No 74
House of Representatives
Supplementary Order Paper
Tuesday, 4 September 2018
Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill
Proposed amendments
Hon Stuart Nash, in Committee, to move the following amendments:
Clause 2
New subclause (7B): After subclause (7) (page 15, after line 8), insert:
(7B)
Sections 151B and 151C are treated as coming into force on 4 September 2010.
New subclause (19B): after subclause (19) (page 15, after line 24), insert:
(19B)
Sections 225B and 228B are treated as coming into force on 15 May 2018.
Subclause (21): before “178”
(page 15, line 27), insert “153B,”
.
New clauses 151B and 151C
After clause 151 (page 99, after line 35), insert:
151B Section EZ 23B amended (Property acquired after depreciable property affected by Canterbury earthquakes)
(1)
In section EZ 23B(1), in the words before the paragraphs, replace “2019–20”
with “2024–25”
.
(2)
In section EZ 23B(8)(a), replace “2018–19”
with “2023–24”
.
151C Section EZ 23BB amended (Interest in property acquired after depreciable property affected by Canterbury earthquakes)
(1)
In section EZ 23BB(1), in the words before the paragraphs, replace “2019–20”
with “2024–25”
.
(2)
In section EZ 23BB(9)(a)(i), replace “2018–19”
with “2023–24”
.
New clause 153B
After clause 153 (page 100, after line 29), insert:
153B Section FH 5 amended (Payments by New Zealand resident or New Zealand deducting branch producing deduction without income)
(1)
Repeal section FH 5(1)(a).
(2)
Replace section FH 5(2)(a) with:
(a)
the payee is a non-resident who receives the payment other than through a New Zealand deducting branch of the payee; and
(3)
Subsections (1) and (2) apply for income years beginning on or after 1 July 2018.
Clause 221
Replace “228”
(page 123, line 10) with “228B”
.
New clause 225B
After clause 225 (page 123, after line 30), insert:
225B Section 20 amended (Calculation of tax payable)
Replace section 20(3K) with:
(3K)
For the purposes of subsections (3), (3C), and (3J), and the definitions of percentage actual use and percentage intended use in section 21G(1), goods and services used in the course or furtherance of an activity that is not a taxable activity by a registered person who is a non-profit body resident in New Zealand are treated as being used in the course or furtherance of the taxable activity of the registered person—
(a)
to the extent that the goods and services are not used for the making of exempt supplies; and
(b)
if the goods and services are not excluded from the effect of this subsection by an election of the registered person under subsection (3KB).
(3KB)
If a registered person is a non-profit body resident in New Zealand and carries on an activity, that is not a taxable activity, in the course or furtherance of which the registered person uses an asset and receives supplies of goods and services, for use solely in relation to the asset, to which subsection (3K) would apply in the absence of this subsection, the registered person may elect that the supplies be excluded from the effect of subsection (3K) after a date (the election date), and that the asset be treated as disposed of on the election date in the course or furtherance of the taxable activity and reacquired on the election date for use in the course or furtherance of an activity that is not a taxable activity, by—
(a)
notifying the Commissioner, in a way acceptable to the Commissioner, of—
(ii)
the election date, which must be the same as or later than the date of the notification and before 1 April 2021; and
(iii)
the information required by the Commissioner relating to the election; and
(b)
including in a return for the taxable period in which the election date occurs an amount of output tax on the disposal equal to the tax on a taxable supply having a value equal to the total of—
(i)
each amount that affects under subsection (3K) the calculation of the registered person’s input tax before the election date and is included in the cost of the asset; and
(ii)
each amount that affects under subsection (3K) the calculation of the registered person’s input tax before the election date and is included in the operating costs of the asset in the period of 7 years before the election date.
New clause 228B
After clause 228 (page 124, after line 19), insert:
228B New section 88 inserted (Valuation: non-profit body disposing of certain assets, deregistering, or acquiring certain assets of non-profit body)
After section 87, insert:
88 Valuation: non-profit body disposing of certain assets, deregistering, or acquiring certain assets of non-profit body
(1)
Subsection (2) applies to a registered person who—
(a)
is a non-profit body resident in New Zealand; and
(b)
makes in a taxable period a supply (the asset supply) of an asset that the registered person has used in the course or furtherance of an activity that is not a taxable activity; and
(c)
before 15 May 2018, makes a return for the taxable period.
(2)
The registered person may not, on or after 15 May 2018, take a tax position relating to the asset supply that differs from the tax position taken in the return for the taxable period.
(3)
A person may make an election under subsection (4) if—
(a)
the person is deregistered and deemed under section 5(3) to supply goods and services on a date (the supply date) that is on or after 15 May 2018 and before 1 April 2021; and
(b)
immediately before the supply date, the person uses the goods and services in the course or furtherance of an activity that is not a taxable activity and subsection (3K) applies to the goods and services.
(4)
The registered person may elect under this subsection that the consideration in money for each supply under section 5(3) of an asset is the total of—
(a)
each amount that affects under subsection (3K) the calculation of the registered person’s input tax before the supply date and is included in the cost for the registered owner of the asset supplied; and
(b)
each amount that affects under subsection (3K) the calculation of the registered person’s input tax before the supply date and is included in the operating costs of the asset in the period of 7 years before the supply date.
(5)
A registered person makes an election under subsection (4) by notifying the Commissioner in a way acceptable to the Commissioner—
(a)
of the election, and the information required by the Commissioner relating to the election; and
(b)
when the registered person provides the return for the taxable period that includes the supply date.
(6)
Subsection (7) applies to the amount of input tax for a registered person (the recipient) from a supply of secondhand goods if—
(a)
the supply is of an asset formerly held by a non-profit body (the original owner) resident in New Zealand; and
(b)
the recipient is—
(i)
associated with the original owner:
(iii)
associated with a non-profit body; and
(c)
an election under subsection (4) or section 20(3KB) determined the output tax for the original owner on a supply of the asset; and
(d)
the supply of the asset to the recipient occurs less than 5 years after the supply of the asset by the original owner.
(7)
Despite section 3A(2) and (3), the input tax for the recipient does not exceed the output tax for the original owner on the supply of the asset by the original owner.