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EZ 45: Application of old financial arrangements rules
or “When old financial arrangements rules don't apply”
You could also call this:

“Choose to treat short-term trade credits as financial arrangements”

You can choose to treat short term trade credits as financial arrangements for old financial arrangements rules. To do this, you need to tell the Commissioner about your choice. You must do this within the same time you would normally give your tax return.

You can change your mind about this choice. If you want to stop treating short term trade credits as financial arrangements, you need to tell the Commissioner. This change will only affect new short term trade credits from the next income year.

When you make this choice, you can apply it to all your short term trade credits or just some of them. If you want to apply it to only some, you can group them by the currency they use, how long they last, or both.

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Next up: EZ 47: Election to continue to treat certain excepted financial arrangements as financial arrangements

or “Choosing to keep certain pre-1999 financial deals under old tax rules”
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Part E Timing and quantifying rules
Terminating provisions: Definitions

EZ 46Election to treat short term trade credit as financial arrangement

  1. For the purposes of the old financial arrangements rules, a taxpayer may elect by notice given in accordance with subsection (2) to treat short term trade credits specified in subsection (4) as financial arrangements.

  2. Notice of an election under subsection (1) in relation to an income year must be given to the Commissioner within the time within which a vendor or a purchaser is required under section 37 of the Tax Administration Act 1994 to furnish a return of income for the income year to which the election is to apply.

  3. An election by the taxpayer under subsection (1) may be revoked by notice given to the Commissioner during any income year and the revocation applies only to short term trade credits created on or after the commencement of the subsequent income year.

  4. An election under subsection (1) may be made in respect of—

  5. all short term trade credits of the taxpayer; or
    1. 1 or more classes of short term trade credits of the taxpayer that the taxpayer defines by reference either—
      1. to the particular currency in which the short term trade credit is denominated; or
        1. to the term of the short term trade credit; or
          1. to both the term and the particular currency in which the short term trade credit is denominated.

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