3When this subpart applies: companies
DH 4When this subpart does not apply: exemptions for new builds, development, social or emergency or transitional housing, and council housing
DH 5Key terms
DH 6Interposed residential property percentage
DH 7Grandparented residential interest
DH 8Deduction not allowed
DH 9Exception to limited denial of deductions: loans denominated in foreign currencies
DH 10Limited denial of deductibility: simplified calculation of interest affected
DH 11Denied amounts: treatment upon disposal of disallowed residential property
DH 12Valuation
64FSection DT 1A amended (Ring-fenced allocations)
65Section DV 18B amended (Cost base for shares when debt forgiven within economic group)
66Section EE 6 amended (What is depreciable property?)
67Section EE 40 amended (Transfer of depreciable property on or after 24 September 1997)
68Section EE 44 amended (Application of sections EE 48 to EE 51)
68BASection EE 47 amended (Events for purposes of section EE 44)
68BABSection EE 48 amended (Effect of disposal or event)
68BSection EH 2 replaced (Income Equalisation Reserve Account)
EH 2Deposits to be paid into Crown Bank Account
69Section EJ 10B amended (IFRS leases)
69BSection EK 1 replaced (Environmental Restoration Funds Account)
EK 1Payment to Crown Bank Account
70Section EL 3 amended (Definitions for this subpart)
70BSection EL 14 amended (Continuity rules for companies)
71Section EM 1 amended (Australian non-attributing shares and attributing FDR method interests)
72Section EM 3 amended (What hedges does this subpart apply to?)
73Section EM 4 replaced (Irrevocable elections)
EM 4Elections
74Section EM 5 amended (Fair dividend rate hedge portions)
75New section EM 5B inserted (Fair dividend rate hedge portions: portfolio method)
EM 5BFair dividend rate hedge portions: portfolio method
76Section EM 6 amended (Income and expenditure for fair dividend rate hedge portions)
77Section EM 7 amended (Quarterly test of fair dividend rate hedge portions)
78Section EM 8 amended (Some definitions)
79Section EW 5 amended (What is an excepted financial arrangement?)
80Section EW 46C amended (Consideration when debt forgiven within economic group)
80BASection EZ 23B amended (Property acquired after depreciable property affected by Canterbury earthquakes)
80BABSection EZ 23BB amended (Interest in property acquired after depreciable property affected by Canterbury earthquakes)
80BACSection EZ 23BC amended (Property acquired after depreciable property affected by Hurunui/Kaikōura earthquakes)
80BADNew section EZ 23BD inserted (Loss on disposal of grandparented structure)
EZ 23BDLoss on disposal of grandparented structure
80BAESection EZ 73 amended (Insurance for Canterbury earthquake damage causing disposal: optional timing rule for income, deductions)
80BSection FB 3A amended (Residential land)
80CNew cross-heading and sections FC 9B and FC 9C inserted
Exceptions for residential land transferred to trustees of certain trusts or other entities
FC 9BResidential land: certain transferors
FC 9BResidential land: certain transferors
FC 9CResidential land: certain recipients
FC 9CResidential land: certain recipients
FC 9DResidential land: certain recipients of Treaty of Waitangi land
81Section FH 11 amended (Residents, or non-residents with deducting branches, having expenditure funding overseas hybrid mismatches)
82Section FH 15 amended (Definitions)
83Section FM 8 amended (Transactions between group companies: income)
83BSection FM 15 amended (Amortising property and revenue account property)
84Section FO 2 amended (Amalgamation rules)
85Section FO 21 amended (When amalgamating companies are parties to financial arrangements: economic groups)
85BSection GB 3 amended (Arrangements for carrying forward loss balances: companies’ ownership)
85CNew cross-heading and sections GB 53B and GB 53C inserted
Interest incurred in relation to certain land
GB 53BInterposed residential property percentage: increases or decreases in value
GB 53COn-lending at lower rate
85DSection GC 3B amended (Disposals of emissions units)
86Section GC 18 amended (Loan features disregarded by rules for transfer pricing arrangements)
87Section HF 7 replaced (Taxable Maori authority distributions)
HF 7Taxable Maori authority distributions
88Section HR 3 amended (Definitions for section HR 2: group investment funds)
89Section HR 9BA amended (Elections to treat debt funding special purpose vehicles as transparent)
89BSection IA 5 amended (Restrictions on companies’ loss balances carried forward: continuity of ownership)
89CSection IB 3 amended (When tax loss components of companies carried forward despite ownership continuity breach)
89DSection IB 5 amended (When group companies treated as single company)
89ESection ID 5 amended (Pre-consolidation losses on exit: part-year rule)
89FSection IP 1 amended (When this subpart applies)
89GSection IP 3 amended (Continuity breach: tax loss components of companies carried forward)
89HNew section IP 3B inserted (Business continuity breach: tax loss components of companies carried forward)
IP 3BBusiness continuity breach: tax loss components of companies carried forward
89ISection IP 4 amended (Breach in income year in which tax loss component arises)
89JSection IP 5 amended (Breach in tax year in which loss balance is grouped)
89KSection IP 6 amended (Financial statements required)
89LSection IZ 8 amended (Election to use net loss for 2019–20 or 2020–21 year as tax loss in preceding year)
90Section LB 1B amended (Treatment of tax credits of certain companies with shareholders who are employees)
91BSection LT 1 amended (Tax credits for petroleum miners)
92Section LY 5 amended (Eligible research and development expenditure)
93Section LY 9 amended (Orders in Council)
94Section LY 10 amended (Evaluation)
95Section MD 9 amended (Fifth requirement: earner)
96Section MX 3 amended (Wage intensity criteria)
97Section OA 9 amended (General treatment of credits and debits on resident’s restricted amalgamation)
98Section OB 4 amended (ICA payment of tax)
99Section OB 32 amended (ICA refund of income tax)
100Table O1 amended (Table O1: imputation credits)
101Table O2 amended (Table O2: imputation debits)
102Section OK 2 amended (MACA payment of tax)
103Section OK 3 amended (MACA payment of tax to other Maori authorities)
104Section OK 11 amended (MACA allocation of provisional tax)
105Section OK 12 amended (MACA refund of income tax)
106Table O17 amended (Table O17: Maori authority credits)
107Table O18 amended (Table O18: Maori authority debits)
108Section OP 12 amended (Consolidated ICA dividend derived with imputation credit)
109Section OP 30 amended (Consolidated ICA refund of income tax)
109BSection OP 31 amended (Consolidated ICA amount applied to pay other taxes)
110Section RC 35B amended (Treatment of overpaid provisional tax instalments calculated using AIM method)
111Section RC 38 amended (Crediting income tax with early-payment discount)
112Section RC 40 amended (Some definitions)
113Section RD 5 amended (Salary or wages)
114Section RD 45 replaced (Unclassified benefits)
RD 45Unclassified benefits
114BSection RD 50 amended (Employer’s liability for attributed benefits)
114CSection RD 60 amended (Close company option)
114DSection RD 61 amended (Small business option)
114ESection RD 63 amended (When employer stops employing staff)
115Section RD 67 replaced (Calculating amounts of tax for employer’s superannuation cash contributions)
RD 67Calculating amounts of tax for employer’s superannuation cash contributions
116Section RE 2 amended (Resident passive income)
117Section RE 10C amended (Obligations of custodial institutions in relation to certain payments of investment income)
118Section RE 21 amended (Basis of payment of RWT)
119Section RF 12 amended (Interest paid by approved issuers or transitional residents)
120Section RM 1 amended (What this subpart does)
121Section RM 2 amended (Refunds for overpaid tax)
122Section RM 4 amended (Overpayment on amended assessment)
123Section RM 27 amended (Application when no credits arise)
124Section RP 17 amended (Tax pooling intermediaries)
125Section RP 17B amended (Tax pooling accounts and their use)
126Section RP 19 amended (Transfers from tax pooling accounts)
127Section YA 1 amended (Definitions)
128Section YA 4 amended (General rules for giving information or communicating matters)
129Section YC 13 amended (Corporate spin-outs)
130Section YE 1 amended (References to balance dates and years)
131Section YZ 5 amended (New Zealand Memorial Museum Trust)
131BNew Schedule 15 inserted (Excepted residential land)
132Schedule 21B amended (Expenditure or loss for research and development tax credits)
133Schedule 32 amended (Recipients of charitable or other public benefit gifts)
Part 4
Amendments to other enactments
Amendments to Tax Administration Act 1994
134Amendments to Tax Administration Act 1994
135Section 3 amended (Interpretation)
135BSection 7AA amended (Authorisation to make payments under small business cashflow loan scheme)
135CSection 7AAB amended (Authorisation to make COVID-19 support payments)
136Section 14 amended (Modes of communication: general provisions)
137Section 14F amended (Giving information by personal delivery, post, fax, or electronic means)
138Section 14G amended (Contact addresses)
139Section 16C amended (Key terms)
139BSection 17B amended (Commissioner may require information or production of documents)
139CSection 22D amended (Key terms)
140Section 25MB amended (Information from custodial institutions)
141New section 25NB inserted (De minimis filing requirements for certain persons)
25NBDe minimis filing requirements for certain persons
142New section 33F inserted (Research and development tax credits: extension of time for 2019–20 income year)
33FResearch and development tax credits: extension of time for 2019–20 income year
143Section 43B amended (Non-active trusts may be excused from filing returns)
143BSection 54C amended (Information in relation to payment of RLWT)
143CSection 59BA amended (Annual return for trusts)
144Section 68CB amended (Research and development tax credits: general approval)
144BSection 68CC amended (Research and development tax credits: greater than $2 million approval)
145New section 68CF inserted (Research and development tax credits: extension of time for approvals)
68CFResearch and development tax credits: extension of time for approvals
146Section 89B amended (Commissioner may issue notices of proposed adjustment)
147Section 89L (Application to High Court)
148Section 89P amended (Challenge notice for taxpayer-initiated disputes)
149Section 108 amended (Time bar for amendment of income tax assessment)
150New section 108AB inserted (Time bar for amending assessment of KiwiSaver contributions)
108ABTime bar for amending assessment of KiwiSaver contributions
151Section 108B amended (Extension of time bars)
152Section 113 amended (Commissioner may at any time amend assessments)
153Section 113A amended (Correction of certain errors in subsequent returns)
153BSection 120KE amended (Provisional tax and rules on use of money interest)
153CSection 120KF repealed (Tolerance for provisional tax instalments)
154Section 125 amended (Certain rights of objection not conferred)
155Section 138E amended (Certain rights of challenge not conferred)
156Section 138P amended (Powers of hearing authority)
157Section 139A amended (Late filing penalty for certain returns)
158Section 139AA amended (Non-electronic filing penalty)
159Section 139B amended (Late payment penalty)
159BSection 141 amended (Tax shortfalls)
160New section 141EE inserted (Penalty for acquiring or possessing electronic sales suppression tools)
141EEPenalty for acquiring or possessing electronic sales suppression tools
161Section 141FB amended (Reduction of penalties for previous behaviour)
162New section 141GB inserted (Reduction of electronic sales suppression penalties)
141GBReduction of electronic sales suppression penalties
162BSection 142B amended (Due date for shortfall penalties)
163Section 143 amended (Absolute liability offences)
164Section 143A amended (Knowledge offences)
165New sections 143BB and 143BC inserted
143BBManufacturing or supplying electronic sales suppression tools
143BCAcquiring or possessing electronic sales suppression tools
166Section 143D amended (Offences related to disclosure of certain information by persons other than revenue officers)
167Section 157A amended (Application of Parts 7 and 9 to defaulters)
168Section 173K amended (Application)
168BSection 183ABA amended (Remission in circumstances of emergency event)
169Section 183ABAB amended (Remission of interest for taxpayers affected by COVID-19: general rules)
169BSection 183ABAC amended (Remission of interest on terminal tax for 2020–21 tax year for provisional taxpayers affected by COVID-19)
170Section 183C amended (Cancellation of interest)
171Section 225 amended (Regulations)
172Section 225AA repealed (Regulations: co-operative dairy and marketing companies)
173Schedule 7 amended (Disclosure rules)
174Schedule 8 amended (Reporting of income information by individuals and treatment of certain amounts)
Amendments to Child Support Act 1991
175Amendments to Child Support Act 1991
176Section 40AA amended (Interpretation for purposes of sections 40 to 45)
177Section 40 amended (Estimated income)
178Section 44 amended (End-of-year reconciliation)
179Section 81A replaced (Amendments of assessments arising from living circumstances existing at time initial assessment made)
81AAmendments of assessments arising from living circumstances existing at time when assessment begins
180Section 87A amended (Four-year time bar for amendment of certain assessments)
181Section 88 amended (Notice of assessment of formula assessment of child support)
182Section 89H amended (Applications for exemptions under this subpart)
183Section 152B amended (Offsetting child support payments)
184Section 180D amended (Sections 180B and 180C to cover child support penalties)
185Schedule 1 amended (Application, transitional, and savings provisions relating to amendments to Act made on or after 1 April 2015)
186Schedule 3 amended (Expenditure on children)
Amendments to KiwiSaver Act 2006
187Amendments to KiwiSaver Act 2006
188Section 4 amended (Interpretation)
188BSection 59A amended (When this subpart applies)
188CSection 59B amended (Initial back-dated validation)
188DSection 59C amended (Confirmed back-dated validation)
188ESection 59D amended (No confirmed back-dated validation)
188FSection 73 amended (Certain unremitted deductions and employer contributions entered in and paid out of holding account)
188GSection 78 amended (Treatment of certain unremitted deductions and employer contributions in holding account)
189Section 80 amended (Refund by Commissioner of amounts paid in excess of required amount of deduction or if employee opts out)
190Section 81 amended (Refund by provider of amounts paid in excess of required amount of contribution or if member opts out)
191Section 81B amended (Residual refunds)
192Section 83 amended (Unclaimed money held by Commissioner)
192BSection 85 amended (Time when deductions and employer contributions treated as received for interest purposes)
193New cross-heading and section 91B inserted
Time bar for refunding contributions
91BTime bar for refunding contributions
194Section 100 amended (Refunds of employer contribution by Commissioner if employee opts out)
195Section 101 amended (Refunds of employer contribution by provider)
196Section 101AA amended (What Commissioner must do with employer contribution refunded by provider)
197Section 114 amended (Refunds if employee loses, etc, savings suspension notice)
197BSchedule 1 amended (KiwiSaver scheme rules)
Amendments to Student Loan Scheme Act 2011
198Amendments to Student Loan Scheme Act 2011
199Section 211 amended (Meaning of notify)
200Section 212 amended (Meaning of notify a person in writing)
Amendments to Unclaimed Money Act 1971
200BAmendments to Unclaimed Money Act 1971
Amendments to Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020
201Amendments to Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020
Amendment to Child Support Amendment Act 2021
201BAmendment to Child Support Amendment Act 2021
Revocation of Co-operative Dairy Companies Income Tax Regulations 1955
202Co-operative Dairy Companies Income Tax Regulations 1955 revoked
Revocation of Cooperative Milk Marketing Companies Income Tax Regulations 1960
203Cooperative Milk Marketing Companies Income Tax Regulations 1960 revoked
Revocation of Cooperative Pig Marketing Companies Income Tax Regulations 1964
204Cooperative Pig Marketing Companies Income Tax Regulations 1964 revoked
Schedule 1A
New Schedule 15 inserted into Income Tax Act 2007
Schedule 1
New Part 6 inserted into Schedule 1 of Child Support Act 1991
Legislative history

The Parliament of New Zealand enacts as follows: