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YA 1: Definitions
or “Explaining what words mean”
You could also call this:

“Explaining how the meaning of 'income tax' can change in different tax situations”

When you hear about ‘income tax’, it can mean different things in different situations. Here’s what you need to know:

Income tax can include something called ancillary tax in some parts of the law. This applies when talking about the overriding effect of certain matters, double tax agreements, and some sections of the Tax Administration Act 1994.

In some cases, income tax also includes taxes that are part of tax recovery agreements with other countries.

When dealing with tax avoidance, income tax includes ancillary tax, but not excluded ancillary tax.

If you’re looking at income tax from another country, it means a tax that’s very similar to New Zealand’s income tax. This can include taxes that work like provisional tax, PAYE, RWT, or NRWT.

In some situations, like when talking about imputation rules or branch equivalent tax accounts, income tax can include provisional tax that a person has already paid.

Remember, these definitions can change depending on which part of the tax law you’re looking at, so it’s important to check the specific context.

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Next up: YA 3: Treatment of qualifying company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax

or “This rule about various tax treatments has been removed from the law”
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Part Y Definitions and related matters
General definitions

YA 2Meaning of income tax varied

  1. The term income tax includes ancillary tax in—

  2. section BB 3(2) (Overriding effect of certain matters):
    1. section BH 1 (Double tax agreements):
      1. sections 107A to 108B of the Tax Administration Act 1994.

        1. The term income tax includes a tax that is prescribed in a tax recovery agreement made under Part 10A of the Tax Administration Act 1994 in—

        2. section BB 3(2):
          1. section BH 1.

            1. The term income tax includes ancillary tax, but not excluded ancillary tax, in—

            2. section BB 3(1):
              1. sections BG 1 (Tax avoidance), GA 1 (Commissioner’s power to adjust), and GB 54 (Arrangements involving establishments):
                1. the definition of tax avoidance.

                  1. When section GA 1 is applied in the case of an ancillary tax,—

                  2. the words taxable income in section GA 1(2) are treated as replaced by the words liability to the ancillary tax; and
                    1. the following paragraph is treated as added to section GA 1(5): (e) an amount subject to the ancillary tax.

                      1. The term income tax, when specifically used in relation to tax of another country, whether imposed by a central, state, or local government,—

                      2. means a tax of substantially the same nature as income tax imposed under section BB 1 (Imposition of income tax); and
                        1. includes a tax, imposed as a collection mechanism for the foreign tax, that is of substantially the same nature as provisional tax, pay-as-you-earn (PAYE), resident withholding tax (RWT), or non-resident withholding tax (NRWT).

                          1. Repealed

                          2. The term income tax, in relation to tax that has been paid by a person, includes provisional tax in—

                            1. the imputation rules:
                              1. subpart OE (Branch equivalent tax accounts (BETA)).

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                                Notes
                                • Section YA 2(3)(b): amended (with effect on 1 July 2018), on , by section 279(1) (and see section 279(2) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                                • Section YA 2(5): amended (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 133(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                • Section YA 2(6) heading: repealed (with effect on 30 June 2009), on , pursuant to section 558(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                • Section YA 2(6): repealed (with effect on 30 June 2009), on , by section 558(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                • Section YA 2(7) heading: replaced, on , by section 289(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                                • Section YA 2(7)(a): repealed, on , by section 289(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                                • Section YA 2 list of defined terms FDP rules: repealed, on , by section 289(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).