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EW 8: Election to treat certain excepted financial arrangements as financial arrangements
or “Choose to treat certain financial deals as financial arrangements for tax purposes”
You could also call this:

“Who needs to follow the financial arrangements rules”

If you’re involved in a financial arrangement, you need to work out and allocate income or expenses for that arrangement each year. This is called the financial arrangements rules. You do this if the rules apply to your arrangement, which is explained in [section EW 10].

If you don’t live in New Zealand, these rules usually don’t apply to you. But there are some exceptions:

If you’re running a business through a fixed place in New Zealand, the rules apply to any financial arrangements related to that business.

The rules also apply if you’re a trustee for someone who lives in New Zealand. In this case, you need to meet certain conditions about getting income from overseas and how you manage that income.

Remember, these rules are part of New Zealand’s tax laws, so it’s important to understand them if they apply to you.

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Next up: EW 10: Financial arrangements to which financial arrangements rules apply

or “Rules for financial arrangements made or changed after 20 May 1999”
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Part E Timing and quantifying rules
Financial arrangements rules

EW 9Persons to whom financial arrangements rules apply

  1. A person who is a party to a financial arrangement must calculate and allocate income or expenditure under the arrangement for an income year under the financial arrangements rules, if the arrangement is one to which the rules apply under section EW 10. This subsection is overridden by subsection (2).

  2. Subsection (1) does not apply to a person who is not resident in New Zealand unless the person is described in subsection (3) or (4).

  3. Subsection (1) applies to a person who is not resident in New Zealand to the extent to which the person is a party to a financial arrangement for the purpose of a business carried on by the person through a fixed establishment in New Zealand.

  4. Subsection (1) applies to a person who is not resident in New Zealand if—

  5. the person is a trustee for a settlor who is resident in New Zealand; and
    1. the person as trustee—
      1. meets the requirements of section HC 25(2)(a) (Foreign-sourced amounts: non-resident trustees) for the derivation of assessable income from a foreign-sourced amount; and
        1. meets the requirements of neither of the exceptions, to section HC 25(2), in section HC 25(3) and (4).

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        Notes
        • Section EW 9(2): replaced (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 131(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
        • Section EW 9(4)(b): replaced (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 131(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
        • Section EW 9 list of defined terms settlor: inserted, on , by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).