Hon Peter Dunne, in Committee, to move the following amendments:
Clause 2
New subclause (1B): to insert, after subclause (1) (after line 6 on page 7), the following:
Subclause (3B): to omit “Section 82(2B) is”
(line 12 on page 7) and substitute “Sections 70B and 82(2B) are”
.
Subclause (6): to omit “38”
(line 24 on page 7) and substitute “37DE(1), 38”
.
New subclause (8D): to insert, after subclause (8C) (after line 13 on page 8), the following:
(8D) Sections 37DC(1), 47CB, 47CC, 49(9F), and schedule 1, row 28B come into force on 1 February 2010.
Subclause (9): to omit “(10B)”
(line 16 on page 8) and substitute “(10B), (10C)”
.
Subclause (10): to omit “Section 51(3)”
(line 23 on page 8) and substitute “Sections 37DB, 37DC(2), (3) and (5), 49(14BB), 49BA, 51(3), and schedule 1, row 28D”
.
New subclause (10B): to insert, after subclause (10) (after line 23 on page 8), the following:
(10B) Sections 37BA, 37DC(4) and (6), 37DD, 37DE(2), 37DF, 37DG, 49(12F) and (18), and schedule 1, row 28C come into force on 1 April 2013.
New clause 4B
To insert, after clause 4 (after line 31 on page 8), the following:
4B Double tax agreements
After section BH 1(6), the following is added:
“‘Reference to unrelated persons
Clause 15H
New subclause (1A): to insert, before subclause (1) (before line 19 on page 18), the following:
Clause 19G
Subclauses (2) and (3): to omit subclauses (2) and (3) (lines 10 to 13 on page 25) and substitute the following:
New clause 37BA
To insert, after clause 37 (after line 25 on page 35), the following:
37BA Subpart IV repealed
(1) Subpart IV is repealed.
(2) Subsection (1) applies for the 2013–14 and later tax years.
New clauses 37DB to 37DG
To insert, after clause 37D (after line 33 on page 35), the following:
37DB What this subpart does
Section LP 1(2) is repealed.
37DC Tax credits for supplementary dividends
(1) Section LP 2(1)(a) is replaced by the following:
(2) Section LP 2(1)(b) is repealed.
(3) In section LP 2(2), “For the year of payment”
is replaced by “For the tax year corresponding to the income year in which the company pays the dividend”
.
(4) Section LP 2(4) is repealed.
(5) Section LP 2(5) and (6) are repealed.
(6) Subsection (4) applies for the 2013–14 and later income years.
37DD Section LP 7 repealed
(1) Section LP 7 is repealed.
(2) Subsection (1) applies for the 2013–14 and later income years.
37DE Relationship with exempt income rules
(1) In section LP 8(2), the formula is replaced by the following:
| | | attached credit + dividend | | |
| | tax rate. |
(2) Section LP 8 is repealed.
(3) Subsection (2) applies for the 2013–14 and later income years.
37DF Section LP 9 repealed
(1) Section LP 9 is repealed.
(2) Subsection (1) applies for the 2013–14 and later income years.
37DG Section LP 10 repealed
(1) Section LP 10 is repealed.
(2) Subsection (1) applies for the 2013–14 and later income years.
New clause 41C
To insert, after clause 41B (after line 16 on page 40), the following:
41C Salary or wages
Section RD 5(6)(b) is replaced by the following:
New clauses 47CB and 47CC
To insert, after clause 47C (after line 6 on page 46), the following:
47CB When dividends fully imputed or fully credited
In section RF 9(1), ‘and RF 10’
is replaced by ‘, RF 10, and RF 11B’
.
47CC New section RF 11B
After section RF 11, the following is inserted:
“‘RF 11B Certain dividends paid to certain non-residents
The rate of NRWT payable on a payment of non-resident passive income is 0% to the extent to which the payment is a fully imputed dividend paid to a non-resident by a company, if––
“‘Defined in this Act: company, direct voting interest, dividend, non-resident, non-resident passive income, NRWT, pay, post-treaty tax rate’”..
Clause 49
Subclause (2): definition of cost of timber, paragraph (a)(ii): to omit “right take timber”
(line 34 on page 47) and substitute “right to take timber”
.
New subclauses (9E) and (9F): to insert, after subclause (9D) (after line 11 on page 52), the following:
New subclause (10C): to insert, after subclause (10B) (after line 28 on page 53), the following:
New subclause (12F): to insert, after subclause (12E) (after line 38 on page 54), the following:
New subclause (14BB): to insert, after subclause (14B) (after line 24 on page 55), the following:
New subclause (18): to add, after subclause (17) (after line 3 on page 56), the following:
New clause 49BA
To insert, after clause 49 (after line 3 on page 56), the following:
49BA What this subpart does
Section YB 1(8) is repealed.
New clause 70B
To insert, after clause 70 (after line 29 on page 71), the following:
70B Imposition of goods and services tax on supply
After section 8(2), the following is inserted:
“‘(2B) To the extent to which a supply of services consists of the facilitation of inbound tour operations, the supply is chargeable with tax under subsection (1), and section 11A does not apply to that part of the supply.
“‘(2E) If a registered person has supplied services in the transitional period by way of the facilitation of inbound tour operations and tax was paid under this section in relation to the services, the person is entitled to a refund of the amount of tax paid. They must apply for the refund in writing within the period that starts on the date of Royal assent of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 and ends 6 months after that date.
“‘(2F) For the purposes of subsections (2B) and (2C), services that consist of the facilitation of inbound tour operations means the services that a registered person provides in packaging 1 or more domestic tourism products and services in New Zealand and selling them outside New Zealand to a non-resident person. The tourism products and services may include accommodation, meals, transport, and other activities.’”
Schedule 1
New row 1A: to insert, before row 1 (on page 83), the following:
New rows 28B to 28D: to insert, after row 28 (on page 85), the following:
| 28B | LP 2 | | direct voting interest, post-treaty tax rate |
| 28C | LP 2 | supplementary dividend holding company | |
| 28D | LP 2 | year of payment | |
Explanatory note
This Supplementary Order Paper contains 3 substantive non-remedial amendments to the bill, and 6 minor remedial matters.
The first substantive amendment is to clarify that inbound tour operators’ facilitation services are subject to GST at the standard 12.5% rate. However, for the period 1 July 2007 to 30 June 2008 only, all inbound tour operators will be able to zero-rate their facilitation services. This will allow those operators who have not zero-rated their fees in that period to claim refunds of GST.
The second substantive amendment is the repeal of the general availability of supplementary dividend tax credits. In the future, only portfolio investors on NRWT rates of at least 15% will qualify for relief under the supplementary dividend rules, along with supplementary dividend holding companies. Reflecting this, a zero rate of NRWT is introduced for non-portfolio dividends (and for any other dividends subject to lower tax rates), to the extent they are imputed. Later, the supplementary dividend regime will also cease to apply to holding companies.
The third substantive amendment is to ensure the correct taxation of the new portable New Zealand superannuation and veterans' pension, introduced by the New Zealand Superannuation and Retirement Income Amendment Act 2009 and the War Pensions Amendment Act 2009. When a superannuitant or pensioner is travelling overseas and is, effectively, still resident in New Zealand, they will be taxed so that, apart from the withholding tax regime, they pay the same as if they were not travelling and were actually resident in New Zealand. If the superannuitant or pensioner decides to reside overseas, the tax-free status of the current portable superannuation and veteran's pension is retained.
The 6 minor remedial matters are:
A new definition of unrelated person for the purposes of double tax agreements, to equate that term with the domestic term not an associated person in the Income Tax Act 2007:
The correction of a formula for supplementary dividend holding companies, in section LP 8(2) of the Income Tax Act 2007:
The correction of a cross-reference in section EY 30 of the Income Tax Act 2007:
The correction of cross-references in section HM 60 of the Income Tax Act 2007:
The reinstatement, in the Income Tax Act 2007, of a definition of relative, to the 4th blood degree, for the purposes of a cross-reference in section 2 of the Securities Act 1978:
The correction of a typographical error in the defined term cost of timber.