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Income Tax Act 2007

Timing and quantifying rules - Financial arrangements rules - Consideration when anti-avoidance provision applies

EW 55: Effect of being cash basis person

You could also call this:

“How being a cash basis person affects your financial reporting options”

If you’re a cash basis person, you don’t have to use any of the spreading methods for your financial arrangements. However, you can choose to use them if you want to. You can find more information about this choice in section EW 61.

Even if you don’t use any spreading methods, you still need to work out a base price adjustment in certain situations. You have to do this when any of the conditions in section EW 29(1) to (12) apply to you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515376.

Topics:
Money and consumer rights > Taxes
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EW 54: Meaning of cash basis person, or

“Who qualifies as a cash basis person for tax purposes”

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EW 56: Natural person, or

“This provision about individual taxpayers and anti-avoidance rules has been removed”

Part E Timing and quantifying rules
Financial arrangements rules: Consideration when anti-avoidance provision applies

EW 55Effect of being cash basis person

  1. A cash basis person is not required to apply any of the spreading methods to any of their financial arrangements, but may choose to do so under section EW 61.

  2. The fact that a cash basis person does not use any of the spreading methods for the financial arrangement does not excuse them from the requirement to calculate a base price adjustment when any of section EW 29(1) to (12) applies to them.

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