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Income Tax Act 2007

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

EW 59: Exclusion by Commissioner

You could also call this:

“Commissioner can decide you're not a cash basis person for tax purposes”

The Commissioner can decide that you’re not a cash basis person for a certain type of financial arrangement, even if you would normally be one. This can happen in two situations:

  1. If you or someone else has set up and promoted the financial arrangement to delay paying income tax.

  2. If you and the other person in the financial arrangement are connected (like family or business partners), and you’re working out the income and expenses from the arrangement differently from each other.

When the Commissioner makes this decision, it means you’ll have to follow different rules for calculating your income and expenses for that type of financial arrangement.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515389.

Topics:
Money and consumer rights > Taxes
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Part E Timing and quantifying rules
Financial arrangements rules: Consideration when anti-avoidance provision applies

EW 59Exclusion by Commissioner

  1. The Commissioner may treat a person who would otherwise be a cash basis person for a class of financial arrangements as not being a cash basis person for the class if—

  2. the person, or any other person, has structured and promoted the class to defer an income tax liability:
    1. the parties to a financial arrangement are associated, and the person's calculation of income and expenditure under the financial arrangement differs from that used by the associated person.

      Notes
      • Section EW 59: substituted, on , by section 13(1) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).