Plain language law

New Zealand law explained for everyone

Schedule 24: International tax rules: grey list countries
or “List of countries with special tax rules for international business income”

You could also call this:

“Rules about overseas investments that are considered foreign investment funds”

This schedule talks about foreign investment funds. It is split into three parts that cover different aspects of these funds.

Part A of the schedule deals with entities that are treated as foreign investment funds. Part B lists foreign entities that are not exempt from the foreign investment fund rules.

Part C used to be about foreign entities that couldn’t use the accounting profits method, but this part has been removed from the schedule.

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Next up: Schedule 26: Low tax jurisdictions or territories

or “List of places with very low taxes (no longer used)”

Home
Income Tax Act 2007
Schedule 25: Foreign investment funds

25Foreign investment funds

Part AEntities treated as foreign investment funds

Part BForeign entities to which the FIF exemptions do not apply

Part CForeign entities for which accounting profits method may not be used (Repealed)

A 1 Title A 2 Commencement

Part A:
Purpose and interpretation

AA 1 Purpose of Act AA 2 Interpretation AA 3 Definitions AA 4 Crown bound

Part B:
Core provisions

Purpose

BA 1 Purpose

Income tax and resulting obligations

BB 1 Imposition of income tax BB 2 Main obligations BB 3 Overriding effect of certain matters

Calculating and satisfying income tax liabilities

BC 1 Non-filing and filing taxpayers BC 2 Annual gross income BC 3 Annual total deduction BC 4 Net income and net loss BC 5 Taxable income BC 6 Income tax liability of filing taxpayer BC 7 Income tax liability of person with schedular income BC 8 Satisfaction of income tax liability

Income, deductions, and timing

BD 1 Income, exempt income, excluded income, non-residents' foreign-sourced income, and assessable income BD 2 Deductions BD 3 Allocation of income to particular income years BD 4 Allocation of deductions to particular income years

Withholding liabilities

BE 1 Withholding liabilities

Other obligations

BF 1 Other obligations

Avoidance

BG 1 Tax avoidance

Double tax agreements

BH 1 Double tax agreements

Part C:
Income

General rules

CA 1 Amounts that are income CA 2 Amounts that are exempt income or excluded income

Income from business or trade-like activities

CB 1 Amounts derived from business CB 2 Amounts received on disposal of business assets that include trading stock CB 3 Profit-making undertaking or scheme CB 4 Personal property acquired for purpose of disposal CB 5 Business of dealing in personal property CB 6A Disposal within 2 years: bright-line test for residential land CB 6AB Residential land transferred in relation to certain family trusts and other capacities CB 6AC Residential land transferred in relation to certain Māori family trusts CB 6AE Certain transfers of residential land included in settlement of claim under the Treaty of Waitangi CB 6 Disposal: land acquired for purpose or with intention of disposal CB 7 Disposal: land acquired for purposes of business relating to land CB 8 Disposal: land used for landfill, if notice of election CB 9 Disposal within 10 years: land dealing business CB 10 Disposal within 10 years: land development or subdivision business CB 11 Disposal within 10 years of improvement: building business CB 12 Disposal: schemes for development or division begun within 10 years CB 13 Disposal: amount from major development or division and not already in income CB 14 Disposal: amount from land affected by change and not already in income CB 15 Transactions between associated persons CB 15B When land acquired

Income from holding property (excluding equity)

CC 1 Land CC 1B Consideration relating to grant, renewal, extension, or transfer of leasehold estate or licence CC 1C Consideration for agreement to surrender leasehold estate or terminate licence CC 2 Non-compliance with covenant for repair CC 3 Financial arrangements CC 4 Payments of interest CC 5 Annuities CC 6 Prizes received under Building Societies Act 1965 CC 7 Consideration other than in money CC 8 Use of money interest payable by Commissioner CC 8B Certain commercial bills: non-resident holders CC 9 Royalties CC 10 Films CC 11 Lessee acquiring lease asset on expiry of term of lease CC 12 Lessor acquiring lease asset on expiry of term of lease CC 13 Amounts paid in income years after hire purchase agreement ends CC 14 NZ IFRS 16 leases

Income from equity

CD 1 Dividend CD 2 Distribution excluded from being dividend CD 3 Meaning of dividend CD 4 Transfers of company value generally CD 5 What is a transfer of company value? CD 6 When is a transfer caused by a shareholding relationship? CD 7 Bonus issues in lieu of dividend CD 7B Shares issued under profit distribution plans CD 8 Elections to make bonus issue into dividend CD 9 Interests in money or property of foreign unit trust CD 10 Bonus issue by foreign unit trust instead of money or property CD 11 Avoidance arrangements CD 12 Superannuation schemes entering trust rules CD 13 Notional distributions of producer boards and co-operative companies CD 14 Notional distributions of emigrating companies CD 15 Tax credits linked to dividends CD 16 Certain dividends not increased by tax credits CD 17 Credit transfer notice CD 18 Dividend reduced if foreign tax paid on company’s income CD 19 Foreign tax credits and refunds linked to dividends CD 20 Benefits of shareholder-employees or directors CD 21 Attributed repatriations from controlled foreign companies CD 22 Returns of capital: off-market share cancellations CD 23 Ordering rule and slice rule CD 23B Returns of capital: shares repurchased under profit distribution plans CD 24 Returns of capital: on-market share cancellations CD 25 Treasury stock acquisitions CD 26 Capital distributions on liquidation or emigration CD 27 Property made available intra-group CD 28 Transfers of certain excepted financial arrangements within wholly-owned groups CD 29 Non-taxable bonus issues CD 29B Issues to shareholders of rights to subscribe for or sell back shares CD 29C Transfers to shareholders by ASX-listed Australian company of shares in subsidiary CD 30 Transfer by unit trust of legal interest after beneficial interest vests CD 31 Flat-owning companies CD 32 Employee benefits CD 33 Payments corresponding to notional distributions of producer boards and co-operative companies CD 34 Distribution to member of co-operative company based on member’s transactions CD 34B Distributions to members of co-operative companies CD 35 Resident’s restricted amalgamations CD 36 Foreign investment fund income CD 36B Foreign superannuation withdrawals and pensions from foreign superannuation scheme CD 37 Maori authority distributions CD 38 General calculation rule for transfers of company value CD 39 Calculation of amount of dividend when property made available CD 40 Adjustment if dividend recovered by company CD 41 Adjustment if amount repaid later CD 42 Adjustment if additional consideration paid CD 43 Available subscribed capital (ASC) amount CD 44 Available capital distribution amount CD 45 When does a person have attributed repatriation from a controlled foreign company? CD 46 New Zealand repatriation amount CD 47 New Zealand property amount CD 48 Cost of tangible property CD 49 Cost of associated party equity CD 50 Outstanding balances of financial arrangements CD 51 Property transfers between associated persons CD 52 Unrepatriated income balance CD 53 Prevention of double taxation of share cancellation dividends CD 54 Replacement payments

Employee or contractor income

CE 1 Amounts derived in connection with employment CE 1B General rule: accommodation provided by employers CE 1C Exception: overseas accommodation CE 1D Exception: accommodation provided by Defence Force CE 1E Exception: accommodation provided to ministers of religion CE 1F Treatment of amounts derived by cross-border employees CE 2 Benefits under employee share schemes CE 3 Restrictions on disposal of shares under share purchase agreements CE 4 Adjustments to value of benefits under share purchase agreements

Definitions

CE 5 Meaning of expenditure on account of an employee CE 6 Trusts are nominees CE 7 Meaning of employee share scheme CE 7B Meaning of share scheme taxing date CE 7C Meaning of employee share scheme beneficiary CE 7CB Meaning of market value CE 7D Meaning of replacement employee share scheme CE 8 Attributed income from personal services CE 9 Restrictive covenants CE 10 Exit inducements CE 11 Proceeds from claims under policies of income protection insurance CE 12 Tax credits for personal service rehabilitation payments

Income from living allowances, foreign superannuation, compensation, and government grants

CF 1 Benefits, pensions, compensation, and government grants CF 2 Remission of specified suspensory loans CF 3 Withdrawals from foreign superannuation scheme

Recoveries

CG 1 Amount of depreciation recovery income CG 2 Remitted amounts CG 2B Remitted amounts on discharge from bankruptcy CG 2C Remitted and other amounts: companies in liquidation CG 2D Remitted and other amounts: companies leaving groups CG 2E Remitted and other amounts: income apportionment CG 3 Bad debt repayment CG 4 Receipts for expenditure or loss from insurance, indemnity, or otherwise CG 5 Recoveries or receipts by employers from superannuation schemes CG 5B Receipts from insurance, indemnity, or compensation for interruption or impairment of business activities CG 6 Receipts from insurance, indemnity, or compensation for trading stock CG 7 Recoveries after deduction of payments under lease CG 7B Disposals or applications after earlier deductions CG 7C Disposal or rerecognition of derecognised non-depreciable assets CG 8 Capital contributions CG 8B Recoveries after deductions for high-priced bloodstock removed from New Zealand CG 8C Recoveries after deductions for high-priced bloodstock disposed of to non-residents CG 9 Recovery of deductions for aircraft engine overhaul

Adjustments

CH 1 Adjustment for closing values of trading stock, livestock, and excepted financial arrangements CH 2 Adjustment for prepayments CH 3 Adjustment for deferred payment of employment income CH 4 Adjustment for change to accounting practice CH 5 Adjustment for GST CH 6 Adjustments for certain finance and operating leases CH 7 Adjustment for avoidance arrangements CH 8 Market value substituted CH 9 Interest apportionment: excess debt entity CH 10 Interest apportionment: reporting bank CH 10B Interest apportionment: public project debt

Expenditure other than for entities’ purposes

CH 11 Te Awa Tupua and Te Pou Tupua CH 12 Income from hybrid mismatch arrangement CH 13 Feasibility expenditure clawback

Income from voluntary activities

CO 1 Income from voluntary activities

Income from portfolio investment entities

CP 1 Attributed income of investors in multi-rate PIEs

Attributed income from foreign equity

CQ 1 Attributed controlled foreign company income CQ 2 When attributed CFC income arises CQ 3 Calculation of attributed CFC income CQ 4 Foreign investment fund income CQ 5 When FIF income arises CQ 6 Calculation of FIF income CQ 7 Treatment of attributing interests subject to returning share transfer

Income from insurance

CR 1 Policyholder base income of life insurer CR 2 Shareholder base income of life insurer CR 3 Income of non-resident general insurer CR 3B Lloyd’s of London: income from life insurance premiums CR 4 Income for general insurance outstanding claims reserve

Superannuation funds

CS 1 Withdrawals CS 2 Exclusions of withdrawals of various kinds CS 3 Exclusion of withdrawal on grounds of hardship CS 4 Exclusion of withdrawal to settle division of relationship property CS 5 Exclusion of withdrawal paid as annuity or pension CS 6 Exclusion of withdrawal on partial retirement CS 7 Exclusion of withdrawal when member ends employment CS 8 Exclusion of withdrawal when member ends employment: lock-in rule CS 9 Exclusion of withdrawal from defined benefit fund when member ends employment CS 10 When member treated as not ending employment CS 10B Exclusion of permitted withdrawals from KiwiSaver schemes and complying superannuation funds CS 11 Transfer by superannuation fund to another superannuation fund CS 12 Transfer from superannuation scheme to superannuation fund CS 13 Investment by superannuation fund in another superannuation fund CS 14 Superannuation fund becomes superannuation scheme CS 15 Superannuation fund becomes foreign superannuation scheme CS 16 Superannuation scheme becomes superannuation fund CS 17 Superannuation fund wound up CS 18 Value of loan treated as fund income

Income from petroleum mining

CT 1 Disposal of exploratory material or petroleum mining asset CT 2 Damage to assets CT 3 Exploratory well used for commercial production CT 4 Partnership interests and disposal of part of asset CT 5 Petroleum mining operations outside New Zealand CT 5B Resuming commercial production CT 6 Meaning of petroleum miner CT 6B Meaning of petroleum mining operations CT 7 Meaning of petroleum mining asset

Income from mineral mining

CU 1 Mineral miner's income CU 2 Treatment of mining land CU 3 Disposal of mineral mining assets CU 4 Recovery of certain expenditure CU 5 Partnership interests and disposal of part of asset

Definitions

CU 6 Meaning of mineral miner CU 7 Some definitions CU 8 Meaning of listed industrial mineral CU 9 Some definitions CU 10 Mining asset used to derive income other than income from mining CU 11 Meaning of asset for sections CU 3 to CU 10 CU 12 Application of sections to resident mining operators CU 13 Application of sections to non-resident mining operators CU 14 Recovery of reinvestment profit on disposal of mining shares CU 15 Recovery of reinvestment profit not used for mining purposes CU 16 Recovery of reinvestment profit on repayment of loans CU 17 Repayment by mining company of amount written off CU 18 Amount treated as repayment for purposes of section CU 17: excess CU 19 Amount treated as repayment for purposes of section CU 17: net income CU 20 Mining company or mining holding company liquidated CU 21 Meaning of income from mining CU 22 Meaning of mining company CU 23 Meaning of mining development expenditure CU 24 Meaning of mining exploration expenditure CU 25 Meaning of mining operations CU 26 Meaning of mining venture CU 27 Meaning of resident mining operator CU 28 Meaning of specified mineral CU 29 Other definitions

Income specific to certain entities

CV 1 Group companies CV 2 Consolidated groups: income of company in group CV 3 Consolidated groups: arrangement for disposal of shares CV 4 Amalgamated companies: amount derived after amalgamation CV 5 Statutory producer boards CV 6 Crown Research Institutes CV 7 Australian wine producer rebate CV 8 Regulations: Australian wine producer rebate CV 9 Supplementary dividend holding companies CV 10 Foreign dividend payment account companies or conduit tax relief companies CV 11 Maori authorities CV 12 Trustees: amounts received after person’s death CV 13 Amounts derived from trusts CV 14 Distributions from community trusts CV 15 Amounts derived from trusts while person absent from New Zealand CV 16 Non-resident shippers CV 17 Non-exempt charities: taxation of tax-exempt accumulation CV 18 Hedging of currency movements in Australian non-attributing shares and attributing FDR method interests CV 19 Additional income for certain imputation credits CV 20 Employee share schemes

Exempt income

CW 1 Forestry companies established by the Crown, Maori owners, and holding companies acquiring land with standing timber from founders CW 1B Treaty of Waitangi claim settlements: rights to take timber CW 2 Forestry encouragement agreements CW 3 Forestry companies and Maori investment companies CW 3B Pre-1990 forest land units: emissions trading scheme CW 3C Certain partitions or subdivisions of land CW 4 Annuities under life insurance policies CW 5 Payments of interest: post-war credits CW 6 Payments of interest: farm mortgages CW 7 Foreign-sourced interest CW 8 Money lent to government of New Zealand CW 8B Certain amounts derived from use of assets CW 9 Dividend derived from foreign company CW 10 Dividend within New Zealand wholly-owned group CW 10B Dividends derived by council-controlled organisation holding companies CW 11 Dividend of conduit tax relief holding company CW 12 Proceeds of share disposal by qualifying foreign equity investor CW 13 Proceeds from share or option acquired under venture investment agreement CW 14 Dividends derived by qualifying companies CW 15 Dividends paid by qualifying companies CW 16 Allowance of Governor-General and other benefits and privileges CW 16B Accommodation expenditure: out-of-town secondments and projects CW 16C Time periods for certain accommodation expenditure CW 16D Accommodation expenditure: conferences and overnight stays CW 16E Accommodation expenditure: new employees CW 16F Accommodation expenditure: multiple workplaces CW 17 Expenditure on account, and reimbursement, of employees CW 17B Relocation payments CW 17C Payments for overtime meals and certain other allowances CW 17CB Payments for certain work-related meals CW 17CC Payments for distinctive work clothing CW 18 Allowance for additional transport costs CW 19 Amounts derived during short-term visits CW 20 Amounts derived by visiting entertainers including sportspersons CW 21 Amounts derived by visiting crew of pleasure craft CW 22 Amounts derived by overseas experts and trainees in New Zealand by government arrangement CW 23 Income for military or police service in operational area CW 24 Deferred military pay for active service CW 25 Value of board for religious society members CW 26 Jurors’ and witnesses’ fees CW 26B Exempt ESS CW 26C Meaning of exempt ESS CW 26D Meaning of employee CW 26DB Meaning of market value CW 26E Meaning of normal retiring age CW 26F Meaning of share CW 26G Meaning of trustee CW 27 Certain income derived by transitional resident CW 28 Pensions CW 28B Foreign superannuation withdrawal in initial period of residency CW 28C Foreign superannuation withdrawal exceeding given amount CW 29 Reinvested amounts from foreign superannuation schemes in Australia CW 29B Amounts from Australian complying superannuation schemes reinvested in KiwiSaver schemes CW 30 Annuities from Crown Bank Accounts CW 31 Services for members and former members of Parliament CW 32 Maintenance payments CW 33 Allowances and benefits CW 34 Compensation payments CW 35 Personal service rehabilitation payments CW 36 Scholarships and bursaries CW 37 Film production grants CW 38 Public authorities CW 38B Public purpose Crown-controlled companies CW 39 Local authorities CW 40 Local and regional promotion bodies CW 40B Te Urewera Board CW 40C Te Pou Tupua CW 41 Charities: non-business income CW 42 Charities: business income CW 42B Community housing trusts and companies CW 43 Charitable bequests CW 44 Friendly societies CW 45 Funeral trusts CW 46 Bodies promoting amateur games and sports CW 47 TAB NZ and racing clubs CW 48 Income from conducting gaming-machine gambling CW 49 Bodies promoting scientific or industrial research CW 50 Veterinary services bodies CW 51 Herd improvement bodies CW 52 Community trusts CW 52B Disability support services CW 53 Distributions from complying trusts CW 54 Foreign-sourced amounts derived by trustees CW 55 Maori authority distributions CW 55BA Tertiary education institutions and subsidiaries CW 55BAB Rebate of fees paid by FIF CW 55BB Minors' income, to limited extent CW 55B Amounts of exempt income for partners CW 56 Non-resident aircraft operators CW 57 Non-resident company involved in exploration and development activities CW 58 Disposal of companies’ own shares CW 59 New Zealand companies operating in Niue CW 59B Income of and distributions by certain international funds CW 59C Life reinsurance claims from reinsurer outside New Zealand CW 60 Stake money CW 61 Providing standard-cost household service CW 62 Interest paid under the KiwiSaver Act 2006 CW 62B Voluntary activities CW 62C Income from foreign-currency loans used for disallowed residential property CW 63 Avoidance arrangements CW 64 Exemption under other Acts CW 65 New Zealand Railways Corporation restructure: exempt income

Excluded income

CX 1 Goods and services tax CX 1B Treatment of flat-rate credits under platform economy rules

Introductory provisions

CX 2 Meaning of fringe benefit CX 3 Excluded income CX 4 Relationship with assessable income CX 5 Relationship with exempt income

Fringe benefits

CX 6 Private use of motor vehicle CX 7 Employer or associated person treated as having right to use vehicle under arrangement CX 8 Private use of motor vehicle: use by more than 1 employee CX 9 Subsidised transport CX 10 Employment-related loans CX 11 Employment-related loans: loans by life insurers CX 12 Services for members and former members of Parliament CX 13 Contributions to superannuation schemes CX 14 Contributions to sickness, accident, or death benefit funds CX 15 Contributions to funeral trusts CX 16 Contributions to life or health insurance CX 17 Benefits provided to employees who are shareholders or investors CX 18 Benefits provided to associates of both employees and shareholders

Exclusions and limitations

CX 19 Benefits provided instead of allowances CX 19B Transport in vehicle other than motor vehicle CX 19C Certain public transport CX 19D Certain self-powered and low-powered vehicles and vehicle-share services CX 20 Benefits to enable performance of duties CX 21 Business tools CX 22 Benefits to non-executive directors CX 23 Benefits provided on premises CX 24 Benefits related to health or safety CX 25 Benefits provided by charitable organisations CX 26 Non-liable payments CX 27 Assistance with tax returns CX 28 Accommodation CX 29 Entertainment CX 30 Distinctive work clothing CX 31 Contributions to income protection insurance CX 32 Services provided to superannuation fund CX 33 Goods provided at discount by third parties CX 33B Benefits for members of Parliament

Definitions

CX 34 Meaning of emergency call CX 35 Meaning of employee share loan CX 36 Meaning of private use CX 37 Meaning of unclassified benefit CX 38 Meaning of work-related vehicle CX 39 Life insurers and fully reinsured persons CX 40 Superannuation fund deriving amount from life insurance policy CX 41 Resident insurance underwriters CX 42 Disposal of ownership interests in controlled petroleum mining entities CX 43 Farm-out arrangements for mining operations CX 44 Disposal of mining shares CX 45 Disposal of mining shares acquired with reinvestment profit CX 46 Repayment of loans made from reinvestment profit CX 47 Government grants to businesses CX 48 Amounts remitted as condition of new start grant CX 48B Issue of post-1989 forest land units CX 48C Government funding additional to government screen production payments CX 48D Tax credits for expenditure on research and development CX 49 Employer’s superannuation contributions CX 50 Tax credits for KiwiSaver and complying superannuation funds CX 50B Contributions to retirement savings schemes CX 51 Income equalisation schemes CX 51B Disposal of pre-1990 forest land emissions units CX 51C Disposal of fishing quota emissions units CX 52 Refund from environmental restoration account CX 53 Credits for inflation-indexed instruments CX 54 Share-lending collateral under share-lending arrangements CX 54B Transfers of emissions units under certain excepted financial arrangements CX 55 Proceeds from disposal of investment shares CX 55B Proceeds from disposal of certain shares and financial arrangements CX 56 Attributed income of certain investors in multi-rate PIEs CX 56B Distributions to investors in multi-rate PIEs CX 56C Distributions to investors by listed PIEs CX 57 Credits for investment fees CX 57B Amounts derived during periods covered by calculation methods CX 58 Amounts derived by minors from trusts CX 58B Amounts derived by certain close companies from trusts CX 59 Taxable distributions from non-complying trusts CX 60 Intra-group transactions CX 61 Avoidance arrangements CX 62 Amounts of excluded income for partners CX 63 Dividends derived after company ceased to be look-through company CX 64 Income from financial instrument

Terminating provisions

CZ 1 Grandparented shares under employee share schemes CZ 2 Mining company’s 1970–71 tax year CZ 3 Exchange variations on 8 August 1975 CZ 4 Mineral mining: company making loan before 1 April 1979 CZ 5 Exempt interest: overseas money lent to government or local or public authority before 29 July 1983 CZ 6 Commercial bills before 31 July 1986 CZ 7 Primary producer co-operative companies: 1987–88 income year CZ 8 Farm-out arrangements for petroleum mining before 16 December 1991 CZ 9 Available capital distribution amount: 1965 and 1985–1992 CZ 9B Available capital distribution amount: 1988 to 2010 CZ 10 Transitional relief for calculation of attributed repatriation dividends: 2 July 1992 CZ 11 Recovery of deductions for software acquired before 1 April 1993 CZ 12 General insurance with risk period straddling 1 July 1993 CZ 13 Treatment of units and interests in unit trusts and group investment funds on issue as at 1 April 1996 CZ 14 Treatment of superannuation fund interests in group investment funds on 1 April 1999 CZ 15 Accident insurance contracts before 1 July 2000 CZ 16 Interest payable to exiting company: 2001 CZ 17 Dividend of exiting company: 2001 CZ 18 Benefit provider approved within 6 months of 25 November 2003 CZ 19 Community trust receipts in 2004–05 or 2005–06 tax year CZ 20 Disposal of personal property lease asset under specified lease CZ 21 Superannuation fund loans made to members before 1 April 1989 CZ 21B Optional treatment of withdrawals from foreign superannuation schemes not included in return or assessed before 1 April 2014 CZ 22 Geothermal wells between 31 March 2003 and 17 May 2006 CZ 23 Insurance or compensation for buildings replaced as revenue account property affected by Canterbury earthquakes CZ 23 Employee benefits for Canterbury earthquake relief: exempt income CZ 23B Employee benefits for North Island flooding events: exempt income CZ 24 Employee benefits for Canterbury earthquake relief: not fringe benefits CZ 24B Employee benefits for North Island flooding events relief: not fringe benefits CZ 25 Land and buildings as revenue account property affected by Canterbury earthquakes and replaced—insurance or compensation, Government purchase CZ 25B Land and buildings as revenue account property affected by Hurunui/Kaikōura earthquakes and replaced—insurance or compensation CZ 25C Land or buildings as revenue account property affected by North Island flooding events and replaced—insurance or compensation CZ 25D Improvements to farmland and horticultural plants affected by North Island flooding events and replaced—insurance or compensation CZ 26 Land and buildings affected by Canterbury earthquakes—sections CB 9 to CB 11 and CB 14 overridden for Crown purchases CZ 26B Land and buildings affected by North Island adverse weather event—sections CB 6A and CB 9 to CB 11 overridden for local authority and Crown purchases CZ 27 Prior bad debt deductions clawback CZ 28 Transitional provision for mineral mining: previously appropriated mining expenditure CZ 29 Accommodation expenditure: Canterbury earthquake relief CZ 29B Accommodation expenditure: North Island flooding events CZ 30 Transitional provision: application of certain accommodation provisions CZ 31 Accommodation expenditure: New Zealand Defence Force CZ 32 Treatment of certain petroleum storage facilities CZ 33 Transitional exception for accommodation provided to ministers of religion CZ 34 Income arising from tax accounting provision for aircraft engine overhauls CZ 35 Treatment of backdated payments for social rehabilitation: 2008–09 to 2017–18 income years CZ 35 Amounts derived by Te Kōwhatu Tū Moana CZ 36 Treatment of backdated payments for social rehabilitation: 2008–09 to 2017–18 income years CZ 37 Income equalisation schemes CZ 38 Disposals of trading stock to non-associates without business purpose CZ 39 Disposal within 5 years: bright-line test for residential land: acquisition on or after 29 March 2018 CZ 40 Main home exclusion for bright-line: acquisition on or after 29 March 2018 CZ 41 Distributions to supplying shareholders of Fonterra: 2022–23 to 2024–25 income years

Part D:
Deductions

General rules

DA 1 General permission DA 2 General limitations DA 3 Effect of specific rules on general rules DA 4 Treatment of amount of depreciation loss DA 5 Treatment of expenditure for commercial fit-out

Specific rules for expenditure types

DB 1 Taxes, other than GST, and penalties DB 2 Goods and services tax DB 3 Determining tax liabilities DB 3B Use of money interest DB 4 Chatham Islands dues DB 4B Fees to purchase funds in tax pooling accounts DB 5 Transaction costs: borrowing money for use as capital DB 6 Interest: not capital expenditure DB 7 Interest: most companies need no nexus with income DB 8 Interest: money borrowed to acquire shares in group companies DB 9 Interest incurred on money borrowed to acquire shares in qualifying companies DB 10 Interest or expenditure connected to profit-related debentures DB 10B Interest or expenditure connected to stapled debt security DB 11 Negative base price adjustment DB 12 Base price adjustment under old financial arrangements rules DB 13 Repayment of debt in certain circumstances DB 14 Security payment DB 15 Sureties DB 16 Share-lending collateral under share-lending arrangements DB 17 Replacement payments and imputation credits under share-lending arrangements DB 17B Transfers of emissions units under certain excepted financial arrangements DB 18AA Square metre rate method DB 18A Ring-fenced allocations: disposal of residential land within 5 years DB 18AB Deduction cap: disposal of residential land within 5 years to associated persons DB 18 Transaction costs: leases DB 19 Expenses in application for resource consent DB 20 Destruction of temporary building DB 20B Consideration for agreement to grant, renew, extend, or transfer leasehold estate or licence DB 20C Consideration for agreement to surrender leasehold estate or terminate licence DB 21 Amounts paid for non-compliance with covenant for repair DB 22 Amounts paid for non-compliance and change in use DB 22B Amounts paid for commercial fit-out for building DB 23 Cost of revenue account property DB 23B Revenue account property: certain intra-group transactions DB 23C Revenue account property: cost of some residential land reduced DB 24 Share losses DB 25 Cancellation of shares held as revenue account property DB 26 Amount from profit-making undertaking or scheme and not already in income DB 27 Amount from major development or division and not already in income DB 28 Amount from land affected by change and not already in income DB 29 Apportionment when land acquired with other property DB 30 Cost of certain minerals DB 31 Bad debts DB 32 Bad debts owed to estates DB 33 Scientific research DB 34 Research or development DB 35 Some definitions DB 36 Patent expenses DB 37 Expenses in application for patent or design registration DB 38 Patent rights: devising patented inventions DB 39 Patent rights acquired before 1 April 1993 DB 40 Patent applications or patent rights acquired on or after 1 April 1993 DB 40BA Expenses in application for plant variety rights DB 40B Expenditure in unsuccessful development of software DB 41 Charitable or other public benefit gifts by company DB 42 Property misappropriated by employees or service providers DB 43 Making good loss from misappropriation by partners DB 44 Restitution of stolen property DB 45 Bribes DB 46 Avoiding, remedying, or mitigating effects of discharge of contaminant or making of noise DB 47 Payments for remitted amounts DB 48 Restrictive covenant breached DB 49 Adjustment for opening values of trading stock, livestock, and excepted financial arrangements DB 50 Adjustment for prepayments DB 51 Adjustment for deferred payment of employment income DB 51B Adjustments for leases that become finance leases DB 51C NZ IFRS 16 leases DB 52 Adjustment for change to accounting practice DB 53 Attributed PIE losses of certain investors DB 54 No deductions for fees relating to interests in multi-rate PIEs DB 54B Expenditure incurred by foreign investment PIEs DB 54C Certain expenditure incurred by foreign PIE equivalents DB 55 Expenditure incurred in deriving exempt dividend DB 56 Expenditure incurred in operating motor vehicle under agreement or arrangement affected by section CX 7 DB 57 Payments to spouses, civil union partners, or de facto partners other than for services DB 57B Matching of deductions and income from multi-jurisdictional arrangements DB 58 Adjustment for avoidance arrangements DB 59 Market value substituted DB 60 Acquisition of emissions units DB 60B Liabilities for emissions DB 61 Surrender of certain emissions units for post-1989 forest land emissions DB 62 Deduction for legal expenses DB 63 Expenses in paying dividends DB 63B Periodic company registration fees DB 63C Meetings of shareholders DB 64 Capital contributions DB 65 Allowance for certain commercial buildings DB 65B Allowance for embedded fit-out of certain commercial buildings DB 66 Feasibility expenditure: spread deduction DB 67 Feasibility expenditure: immediate deduction DB 68 Amounts paid for utilities distribution assets

Employee or contractor expenditure

DC 1 Lump sum payments on retirement DC 2 Pension payments to former employees DC 3 Pension payments to former partners DC 3B Payments to working owners DC 4 Payments to working partners DC 5 Payments to spouses, civil union partners, or de facto partners: services DC 6 Contributions to employees’ benefit funds DC 7 Contributions to employees’ superannuation schemes DC 8 Attribution of personal services DC 9 Restrictive covenants or exit inducements DC 10 Disposal of business: transferred employment income obligations DC 11 Transfers of employment income obligations to associates DC 12 Loans to employees under share purchase schemes DC 13 Criteria for approval of share purchase schemes: before period of restriction ends DC 14 Criteria for approval of share purchase schemes: when period of restriction ends DC 15 Some definitions

Entertainment expenditure

DD 1 Entertainment expenditure generally DD 2 Limitation rule DD 3 When limitation rule does not apply DD 4 Employment-related activities DD 5 Promoting businesses, goods, or services DD 6 Entertainment as business or for charitable purpose DD 7 Entertainment outside New Zealand DD 8 Entertainment that is income or fringe benefit DD 9 Relationship with fringe benefit tax rules DD 10 Interpretation: reimbursement and apportionment DD 11 Some definitions

Motor vehicle expenditure

DE 1 What this subpart does DE 2 Deductions for business use DE 2B Election to use kilometre rate method or costs method DE 3 Methods for calculating proportion of business use DE 4 Default method for calculating proportion of business use DE 5 Actual records DE 6 Using logbook for test period DE 7 Logbook requirements DE 8 Logbook term DE 9 Inadequate logbook DE 10 Variance during logbook term DE 11 Replacement vehicles DE 12 Kilometre rate method

Government grants, funding, and compensation

DF 1 Government grants to businesses DF 2 Repayment of grant-related suspensory loans DF 3 Identifying expenditure for purposes of sections DF 1 and DF 2 DF 4 Payments for social rehabilitation DF 5 Government funding additional to government screen production payments

Expenditure related to use of certain assets

DG 1 What this subpart does DG 2 Application of this subpart DG 3 Meaning of asset for this subpart DG 4 Meaning of private use for this subpart DG 5 Meaning and treatment of interest expenditure for this subpart DG 6 Associated persons: company rule modified DG 7 Expenditure related to income-earning use DG 8 Expenditure limitation rule DG 9 Apportionment formula DG 10 Interest expenditure rules DG 11 Interest expenditure: close companies DG 12 Interest expenditure: group companies DG 13 Interest expenditure: corporate shareholders DG 14 Interest expenditure: non-corporate shareholders DG 15 Quarantined expenditure rules DG 16 Quarantined expenditure when asset activity negative DG 17 Allocation of amounts quarantined under section DG 16 DG 18 Quarantined expenditure: group companies and shareholders DG 19 Allocation of amounts quarantined under section DG 18 DG 20 When income cannot be separately attributed DG 21 Opting out of treatment under this subpart DG 22 Application of rules to part years

Interest incurred in relation to certain land

DH 1 Interest related to certain land DH 2 When this subpart applies DH 3 When this subpart applies: companies DH 4 When this subpart does not apply: exemptions for new builds, development, social or emergency or transitional housing, and council housing DH 5 Key terms DH 6 Interposed residential property percentage DH 7 Grandparented residential interest DH 8 Deduction not allowed DH 9 Exception to limited denial of deductions: loans denominated in foreign currencies DH 10 Limited denial of deductibility: simplified calculation of interest affected DH 11 Denied amounts: treatment upon disposal of disallowed residential property DH 12 Valuation

Attributed losses from foreign equity

DN 1 Attributed controlled foreign company loss DN 2 When attributed CFC loss arises DN 3 Calculation of attributed CFC loss DN 4 Ring-fencing cap on deduction DN 5 Foreign investment fund loss DN 6 When FIF loss arises DN 7 Calculation of FIF loss DN 8 Ring-fencing cap on deduction: attributable FIF income method DN 9 Treatment of certain costs incurred in acquiring FIF interests

Farming and aquacultural business expenditure

DO 1 Enhancements to land DO 2 Plantings for erosion, shelter, and water protection purposes DO 3 Trees on farms DO 4 Improvements to farm land DO 5 Expenditure on land: planting of listed horticultural plants DO 6 Expenditure on land: horticultural replacement planting DO 7 Accounting for expenditure on listed horticultural plants under sections DO 5 and DO 6 DO 8 Meaning of planting and plot DO 9 Meaning of replaced area fraction DO 9B Meaning of diminished value DO 10 Farming or horticulture expenditure of lessor or sublessor DO 11 Improvement destroyed or made useless DO 11B Entering partners’ livestock deduction DO 12 Improvements to aquacultural business DO 13 Improvement destroyed or made useless

Forestry expenditure

DP 1 Expenditure of forestry business DP 2 Plant or machinery DP 3 Improvements to forestry land DP 4 Improvement destroyed or made useless DP 5 Forestry encouragement agreement: deductions DP 6 Forestry encouragement agreement: no deduction DP 7 Land contouring: no deduction DP 8 Forestry business on land acquired from the Crown, Maori owners, or holding company: no deduction DP 9 Cost of acquiring timber: forestry business on land acquired from the Crown, Maori owners, or holding company DP 9B Treaty of Waitangi claim settlements: rights to take timber DP 10 Cost of acquiring timber or right to take timber: other cases DP 11 Cost of timber

Income equalisation schemes and environmental restoration accounts schemes

DQ 1 Main income equalisation scheme DQ 2 Adverse event income equalisation scheme DQ 3 Thinning operations income equalisation scheme DQ 4 Environmental restoration accounts scheme

Life insurance business expenditure

DR 1 Policyholder base allowable deduction of life insurer DR 2 Shareholder base allowable deduction of life insurer DR 3 Life reinsurance premiums to reinsurer outside New Zealand DR 4 Life insurers' claims

Film industry expenditure

DS 1 Acquiring film rights DS 2 Film production expenditure DS 2B Expenditure when film or film right intended for disposal DS 3 Clawback of deductions for film reimbursement schemes DS 4 Meaning of film reimbursement scheme

Petroleum mining expenditure

DT 1A Ring-fenced allocations DT 1 Petroleum exploration expenditure DT 2 Arrangement for petroleum exploration expenditure and disposal of property DT 3 Acquisition of privileges and permits DT 4 Acquisition of exploratory material DT 5 Petroleum development expenditure DT 6 Expenditure on petroleum mining assets DT 7 Exploratory well expenditure DT 7B Resuming commercial production: petroleum development expenditure DT 8 Acquisition of certain petroleum mining assets DT 9 Disposal of petroleum mining asset to associate DT 10 Disposal of petroleum mining asset outside association DT 11 Association ending DT 12 Damage to assets DT 13 Disposal of ownership interests in controlled petroleum mining entities DT 14 Farm-out arrangements DT 15 Persons associated with petroleum miner DT 16 Decommissioning DT 17 Attribution of expenditure DT 18 Replacement permits DT 19 Partnership interests and disposal of part of asset DT 20 Petroleum mining operations outside New Zealand

Mineral mining expenditure

DU 1 Mining expenditure: prospecting and exploration expenditure DU 2 Mining expenditure: rehabilitation expenditure DU 3 Acquisition of land for mining operations DU 4 Acquisition of mineral mining assets DU 5 Farm-out arrangements DU 6 Deduction for certain mining expenditure spread over assumed life of mine DU 7 Deduction for certain mining expenditure spread on basis of units of production

Classes of mining expenditure

DU 8 Classes of mineral mining expenditure DU 9 Some definitions DU 10 Meaning of mining exploration expenditure DU 11 Meaning of mining development expenditure: exclusion of operational expenditure DU 12 Meaning of mining rehabilitation expenditure

Expenditure specific to certain entities

DV 1 Publicising superannuation funds DV 2 Transfer of expenditure to master fund DV 3 Formula for calculating maximum deduction DV 4 Carry forward of expenditure DV 4B Carry forward of expenditure by member funds investing in portfolio investment entities DV 5 Investment funds: transfer of expenditure to master funds DV 6 Formula for calculating maximum deduction DV 7 Carry forward of expenditure DV 8 Non-profit organisations DV 9 Trusts DV 10 Building societies DV 11 Distribution to member of co-operative company, excluded from being dividend DV 12 Maori authorities: donations DV 13 Group companies DV 14 Amalgamated company: expenditure on improvements for farming, horticultural, aquacultural, and forestry businesses DV 15 Amalgamated companies: property passing on resident’s restricted amalgamation DV 16 Consolidated groups: intra-group transactions DV 17 Consolidated groups: expenditure or loss incurred by group companies DV 18 Statutory producer boards and co-operative companies DV 18B Cost base for shares when debt remitted within economic group DV 19 Association rebates DV 20 Partners DZ 20B Expenditure incurred while income-earning activity interrupted by North Island flooding event DV 21 Losses for QCs entering partnership regime DV 22 Owners of look-through companies DV 23 Losses for QCs entering look-through companies rules DV 24 Losses for QCs becoming sole traderships DV 25 Hedging of currency movements in Australian non-attributing shares and attributing FDR method interests DV 26 Deduction for reinstatement of R&D tax losses DV 27 Employee share schemes DV 28 Exempt employee share schemes

Expenditure specific to certain industries

DW 1 Airport operators DW 2 Bloodstock racing DW 3 Non-resident general insurers and shippers DW 3B Lloyd’s of London: deductions for life insurance business DW 4 Deduction for general insurance outstanding claims reserve DW 5 Aircraft operators: aircraft engines and aircraft engine overhauls DW 6 Aircraft operators: payments and adjustments under finance leases

Other expenditure

DX 1 Testamentary annuities DX 2 Tax credits: conduit financing arrangements DX 3 Tax credits: supplementary dividend holding companies

Terminating provisions

DZ 1 Commercial bills before 31 July 1986 DZ 2 Life insurers acquiring property before 1 April 1988 DZ 3 Petroleum mining: development expenditure from 1 October 1990 to 15 December 1991 DZ 4 Expenditure on abandoned exploratory well before 16 December 1991 DZ 5 Farm-out arrangements for petroleum mining before 16 December 1991 DZ 6 Partnership interests and disposal of part of asset before 16 December 1991 DZ 7 Petroleum mining operations outside New Zealand before 16 December 1991 DZ 8 Acquiring patent rights before 1 April 1993 DZ 9 Premium paid on land leased before 1 April 1993 DZ 10 General insurance with risk period straddling 1 July 1993 DZ 11 Film reimbursement scheme on or before 30 June 2001 DZ 12 Mineral mining: 1954–2005 DZ 13 Enhancements to land unamortised at end of 2004–05 year DZ 14 Deductions under specified leases DZ 15 Patent applications before 1 April 2005 DZ 16 Geothermal wells between 31 March 2003 and 17 May 2006 DZ 17 Expenditure on improvements to aquacultural business before 1995–96 income year DZ 18 Expenditure on improvements to forestry land before 1995–96 income year DZ 19 Attributed CFC loss carried back under section EZ 32C DZ 20 Expenditure incurred while income-earning activity interrupted by Canterbury earthquake DZ 21 Transfer in 2013–14 income year of assets to which subpart DG applies DZ 22 Aircraft maintenance: aircraft engines acquired before 2017–18 income year DZ 23 Aircraft maintenance: tax accounting provisions for expenditure incurred after 2016–17 income year

Part E:
Timing and quantifying rules

Matching rules: revenue account property, prepayments, and deferred payments

EA 1 Trading stock, livestock, and excepted financial arrangements EA 2 Other revenue account property EA 3 Prepayments EA 4 Deferred payment of employment income

Valuation of trading stock (including dealer’s livestock)

Valuation of livestock

EC 1 Application of this subpart EC 2 Valuation of livestock EC 3 Livestock valuation methods EC 4 Transfers of livestock within wholly-owned groups EC 4B Compulsory use of herd scheme method for associated persons EC 4C Value and timing of transfers EC 5 Transfer of livestock because of self-assessed adverse event EC 6 Application of sections EC 7 to EC 27 EC 7 Valuation methods EC 8 Restrictions arising from use of herd scheme EC 9 Restrictions on use of national standard cost scheme EC 10 Restrictions on use of cost price method EC 11 Restrictions on making of elections EC 12 Interests in livestock EC 13 Changes in partnership interests

Herd scheme

EC 14 Herd scheme EC 15 Determining national average market values EC 16 Valuation under herd scheme EC 17 Herd value ratio EC 18 Inaccurate herd value ratio EC 19 Chatham Islands adjustment to herd value EC 20 Herd livestock disposed of before values determined EC 21 Herd livestock on death before values determined

National standard cost scheme

EC 22 National standard cost scheme EC 23 Determining national standard costs EC 24 Methods for determining costs using national standard cost scheme

Other methods

EC 25 Cost price, replacement price, or market value EC 26 Bailee’s treatment of livestock EC 26B Entering partners' cost base

Definitions

EC 27 Some definitions EC 28 Application of sections EC 29 to EC 31 EC 29 Determining standard values EC 30 Closing value methods EC 31 Enhanced production EC 32 Application of sections EC 33 to EC 37 EC 33 Determining depreciation percentages EC 34 General rule EC 35 Livestock reaching national average market value and livestock no longer used for breeding EC 36 Immature livestock and recently acquired livestock EC 37 Bailment EC 38 Application of sections EC 39 to EC 48 EC 39 First income year in breeding business EC 39B Stud-founding bloodstock and related terms EC 39C Setting and publication of national minimum price threshold EC 40 Later income years in breeding business EC 41 Reduction: bloodstock not previously used for breeding in New Zealand other than as shuttle stallions EC 42 Reduction: bloodstock previously used for breeding in New Zealand EC 43 Accident, birth deformity, or infertility EC 44 Other bloodstock EC 45 Residual value of bloodstock EC 46 Use of bloodstock for racing EC 47 Change of use of bloodstock in course of business EC 47B Removal of high-priced bloodstock from New Zealand after earlier deductions EC 47C When prospective breeders treated as being in breeding business EC 47D Change of prospective bloodstock breeders’ expectation or intention after earlier deductions EC 47E Prospective breeders commencing actual breeding businesses EC 48 Replacement breeding stock

Valuation of excepted financial arrangements

ED 1 Valuation of excepted financial arrangements ED 1B Valuation of emissions units issued for zero price ED 2 Transfers of certain excepted financial arrangements within wholly-owned groups ED 2B Transfers to shareholders by ASX-listed Australian company of shares in subsidiary ED 3 Part-year tax calculations for transfers: general insurance OCR ED 4 Valuation of certain excepted financial arrangements denominated in foreign currency

Depreciation

EE 1 What this subpart does EE 2 Nature of ownership of item EE 3 Ownership of goods subject to reservation of title EE 4 Ownership of lessee’s improvements: lessee EE 5 Ownership of lessee’s improvements: other person EE 6 What is depreciable property? EE 7 What is not depreciable property? EE 8 Election that property not be depreciable EE 9 Description of elements of calculation EE 10 Calculation rule: item temporarily not available EE 11 Calculation rule: income year in which item disposed of EE 12 Depreciation methods EE 13 Application of sections EE 14 to EE 19 EE 14 Diminishing value or straight-line method: calculating amount of depreciation loss EE 15 Amount of adjusted tax value EE 16 Amount resulting from standard calculation EE 17 Amount resulting from petroleum-related depreciable property calculation EE 18 Cost: change from diminishing value to straight-line method EE 18B Cost: some depreciable intangible property EE 19 Cost: fixed life intangible property EE 20 Application of sections EE 21 to EE 24 EE 21 Pool method: calculating amount of depreciation loss EE 22 Cases affecting pool EE 23 Combined pools EE 24 Property ceasing to qualify for pool EE 25 Depreciation loss for plant variety rights application granted in 2005–06 or later income year EE 26 Setting of economic depreciation rate EE 27 Economic rate for certain depreciable property EE 28 Economic rate for buildings EE 29 Economic rate for certain aircraft and motor vehicles EE 30 Economic rate for plant, equipment, or building, with high residual value EE 31 Annual rate for item acquired in person’s 1995–96 or later income year EE 32 Election in relation to certain depreciable property acquired on or after 1 April 2005 EE 33 Annual rate for fixed life intangible property EE 34 Annual rate for patent granted in 2005–06 or later income year EE 34B Annual rate for design registrations EE 35 Special rate or provisional rate EE 36 Using economic rate or provisional rate instead of special rate EE 37 Improvements EE 38 Items of low value EE 39 Items no longer used EE 40 Transfer of depreciable property on or after 24 September 1997 EE 41 Transfer of depreciable property on certain amalgamations on or after 14 May 2002 EE 42 Transfer of radiocommunications licence right on or after 24 September 1997 EE 43 Transfer of depreciable intangible property on or after 1 July 1997 EE 44 Application of sections EE 48 to EE 51 EE 45 Consideration for purposes of section EE 44 EE 46 Items for purposes of section EE 44 EE 47 Events for purposes of section EE 44 EE 48 Effect of disposal or event EE 49 Amount of depreciation recovery income when item partly used for business EE 50 Amount of depreciation loss when item partly used to produce income EE 51 Amount of depreciation recovery income when lost or stolen items recovered EE 52 Amount of depreciation recovery income when compensation received EE 53 Unused geothermal well brought into use EE 54 Cost: GST

Adjusted tax value

EE 55 Meaning of adjusted tax value EE 56 Formula EE 57 Base value in section EE 56 when none of sections EE 58, EE 59, and EZ 22(1) applies EE 58 Base value in section EE 56 when no previous deduction EE 59 Base value in section EE 56 when property is petroleum-related depreciable property EE 60 Total deductions in section EE 56

Definitions

EE 61 Meaning of annual rate EE 62 Meaning of depreciable intangible property EE 63 Meaning of estimated useful life EE 64 Meaning of excluded depreciable property EE 65 Meaning of maximum pooling value EE 66 Meaning of poolable property EE 67 Other definitions

Taxes and levies

EF 1 Fringe benefit tax EF 2 Employer’s superannuation contribution tax EF 3 Accident compensation levies and premiums EF 4 Use of money interest payable by Commissioner EF 5 Use of money interest payable by person EF 6 Different tax years

Recognition of accounting treatment

EG 1 Election to use balance date used in foreign country EG 2 Adjustment for changes to accounting practice EG 3 Allocation of income, deductions, and tax credits by portfolio tax rate entity

Income equalisation schemes

EH 1 Income equalisation schemes EH 2 Deposits to be paid into Crown Bank Account

Application

EH 3 Persons to whom main income equalisation scheme applies

Deposits and accounts

EH 4 Main deposit EH 5 Main income equalisation account

Interest

EH 6 Interest on deposits in main income equalisation account

Deduction

EH 7 Deduction of deposit

Refunds: automatic

EH 8 Refund of excess deposit EH 9 Income does not include excess deposit EH 10 Refund at end of 5 years EH 11 Income when refund given at end of 5 years

Refunds: on application

Refunds: general provisions

EH 27 Amendment of assessment EH 28 Minimum refund EH 29 Deposits from which refunds come

Tax credit

EH 30 When person entitled to tax credit EH 31 Kind and amount of refund that entitles person to tax credit EH 32 Kind of person entitled to tax credit EH 33 Amount of tax credit

Definitions

EH 34 Meaning of income from forestry EH 35 Meaning of main maximum deposit EH 36 Other definitions

Application

EH 37 Persons to whom adverse event income equalisation scheme applies

Deposits and accounts

EH 38 Adverse event deposit EH 39 Adverse event income equalisation account

Interest

EH 40 Interest on deposits in adverse event income equalisation account

Deduction

EH 41 Deduction of deposit

Refunds: automatic

EH 42 Refund of excess deposit EH 43 Income does not include excess deposit

Refunds: on application

EH 44 Application for refund by person, trustee of estate, Official Assignee, or liquidator EH 45 Refund on application EH 46 Income when refund given on application EH 47 Refund on retirement EH 48 Income when refund given on retirement, and election to allocate amount to earlier year EH 49 Refund on death EH 50 Income when refund given on death EH 51 Income when refund given on death, and election to allocate amount to earlier year EH 52 Income when refund given on death, and election to allocate amount to later year or years EH 53 Refund on bankruptcy EH 54 Income when refund given on bankruptcy EH 55 Refund on liquidation EH 56 Income when refund given on liquidation

Refunds: general provisions

EH 57 Amendment of assessment EH 58 Minimum refund EH 59 Deposits from which refunds come

Transfers

EH 60 Transfer of deposit

Definitions

EH 61 Meaning of adverse event maximum deposit EH 62 Other definitions

Application

EH 63 Persons to whom thinning operations income equalisation scheme applies

Deposits and accounts

EH 64 Thinning operations deposit EH 65 Thinning operations income equalisation account

Interest

EH 66 Interest on deposits in thinning operations income equalisation account

Deductions

EH 67 Deduction of deposit

Refunds: automatic

EH 68 Refund of excess deposit EH 69 Income does not include excess deposit

Refunds: on application

EH 70 Application for refund by person or liquidator EH 71 Refund on application EH 72 Income when refund given on application EH 73 Refund for development or recovery EH 74 Income when refund given for development or recovery EH 75 Refund on liquidation EH 76 Income when refund given on liquidation

Refunds: general provisions, and tax credits

EH 77 Sections of main income equalisation scheme that apply to thinning operations income equalisation scheme

Definitions

EH 78 Meaning of thinning operations maximum deposit EH 79 Other definitions

Spreading of specific income

EI 1 Spreading backward of income from timber EI 2 Interest from inflation-indexed instruments EI 3 Assigning or granting copyright EI 4 Spreading income from patent rights EI 4B Consideration for agreement to grant, renew, extend, or transfer leasehold estate or licence EI 5 Amount paid to lessor for non-compliance with covenant for repair EI 6 Amount paid for non-compliance: when lessor ceases to own land EI 7 Leases: income derived in anticipation EI 8 Disposal of land to the Crown EI 9 Matching rule for employment income of shareholder-employee

Spreading of specific expenditure

EJ 1 Spreading backward of deductions for costs of timber EJ 2 Spreading forward of deductions for repairs to fishing boats EJ 3 Spreading forward of fertiliser expenditure EJ 4 Expenditure incurred in acquiring film rights in feature films EJ 5 Expenditure incurred in acquiring film rights in films other than feature films EJ 6 Certification of New Zealand films EJ 7 Film production expenditure for New Zealand films having no large budget film grant EJ 8 Film production expenditure for other films having no large budget film grant EJ 9 Avoidance arrangements EJ 10 Personal property lease payments EJ 10B IFRS leases EJ 11 Amount paid by lessee for non-compliance with covenant for repair EJ 12 Petroleum development expenditure: default allocation rule EJ 12B Petroleum development expenditure: reserve depletion method EJ 13 Permanently ceasing petroleum mining operations EJ 13B Dry well drilled EJ 13C Well not producing EJ 14 Spreading deduction backwards EJ 15 Disposal of petroleum mining asset EJ 16 Disposal of petroleum mining asset to associate EJ 17 Partnership interests and disposal of part of asset EJ 18 Petroleum mining operations outside New Zealand

Definitions

EJ 19 Meaning of offshore development EJ 20 Meaning of petroleum mining development EJ 20B Certain mining expenditure spread over assumed life of mine EJ 20C Length of spreading period EJ 20D Measurement of assumed life of mine and application to rate EJ 20E Certain mining expenditure spread on basis of units of production EJ 21 Contributions to employees’ superannuation schemes EJ 22 Deductions for market development: product of research, development EJ 23 Allocation of deductions for research, development, and resulting market development EJ 24 Allocation of expenditure on aircraft engine overhauls EJ 25 Allocation of expenditure on aircraft engine overhauls: election by IFRS user EJ 26 Allocation of expenditure on aircraft engine overhauls: election by operator of single aircraft EJ 27 Disposal of aircraft engine or aircraft

Environmental restoration accounts

EK 1 Payment to Crown Bank Account EK 2 Persons who may make payment to environmental restoration account EK 3 Payments to environmental restoration account EK 4 Environmental restoration account EK 5 Details to be provided with payment to environmental restoration account EK 6 Interest on payments to environmental restoration account EK 7 Deduction for payment EK 8 Deduction for transfer EK 9 Refund of payment if excess, lacking details EK 10 Certain refunds not income EK 11 Application for refund EK 12 Refund if application or excess balance EK 13 Income when refund given on application EK 14 Application for transfer EK 15 Transfer on application EK 16 Transfer on death, bankruptcy, or liquidation EK 17 Minimum refund or transfer EK 18 Payments from which refunds come EK 19 Environmental restoration account of amalgamating company EK 20 Environmental restoration account of consolidated group company EK 21 Notices in electronic format EK 22 Meaning of maximum payment EK 23 Other definitions

Allocation of deductions for excess residential land expenditure

EL 1 Outline of subpart: general EL 2 Outline of subpart: specific provisions EL 3 Definitions for this subpart EL 4 Allocation of deductions for loss-making residential rental properties EL 5 When residential portfolios sold EL 6 Choosing to apply rules on property-by-property basis EL 7 When property A sold EL 8 Treatment of previously transferred amounts on fully-taxed disposals

Exclusions from rules

EL 9 Main home exclusion EL 10 Exclusion for land held on revenue account EL 11 Exclusion for property held by certain persons and entities EL 12 Exclusion for mixed-use assets EL 13 Exclusion for property provided as employee accommodation

Application of rules by certain entities

EL 14 Continuity rules for companies EL 15 Transfers between companies in wholly-owned groups

Interposed entities

EL 16 Interests in residential land-rich entities EL 17 Calculations for section EL 16 EL 18 Modifications when entities transparent EL 19 Valuation of assets EL 20 Allocation of deductions related to bright-line disposals of residential land

Hedging of currency movements in Australian non-attributing shares and attributing FDR method interests

EM 1 Australian non-attributing shares and attributing FDR method interests EM 2 Who does this subpart apply to? EM 3 What hedges does this subpart apply to? EM 4 Elections EM 5 Fair dividend rate hedge portions: hedge-by-hedge methods EM 5B Fair dividend rate hedge portions: portfolio method EM 6 Income and expenditure for fair dividend rate hedge portions EM 7 Quarterly test of fair dividend rate hedge portions EM 8 Some definitions

Financial arrangements rules

Consideration when financial arrangement involves property or services

EW 32 Consideration for agreement for sale and purchase (ASAP) of property or services, hire purchase agreement, specified option, or finance lease EW 33 Consideration for hire purchase agreement or finance lease EW 33B Foreign ASAPs: designated FX hedges EW 33C Consideration in foreign currency: some agreements for sale and purchase EW 33D Foreign ASAPs: contingencies for business combinations EW 34 Consideration in foreign currency EW 35 Value relevant for non-financial arrangements rule

Consideration treated as paid to person

EW 36 Consideration when person exits from rules: accrued entitlement EW 37 Consideration when person enters rules: accrued obligation EW 38 Consideration when disposal for no, or inadequate, consideration EW 39 Consideration affected by unfavourable factors

Consideration treated as paid by person

Consideration when legal defeasance has occurred

EW 47 Legal defeasance

Consideration for cessation of LTCs and dissolution of partnerships

EW 47B Cessation of LTCs and dissolution of partnerships

Consideration when anti-avoidance provision applies

EW 48 Anti-avoidance provisions EW 49 Income and deduction when debt disposed of at discount to associate of debtor EW 49B Guarantees for associated persons EW 50 Income when debt forgiven to trustee EW 51 Deduction for security payment EW 52 Share supplier under share-lending arrangement EW 52B Excepted financial arrangements involving pre-1990 forest land emissions units EW 53 Adjustment required EW 54 Meaning of cash basis person EW 55 Effect of being cash basis person EW 56 Natural person EW 57 Thresholds EW 58 Financial arrangements, income, and expenditure relevant to criteria EW 59 Exclusion by Commissioner EW 60 Trustee of deceased’s estate EW 61 Election to use spreading method EW 62 When and how calculation of cash basis adjustment required EW 63 Cash basis adjustment formula

Controlled foreign company and foreign investment fund rules

When is a company a controlled foreign company?

EX 1 Meaning of controlled foreign company

Calculation of person’s control interest

EX 2 Four categories for calculating control interests EX 3 Control interest: total of direct, indirect, and associated person interests EX 4 Limits to requirement to include associated person interests EX 5 Direct control interests EX 6 Direct control interests include options and similar rights EX 7 Indirect control interests

Calculation of person’s income interest

EX 8 Income interests: total of direct and indirect interests EX 9 Direct income interests EX 10 Indirect income interests EX 11 Options and similar rights in certain cases EX 12 Reduction of total income interests EX 13 Income interests of partners

Ten percent threshold and variations in income interest level

EX 14 Attribution: 10% threshold, not PIE EX 15 Associates and 10% threshold EX 16 Income interests for certain purposes EX 17 Income interest if variations within period

Calculation of attributed CFC income or loss

EX 18A Scheme for finding person's attributed CFC income or loss EX 18 Formula for calculating attributed CFC income or loss EX 19 Taxable distribution from non-complying trust EX 20 Reduction in attributed CFC loss

Attributable CFC amount and net attributable CFC income or loss

EX 20B Attributable CFC amount EX 20C Net attributable CFC income or loss EX 20D Adjustment of cost fraction for excessively debt funded CFC EX 20E Relative debt-asset ratio for CFC

Calculation of branch equivalent income or loss

EX 21 Attributable CFC amount and net attributable CFC income or loss: calculation rules

Non-attributing active CFCs

EX 21B Non-attributing active CFCs

Tests for non-attributing active CFCs

EX 21C Applicable accounting standards for section EX 21E EX 21D Non-attributing active CFC: default test EX 21E Non-attributing active CFC: test based on accounting standard EX 21F Part-period calculations

Non-attributing Australian CFCs

EX 22 Non-attributing Australian CFCs EX 23 Tax concession grey list CFCs

Change of residence of companies

EX 24 Companies moving to or from New Zealand

Change of CFC’s balance date

EX 25 Change of CFC’s balance date

Ownership measurement concession

EX 26 Use of quarterly measurement

Anti-avoidance rule: stapled stock

EX 27 Anti-avoidance rule: stapled stock

What is a foreign investment fund?

EX 28 Meaning of FIF

Attributing interests in FIFs

EX 29 Attributing interests in FIFs EX 30 Direct income interests in FIFs EX 31 Exemption for ASX-listed Australian companies EX 32 Exemption for Australian unit trusts with adequate turnover or distributions EX 33 Exemption for Australian regulated superannuation savings EX 34 CFC rules exemption EX 35 Exemption for interest in FIF resident in Australia EX 36 Venture capital company emigrating to grey list country: 10-year exemption EX 37 Grey list company owning New Zealand venture capital company: 10-year exemption EX 37B Share in grey list company acquired under venture investment agreement EX 38 Exemptions for employee share schemes EX 39 Terminating exemption for grey list company with numerous New Zealand shareholders EX 40 Foreign exchange control exemption EX 41 Income interest of non-resident or transitional resident EX 42 New resident’s accrued superannuation entitlement exemption EX 42B Interests in foreign superannuation scheme other than FIF superannuation interests EX 43 Non-resident’s pension or annuity exemption

Calculation of FIF income or loss

EX 44 Five calculation methods EX 45 Exclusion of amounts of death benefit EX 46 Limits on choice of calculation methods EX 47 Method required for certain non-ordinary shares EX 47B Method required for shares subject to certain returning share transfers EX 48 Default calculation method EX 49 Accounting profits method EX 50 Attributable FIF income method EX 51 Comparative value method EX 52A Fair dividend rate method: use of different forms EX 52 Fair dividend rate annual method EX 53 Fair dividend rate periodic method EX 54 Fair dividend rate method and cost method: when periods affected by share reorganisations EX 55 Deemed rate of return method EX 56 Cost method EX 57 Conversion of foreign currency amounts: most methods EX 58 Additional FIF income or loss if CFC owns FIF

Relationship with other provisions in Act

EX 59 Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method EX 60 Top-up FIF income: deemed rate of return method EX 61 Top-up FIF income: 1 April 1993 uplift interests

Changing calculation method

EX 62 Limits on changes of method EX 63 Consequences of changes in method

Cases of entry into and exit from FIF rules

EX 64 Migration of persons holding FIF interests EX 65 Changes in application of FIF exemptions EX 66 Entities emigrating from New Zealand EX 66B Entities ceasing to be FIFs EX 67 FIF rules first applying to interest on or after 1 April 2007 EX 67B Revaluation of inherited interests in grey list companies

Measurement of cost

EX 68 Measurement of cost

Change of FIF’s balance date

EX 69 Change of FIF’s balance date

Market value rules

EX 70 Market value of life policy and superannuation entitlements EX 71 Non-market transactions in FIF interests

Commissioner’s default assessment power

EX 72 Commissioner’s default assessment power

Election relating to CFC or FIF

EX 73 Election that CFC not non-attributing active CFC or FIF not non-attributing active FIF

Life insurance rules

EY 1 What this subpart does EY 2 Policyholder base EY 3 Shareholder base EY 4 Apportionment of income of particular source or nature, and of tax credits EY 5 Part-year tax calculations EY 6 Actuarial advice and guidance EY 7 Meaning of claim EY 8 Meaning of life insurance EY 9 Meaning of life insurance policy EY 10 Meaning of life insurer EY 11 Superannuation schemes providing life insurance EY 12 Meaning of life reinsurance EY 13 Meaning of life reinsurance policy EY 14 Life insurance and life reinsurance: how sections relate

Non-participation policies

EY 15 Policyholder base income: non-participation policies EY 16 Policyholder base allowable deductions: non-participation policies EY 16B Policyholder base allowable deductions: consideration for investment management services

Profit participation policies

EY 17 Policyholder base income: profit participation policies EY 18 Policyholder base allowable deductions: profit participation policies

Non-participation policies

EY 19 Shareholder base income: non-participation policies EY 19B Shareholder base income: consideration credited for investment management services EY 20 Shareholder base allowable deductions: non-participation policies

Profit participation policies

EY 21 Shareholder base income: profit participation policies EY 22 Shareholder base allowable deductions: profit participation policies

Non-participation policies: reserves

EY 23 Reserving amounts for life insurers: non-participation policies EY 24 Outstanding claims reserving amount: non-participation policies not annuities EY 25 Premium smoothing reserving amount: non-participation policies not annuities EY 26 Unearned premium reserving amount: non-participation policies not annuities EY 27 Capital guarantee reserving amount: non-participation policies not annuities

Shareholder base other profit: profit participation policies

EY 28 Shareholder base other profit: profit participation policies that are existing business EY 29 Shareholder base other profit: profit participation policies that are new business

Transitional adjustments and annuities

EY 30 Transitional adjustments: life risk EY 31 Annuities EY 32 Mortality profit formula: when partial reinsurance exists EY 33 Mortality profit formula: individual result may be negative only in some cases EY 34 Mortality profit formula: negative result EY 35 How discontinuance profit is calculated EY 36 Discontinuance profit for income year EY 37 Discontinuance profit formula (existing policies) EY 38 Discontinuance profit formula (new policies) EY 39 Discontinuance profit formula (existing policies): when partial reinsurance exists EY 40 Discontinuance profit formula (new policies): when partial reinsurance exists EY 41 Discontinuance profit formulas: individual result may never be negative EY 42 How policyholder income is calculated EY 43 Policyholder income formula EY 43B Policyholder income formula: FDR adjustment EY 43C Policyholder income formula: PILF adjustment EY 44 Policyholder income formula: when partial reinsurance exists EY 45 Policyholder income formula: when life insurance business transferred EY 46 Income from disposal of property EY 47 Deductions for disposal of property EY 48 Non-resident life insurers with life insurance policies in New Zealand EY 49 Non-resident life insurer becoming resident

Terminating provisions

EZ 1 Life insurers acquiring property before 1 April 1988 EZ 2 Deductions for disposal of property: 1982–83 and 1989–90 income years EZ 3 Petroleum development expenditure from 1 October 1990 to 15 December 1991 EZ 4 Valuation of livestock bailed or leased as at 2 September 1992 EZ 4B Cattle destroyed because of Mycoplasma bovis: spreading EZ 5 Reduction: bloodstock not previously used for breeding in New Zealand: pre-1 August 2006 EZ 6 Reduction: broodmare previously used for breeding in New Zealand: pre-1 August 2006 EZ 6B National minimum price threshold for 2019 calendar year EZ 7 Acquiring patent rights before 1 April 1993 EZ 8 Premium paid on land leased before 1 April 1993 EZ 9 Pool method for items accounted for by globo method for 1992–93 income year EZ 10 Pool items accounted for by globo method for 1992–93 income year EZ 11 Amounts of depreciation recovery income and depreciation loss for part business use up to 2004–05 income year EZ 12 Amount of depreciation loss for item acquired from associated person on or before 23 September 1997 EZ 13 Annual rate for item acquired on or after 1 April 1993 and before end of person’s 1994–95 income year EZ 14 Pre-1993 depreciation rate EZ 15 Annual rate for excluded depreciable property: 1992–93 tax year EZ 16 Amount of depreciation loss for plant or machinery additional to section EZ 15 amount EZ 17 Additional amount of depreciation loss: between 16 December 1991 and 1 April 1994 EZ 18 Section EZ 17 amount of depreciation loss when items transferred between companies in wholly-owned group before 1 April 1993 EZ 19 Section EZ 17 amount of depreciation loss when person previously exempt from tax acquires item EZ 20 Adjusted tax value for software acquired before 1 April 1993 EZ 21 Sections EE 45 and EE 47: permanent removal: allowance before 1 April 1995 EZ 22 Base value and total deductions in section EE 56: before 1 April 1995 EZ 23 Economic rate for plant or equipment acquired before 1 April 2005 and buildings acquired before 19 May 2005 EZ 23BA Aircraft acquired before 2017–18 income year: adjusted tax value, base value, reduced; total deductions increased EZ 23B Property acquired after depreciable property affected by Canterbury earthquakes EZ 23BB Interest in property acquired after depreciable property affected by Canterbury earthquakes EZ 23BC Property acquired after depreciable property affected by Hurunui/Kaikōura earthquakes EZ 23BD Loss on disposal of grandparented structure EZ 23BE Property acquired after depreciable property affected by North Island flooding events EZ 23C Insurance for Canterbury earthquake damage of property: treatment as disposal and reacquisition EZ 23D Insurance for Canterbury earthquake damage of property: limit on depreciation recovery income EZ 23E Item treated as available for use if access restricted due to Canterbury earthquake EZ 23F Insurance for Canterbury earthquake damage causing disposal: optional timing rule for income, deductions EZ 23G Insurance for repairs of Canterbury earthquake damage: optional timing rule for income, deductions

Definitions

Expected death strain formulas

EZ 53 How expected death strain is calculated EZ 54 Expected death strain formulas EZ 55 Expected death strain formulas: option when more than 1 life insured EZ 56 Expected death strain formula (life): when annuity payable on death EZ 57 Expected death strain formulas: when annuity payable on survival to date or age specified in policy EZ 58 Expected death strain formula (life): when partial reinsurance exists

Actuarial reserves

EZ 59 Meaning of actuarial reserves EZ 60 Actuarial reserves: calculation

Entry to new life insurance regime: transitional and miscellaneous provisions

EZ 61 Allowance for cancelled amount: spreading EZ 62 Reinsurance transition: life financial reinsurance may be life reinsurance EZ 63 Disposal and acquisition upon entry EZ 64 New Zealand Railways Corporation restructure: purpose and initial amounts for tax purposes EZ 65 Expenditure or loss incurred, and amounts derived EZ 66 Prepayments EZ 67 Leased assets EZ 68 Definitions EZ 69 IFRS financial reporting method: interest-free and low-interest loans EZ 69B IFRS financial reporting method: equity or other comprehensive income EZ 70 Insurance for Canterbury earthquake damage of property: treatment as disposal and reacquisition EZ 71 Insurance for Canterbury earthquake damage of property: limit on depreciation recovery income EZ 72 Item treated as available for use if access restricted due to Canterbury earthquake EZ 73 Insurance for Canterbury earthquake damage causing disposal: optional timing rule for income, deductions EZ 74 Insurance for repairs of Canterbury earthquake damage: optional timing rule for income, deductions EZ 75 Consideration for property or services: IFRS foreign ASAPs before 2014–15 income year EZ 76 Consideration for property or services: non-IFRS foreign ASAPs before 2014–15 income year EZ 77 Substituting debentures repeal: transitional rules EZ 78 Insurance for Hurunui/Kaikōura earthquake damage of property: treatment as disposal and reacquisition EZ 79 Insurance for Hurunui/Kaikōura earthquake damage of property: limit on depreciation recovery income EZ 80 Refund of excess deposit in main income equalisation account as consequence of election under section EZ 4B EZ 81 Refund of excess deposit in adverse event income equalisation account as consequence of election under section EZ 4B EZ 82 Transfers of deposits when adverse event income equalisation accounts abolished EZ 83 Insurance for damage of property caused by North Island flooding events: treatment as disposal and reacquisition EZ 84 Insurance for damage of property caused by North Island flooding events: limit on depreciation recovery income EZ 85 Item treated as available for use if access restricted due to North Island flooding events EZ 86 Insurance for North Island flooding event damage causing disposal: optional timing rule for income, deductions EZ 87 Insurance for repairs of North Island flooding event damage: optional timing rule for income, deductions

Part F:
Recharacterisation of certain transactions

Recharacterisation of certain commercial arrangements

FA 1 What this subpart does FA 2 Recharacterisation of certain debentures FA 2B Stapled debt securities FA 3 Recharacterisation of certain dividends: recovery of cost of shares held on revenue account FA 4 Recharacterisation of shareholder’s base: company reacquiring share FA 5 Assets acquired and disposed of after deduction of payments under lease FA 6 Recharacterisation of amounts derived under finance leases FA 7 Determining amount of loan FA 8 Deductibility of expenditure under finance lease FA 9 Treatment when lease ends: lessee acquiring asset FA 10 Treatment when lease ends: lessor acquiring asset FA 11 Adjustments for leases that become finance leases FA 11B Adjustments for certain operating leases FA 12 Recharacterisation of amounts derived under hire purchase agreements FA 13 Agreements recharacterised as sale with finance provided FA 14 Deductibility of expenditure or loss under hire purchase agreement FA 15 Treatment when agreement ends: seller acquiring property FA 16 Treatment when agreement ends: when seller is cash basis person FA 17 Treatment when agreement ends: when buyer is cash basis person FA 18 Treatment of amounts paid in income years after agreement ends

Transfers of relationship property

FB 1 When this subpart applies FB 1B Meaning of settlement of relationship property and property FB 1C Obligations for periods before and from transfer of property FB 2 Personal property FB 3A Residential land FB 3 Land acquired for certain purposes or under certain conditions FB 4 Land under scheme for major development or division FB 5 Disposal of land FB 6 Timber or right to take timber FB 7 Land with standing timber FB 8 Patent applications and patent rights FB 9 Financial arrangements rules FB 10 Continuity provisions: shares and options FB 10B Look-through companies FB 11 Pension payments to former employees FB 12 Pension payments to former partners FB 13 Trading stock FB 14 Specified livestock FB 15 Specified livestock valued under herd scheme FB 16 Non-specified livestock FB 17 High-priced livestock FB 18 Bloodstock FB 19 Leased assets FB 20 Mining assets FB 21 Depreciable property

Distribution, transmission, and gifts of property

FC 1 Disposals to which this subpart applies FC 2 Transfer at market value FC 3 Property transferred to spouse, civil union partner, or de facto partner FC 4 Property transferred to charities or to close relatives and others FC 5 Land transferred to close relatives FC 6 Forestry assets transferred to close relatives FC 7 Transfer of prepaid property FC 8 Transfer of certain financial arrangements FC 9 Residential land transferred to executor, administrator, or beneficiary on death of person

Exceptions for residential land transferred to trustees of certain trusts or other entities

FC 9B Residential land: certain transferors FC 9C Residential land: certain recipients FC 9D Residential land: certain recipients of Treaty of Waitangi land FC 10 Transfers from person to Official Assignee under Insolvency Act 2006

Rollover relief from the bright-line test

FD 1 Relief from bright-line test for transfers between associated persons FD 2 Relief from bright-line test for Māori rollover trusts FD 3 Certain transfers of residential land included in settlement of claim under Treaty of Waitangi

Interest apportionment on thin capitalisation

FE 1 What this subpart does FE 2 When this subpart applies FE 3 Interest apportionment for individuals FE 4 Some definitions FE 4B Meaning of public project asset, public project debt, and public project participant debt FE 5 Thresholds for application of interest apportionment rules FE 6 Apportionment of interest by excess debt entity FE 6B Alternative apportionment of interest by some excess debt entities FE 7 Apportionment of interest by reporting bank FE 7B Interest on public project debt for certain excess debt entities FE 8 Measurement dates FE 9 Elections FE 10 Currency FE 11 Disregarded increases or decreases in value FE 12 Calculation of debt percentages FE 12B Calculations for group for test and apportionment using interest-income ratio FE 13 Financial arrangements entered into with persons outside group

Debt percentage of New Zealand group

FE 14 Consolidation of debts and assets FE 15 Total group debt FE 16 Total group assets FE 16B Total group non-debt liabilities

Debt percentage of worldwide group

FE 17 Consolidation of debts and assets FE 18 Measurement of debts and assets of worldwide group

New Zealand banking group

FE 19 Banking group’s equity threshold FE 20 Financial value and regulatory value FE 21 Banking group’s New Zealand net equity FE 22 Notional offshore investment FE 23 Banking group’s funding debt FE 24 Regulations

New Zealand group

FE 25 New Zealand group for excess debt entity that is a company or non-resident owning body FE 26 Identifying New Zealand parent FE 27 Establishing companies under parent’s control FE 28 Identifying members of New Zealand group FE 29 Combining New Zealand groups owned by natural persons and trustees FE 30 Ownership interests in companies outside New Zealand group

Worldwide group

FE 31 Worldwide group for corporate excess debt entity if not excess debt outbound company FE 31B Worldwide group for excess debt outbound companies FE 31C CFCs in worldwide group for natural persons or trustees described in section FE 2(1)(g) FE 31D Worldwide group for entity controlled by non-resident owning body or trustee FE 32 Joint venture parties

New Zealand banking group

FE 33 New Zealand banking group FE 34 Identifying ultimate parent FE 35 Persons who may be excluded from banking groups FE 36 Identifying members of New Zealand banking group in usual case FE 36B Identifying members of New Zealand banking group: Crown-owned, no interest apportionment FE 37 Reporting bank for New Zealand banking group FE 38 Measuring ownership interests in companies FE 39 Direct ownership interests FE 40 Tiered ownership interests FE 41 Treatment of associated persons’ interests

Interest apportionment for conduit investment

FF 1 What this subpart does FF 2 When interest apportionment rule applies FF 3 Steps required to determine treatment of excessive interest expenditure FF 4 Threshold for application of interest apportionment rule FF 5 Determination of excess amount of interest expenditure of group FF 6 Conduit tax relief FF 7 Surplus to foreign dividends FF 8 Identifying members of foreign groups FF 9 Calculating debt percentage of New Zealand foreign groups FF 10 Calculating debt percentage of consolidated foreign groups FF 11 Changes in foreign group membership

Treatment of notional loans to New Zealand branches of foreign banks

FG 1 When this subpart applies FG 2 Notional loans FG 3 Notional interest

Hybrid and branch mismatches of deductions and income from multi-jurisdictional arrangements

FH 1 Subpart implements OECD recommendations for domestic law FH 2 Order of application of provisions FH 3 Payments under financial instruments producing deduction without income FH 4 Receipts under financial instruments producing deduction without income FH 5 Payments by New Zealand resident or New Zealand deducting branch producing deduction without income FH 5B Exception: when payee group not allowed deductions for supplies as prerequisites for payer supplies FH 6 Receipts from non-resident or foreign deducting branch producing deduction without income FH 7 Payments to person outside New Zealand producing deduction without income FH 8 Expenditure or loss through hybrid entity or foreign deducting branch producing double deduction without double income FH 9 Expenditure or loss of hybrid entity, or non-resident through deducting branch, producing double deduction without double income FH 10 Expenditure or loss of dual resident company producing double deduction without double income FH 11 Residents, or non-residents with deducting branches, having expenditure funding overseas hybrid mismatches FH 12 Offset of mismatch amounts against surplus assessable income FH 13 Election by borrower under financial arrangement FH 14 Irrevocable election by owner of hybrid entity FH 15 Definitions

Emigration of resident companies

FL 1 What this subpart does FL 2 Treatment of companies that become non-resident and their shareholders FL 3 Treatment of companies that start being treated as non-resident and their shareholders

Consolidated groups of companies

FM 1 What this subpart applies to FM 2 Consolidation rules FM 3 Liability of consolidated groups and group companies FM 4 Limiting joint and several liability of group companies FM 5 Liability when company leaves consolidated group FM 6 Some general rules for treatment of consolidated groups

Accounting generally

FM 7 Treatment of amounts derived or expenditure incurred FM 8 Transactions between group companies: income FM 9 Amounts that are company’s income FM 10 Expenditure: intra-group transactions FM 11 Expenditure: nexus with income derivation FM 12 Expenditure when deduction would be denied to consolidated group FM 13 Capital expenditure FM 14 Part-year financial statements

Accounting for particular property

FM 15 Amortising property and revenue account property FM 16 Land or business: certain farming or forestry expenditure FM 17 Trading stock FM 18 Financial arrangements: transfer from company A to company B FM 19 Financial arrangements: transfer for fair and reasonable consideration FM 20 Financial arrangements: transfer at market value FM 21 Property transfers when companies leave consolidated groups FM 22 Arrangements to avoid consolidation rules FM 23 Arrangements for disposal of shares

Treatment of foreign dividends

FM 24 General treatment of foreign dividends FM 25 Reduction in payments for foreign dividends FM 26 Using tax losses to pay FDP FM 27 Refunds of FDP FM 28 Refund when consolidated group has loss FM 29 Treatment of credit balance in consolidated group’s FDP account FM 30 Application of certain provisions to consolidated groups

Eligibility and restrictions

FM 31 Eligibility rules FM 32 Restriction on membership of consolidated groups FM 33 When membership is reduced

Nominated companies

FM 34 Nominated companies

Forming, joining, or leaving consolidated groups

FM 35 Forming consolidated group FM 36 Joining existing consolidated group FM 37 Leaving consolidated group

When membership starts and stops

FM 38 Notice requirements on forming or joining consolidated group FM 39 Choosing to leave consolidated group FM 40 Losing eligibility to be part of consolidated group FM 41 No nominated company FM 42 When company liquidated

Imputation groups of companies

FN 1 When this subpart applies FN 2 Imputation rules FN 3 Liabilities of companies in imputation group FN 4 Eligibility rules FN 5 Imputation groups with reduced numbers FN 6 Nominated companies FN 7 Forming imputation groups FN 8 Trans-Tasman imputation groups and resident imputation subgroups FN 9 Joining existing imputation group FN 10 When membership of imputation group ends FN 11 Company choosing to leave imputation group FN 12 Company no longer eligible or entitled to membership FN 13 Imputation group with no nominated company FN 14 Effect of liquidation of company

Amalgamation of companies

Terminating provisions

FZ 1 Treatment of interest payable under debentures issued before certain date FZ 2 Effect of specified lease on lessor and lessee FZ 3 Income of lessor under specified lease FZ 4 Deductions under specified leases FZ 5 Commercial bills FZ 6 Transitional valuation rule for estate property FZ 7 Valuation of group assets: insurance proceeds from Canterbury earthquake FZ 7B Valuation of group assets: insurance proceeds from North Island flooding events FZ 8 Transition period for amendments to interest apportionment rules FZ 9 Transfers of trading stock to non-associates, donee organisations, or public authorities

Part G:
Avoidance and non-market transactions

Avoidance: general

GA 1 Commissioner’s power to adjust GA 2 Commissioner’s power to adjust: fringe benefit tax

Avoidance: specific

Arrangements involving residential land

GB 52 Arrangements involving residential land: companies’ shares GB 53 Arrangements involving residential land: trusts GB 53B Interposed residential property percentage: increases or decreases in value GB 53C On-lending at lower rate GB 54 Arrangements involving establishments GB 55 Arrangements involving tax credits for charitable or other public benefit gifts GB 56 Arrangements involving research and development tax credits

Market value substituted

GC 1 Certain disposals of trading stock at below market value GC 2 Disposals of timber rights or standing timber GC 3 Disposals by life insurers GC 3B Disposals of emissions units GC 4 Disposals and acquisitions of FIF attributing interests GC 4B Disposals of ETS units at below market value GC 5 Leases for inadequate rent GC 6 Purpose and application of rules and nature of arrangements GC 7 Excess amount payable by person GC 8 Insufficient amount receivable by person GC 9 Compensating arrangement: person paying less than arm’s length amount GC 10 Compensating arrangement: person receiving more than arm’s length amount GC 11 Applications for matching treatment GC 12 Effect on person's withholding obligations GC 13 Calculation of arm’s length amounts GC 14 Definitions for sections GC 6 to GC 13 GC 15 Aspects of loan adjusted for application of sections GC 16 Credit rating of borrower: other than insuring or lending person GC 17 Credit rating of borrower: insuring or lending person GC 18 Loan features disregarded by rules for transfer pricing arrangements GC 19 Sections GC 15 to GC 18 and financial arrangements entered before application period GC 20 Effect of purchase price allocation agreement GC 21 Purchase price allocation required: no agreement

Terminating provisions

GZ 1 Limitation on section GB 20: petroleum and mineral mining arrangements GZ 2 Arrangements involving cancellation of conduit tax relief credits GZ 3 Donations of trading stock for relief of Canterbury earthquakes GZ 4 Disposals of trading stock to donee organisations or public authorities GZ 5 Disposals of trading stock to non-associates

Part H:
Taxation of certain entities

Qualifying companies (QC)

HA 1 What this subpart does HA 2 Meaning of qualifying company HA 3 Meaning of loss-attributing qualifying company HA 4 Conditions applying HA 5 Elections to become qualifying company HA 6 Corporate requirements HA 7 Shareholding requirements HA 7B Grandparenting requirement HA 8 Shareholders’ personal liability HA 8B No CFC income interests or FIF direct income interests of 10% or more HA 9 Limit on foreign non-dividend income HA 10 Nature of LAQC shares HA 11 When requirements no longer met: qualifying companies HA 11B When requirements no longer met: LAQCs HA 12 Avoidance arrangements HA 13 Qualifying companies’ distributions HA 14 Dividends paid by qualifying companies HA 15 Fully imputed distributions HA 16 Dividends paid by qualifying companies to trustee shareholders HA 17 Dividends derived by qualifying companies HA 18 Treatment of dividends when qualifying company status ends HA 19 Credit accounts and dividend statements HA 20 Attribution of tax losses HA 21 Loss balances not carried forward HA 22 Group companies using tax losses HA 23 Treatment of tax losses on amalgamation HA 24 Treatment of tax losses other than certain foreign losses HA 25 Treatment of certain foreign losses HA 26 Attribution when balance dates differ HA 27 Attribution when loss results in reduction in value of shares HA 28 Elections by trustee shareholders HA 29 Elections by majority shareholders HA 30 When elections take effect HA 31 Revocation of directors’ elections HA 32 Revocation of shareholders’ elections: by notice HA 33 Revocation of shareholders’ elections: by event HA 33B Transitional rules for look-through companies, partnerships, and sole traderships HA 34 Period of grace following death of shareholder HA 35 Period of grace following revocation of election HA 36 Period of grace following revocation of joint election HA 37 Period of grace for new shareholder HA 38 Elections by directors and shareholders required HA 39 Revocation of elections HA 40 Liability for qualifying company election tax HA 41 Calculating qualifying company election tax HA 42 Paying qualifying company election tax HA 43 Meaning of effective interest HA 44 Measuring effective interests

Look-through companies

HB 1 Look-through companies are transparent HB 2 Previous income and expenditure or loss HB 3 Loss balances extinguished HB 4 General provisions relating to disposals HB 5 Disposal of owner’s interests HB 6 Disposal of trading stock HB 7 Disposal of depreciable property HB 8 Disposal of financial arrangements and certain excepted financial arrangements HB 9 Disposal of short-term agreements for sale and purchase HB 10 Disposal of livestock HB 11 Limitation on deductions by persons with interests in look-through companies HB 12 Limitation on deductions by owners of look-through companies: carry-forward HB 13 LTC elections

Trusts

HC 1 What this subpart does HC 2 Obligations of joint trustees for calculating income and providing returns HC 3 Multiple settlements HC 4 Corpus of trust HC 5 Amounts derived by trustees HC 6 Beneficiary income HC 7 Trustee income HC 8 Amounts received after person’s death HC 8B Trustee income in income year of person’s death and following 3 income years HC 9 Classifying trusts HC 10 Complying trusts HC 11 Foreign trusts HC 12 Non-complying trusts HC 13 Charitable trusts HC 14 Distributions from trusts HC 15 Taxable distributions from non-complying and foreign trusts HC 16 Ordering rule for distributions from non-complying and foreign trusts HC 17 Amounts derived as beneficiary income HC 18 Taxable distributions from foreign trusts HC 19 Taxable distributions from non-complying trusts HC 20 Distributions from complying trusts HC 21 Distributions from community trusts HC 22 Use of tax losses to reduce taxable distributions from non-complying trusts HC 23 Temporary absences of beneficiaries HC 24 Trustees’ obligations HC 25 Foreign-sourced amounts: non-resident trustees HC 26 Foreign-sourced amounts: resident trustees HC 27 Who is a settlor? HC 28 Activities treated as those of settlor HC 29 Settlors’ liability to income tax HC 30 Treatment of foreign trusts when settlor becomes resident HC 31 When existing trusts come into tax base HC 31B Value transfer by deferral, or non-exercise, of right to demand payment HC 32 Liability of trustee as agent HC 33 Choosing to satisfy income tax liability of trustee HC 34 Taxable distributions from non-complying trusts HC 35 Beneficiary income of minors HC 36 Trusts and minor beneficiary rule HC 37 Testamentary trusts and minor beneficiary rule HC 38 Beneficiary income of certain close companies HC 39 Trustee income: disabled beneficiary trusts HC 40 De minimis trust

Agents

HD 1 What this subpart does HD 2 Joint liability of principal and agent for tax obligations HD 3 Agents’ duties and liabilities HD 4 Treatment of principals HD 5 Matters between principals and agents HD 6 When relationship effectively that of principal and agent HD 7 Rate and amount of tax HD 8 Circumstances giving rise to agency HD 9 Guardians HD 10 Mortgagees in possession HD 11 Nominated companies HD 12 Trusts HD 13 Unit trusts HD 13B AIM companies HD 14 Companies issuing debentures HD 15 Asset stripping of companies HD 16 Non-resident general insurers HD 17 Agent paying premiums to residents of Switzerland HD 17B Lloyd’s of London: agents for life insurance HD 18 Agency in relation to absentees generally HD 19 Persons receiving absentees’ income HD 20 Persons carrying on business for absentees HD 20B General partners and partners carrying on with or managing business involving absentees HD 21 Companies HD 22 Banking companies HD 23 Trustees of group investment funds HD 24 Shipping businesses HD 25 Persons remitting amounts outside New Zealand HD 26 Agency in relation to non-residents generally HD 27 Employers HD 28 Government pensions and payments under superannuation schemes HD 29 Persons acquiring goods from overseas HD 30 Members of wholly-owned large multinational group

Mutual associations

HE 1 Income and deductions of mutual associations HE 2 Classes of mutual transaction HE 3 Association rebates HE 4 Apportionment when transactions with members and non-members HE 5 Association rebates paid by shares or credit

Maori authorities

HF 1 Maori authorities and the Maori authority rules HF 2 Who is eligible to be a Maori authority? HF 3 Applying provisions to Maori authorities HF 4 What constitutes a Maori authority distribution? HF 5 Notional distributions of co-operative companies HF 6 Tax treatment of Maori authority distributions HF 7 Taxable Maori authority distributions HF 8 Proportional allocation

Table H1Consequences of change in entity status for purposes of Maori authority rules

HF 9 Treatment of companies and trusts that choose to apply this subpart HF 10 Market value calculations HF 11 Choosing to become Maori authority

Joint venturers, partners, and partnerships

HG 1 Joint venturers HG 2 Partnerships are transparent HG 3 General provisions relating to disposals HG 4 Disposal upon final dissolution HG 5 Disposal of partner’s interests HG 6 Disposal of trading stock HG 7 Disposal of depreciable property HG 8 Disposal of financial arrangements and certain excepted financial arrangements HG 9 Disposal of short-term agreements for sale and purchase HG 10 Disposal of livestock HG 11 Limitation on deductions by partners in limited partnerships HG 12 Limitation on deductions by partners in limited partnerships: carry-forward

Portfolio investment entities

Portfolio investment entities

Introductory provisions

HM 1 Outline of subpart and relationship with other Parts HM 2 What is a portfolio investment entity? HM 3 Foreign PIE equivalents HM 4 Who is an investor? HM 5 What is an investor class? HM 6 Intended effects for multi-rate PIEs and investors HM 6B Optional look-through rules for certain PIEs

Entry rules

HM 7 Requirements

Requirements

HM 8 Residence in New Zealand HM 9 Collective schemes HM 10 Exclusion: life insurance business HM 11 Investment types HM 12 Income types HM 13 Maximum shareholdings in investments HM 14 Minimum number of investors HM 15 Maximum investor interests HM 16 Associates combined HM 17 Same rights to all investment proceeds HM 18 Requirements for listed PIEs: unlisted companies HM 19 Requirements for listed PIEs: fully crediting distributions HM 19B Modified rules for foreign investment zero-rate PIEs HM 19C Modified rules for foreign investment variable-rate PIEs HM 20 Re-entering as PIE: 5-year rule

Exceptions

HM 21 Exceptions for certain investors HM 22 Exceptions for certain funds HM 23 Exceptions for foreign PIE equivalents

Exit rules

HM 24 Immediate loss of PIE status HM 25 When entity no longer meets investment or investor requirements HM 26 Starting life insurance business HM 27 When multi-rate PIE no longer meets investor interest adjustment requirements HM 28 When listed PIE no longer meets requirements HM 29 Choosing to cancel status HM 30 When foreign PIE equivalent no longer meets requirements

Rules for multi-rate PIEs

Introductory provisions

HM 31 Rules for multi-rate PIEs HM 32 Rules for and treatment of investors in multi-rate PIEs HM 33 Proxies for PIE investors

Attributing income to investors

HM 34 Attribution periods HM 35 Determining net amounts and taxable amounts HM 35B Treatment of certain provisions made by multi-rate PIEs HM 35C Determining amounts for notified foreign investors HM 36 Calculating amounts attributed to investors HM 36B Calculating PIE schedular income adjustments for natural person investors HM 37 When income cannot be attributed HM 38 When superannuation fund investor has conditional entitlement HM 39 New investors in existing investor classes HM 40 Deductions for attributed PIE losses for zero-rated and exiting investors equal to amount attributed

Calculating and paying tax liability

HM 41 Options for calculation and payment of tax HM 42 Exit calculation option HM 42B Part-year tax calculations for PIEs under the exit calculation option for the 2010–11 tax year HM 43 Quarterly calculation option HM 44 Provisional tax calculation option HM 44B NRWT calculation option HM 45 Voluntary payments HM 46 Calculation process HM 47 Calculation of tax liability or tax credit of multi-rate PIEs

Adjusting investors’ interests

HM 48 Adjustments to investor interests or to distributions

Using tax credits

HM 49 Tax credits: when sections HM 50 to HM 55 apply HM 50 Attributing credits to investors HM 51 Use of foreign tax credits by PIEs HM 52 Use of foreign tax credits by zero-rated and certain exiting investors HM 53 Use of tax credits other than foreign tax credits by PIEs HM 54 Use of tax credits other than foreign tax credits by investors HM 55 Tax credits for losses HM 55C Modified source rules HM 55D Requirements for investors in foreign investment PIEs HM 55E Changes in status of investors in foreign investment PIEs HM 55F Treatment of income attributed to notified foreign investors HM 55FB Notified foreign investors and tax credits for supplementary dividends HM 55G Allowable amounts and thresholds for income with New Zealand source HM 55H Treatment when certain requirements for foreign investment PIEs not met

Prescribed and notified rates for investors in multi-rate PIEs

HM 56 Prescribed investor rates: schedular rates HM 57 Prescribed investor rates for certain investors: 0% HM 57B Prescribed investor rates for new residents HM 58 Transition of rate for certain investors HM 59 Prescribed investor rates for certain investors: 0% HM 60 Notified investor rates HM 60B Investor rates provided by Commissioner HM 61 Certain exiting investors zero-rated

Exit levels and periods

HM 62 Exit levels for investors HM 63 Exit periods

Losses of certain multi-rate PIEs

HM 64 Use of investor classes’ losses HM 65 Use of land losses of investor classes

Formation losses

HM 66 Formation losses carried forward to tax year HM 67 Formation losses carried forward to first quarter HM 68 When formation losses carried forward are less than 5% of formation investment value HM 69 When formation losses carried forward are 5% or more of formation investment value: 3-year spread HM 70 Maximum amount of formation losses allocated by multi-rate PIEs to investor classes

Elections and consequences

HM 71 Choosing to become PIE HM 71B Choosing to become foreign investment PIE HM 72 When elections take effect HM 73 Transition: provisional tax HM 74 Transition: entities with non-standard income years HM 75 Transition: treatment of shares held in certain companies HM 76 Transition: FDPA companies

Other entities

HR 1 Partnerships and joint ventures HR 2 Group investment funds HR 3 Definitions for section HR 2: group investment funds HR 4 Government Superannuation Fund HR 4B Activities relating to New Zealand Superannuation Fund and Venture Capital Fund HR 5 Airport operators: general HR 6 Airport operator’s assets HR 7 Meaning of airport operator’s activities HR 8 Transitional residents HR 9 Debt funding special purpose vehicles are transparent if election made by originator HR 9BA Elections to treat debt funding special purpose vehicles as transparent HR 9B Bankruptcy-remote property during application of section HR 9 HR 10 What happens when vehicle stops being transparent debt funding special purpose vehicle? HR 11 Non-exempt charities: initial tax base HR 12 Non-exempt charities: treatment of tax-exempt accumulations HR 13 Lloyd’s of London: life insurance

Terminating provisions

HZ 1 Distributions from trusts of pre-1989 tax reserves HZ 2 Trusts that may become complying trusts HZ 3 Special partnerships: transition into limited partnerships and limited partnerships deduction rules HZ 4 Overseas limited partnerships: transition into limited partnerships deduction rules HZ 4B Qualifying companies: transition into partnership HZ 4C Qualifying companies: transition into look-through companies HZ 4D Qualifying companies: transition into sole traderships HZ 4E Transition out of LTC regime for Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 HZ 5 Transitional provisions for PIE rules HZ 6 Saving of binding rules relating to portfolio investment entities HZ 7 Saving of binding rulings relating to settlements on trusts HZ 8 Retrospective transitional provision for market valuation under section HB 4 HZ 9 Elections to treat existing debt funding special purpose vehicles as transparent HZ 10 What happens when election is made under section HZ 9? HZ 11 Protection from non-compliance: Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020

Part I:
Treatment of tax losses

General rules for tax losses

IA 1 What this subpart does IA 2 Tax losses IA 3 Using tax losses in tax year IA 3B Tax losses and procedures under Insolvency Act 2006 IA 4 Using loss balances carried forward to tax year IA 5 Restrictions on companies’ loss balances carried forward: continuity of ownership IA 6 Restrictions on companies grouping tax losses IA 7 Restrictions relating to ring-fenced tax losses IA 8 Restrictions relating to schedular income IA 9 Ordering rules IA 10 Amended assessments

Carrying forward companies’ loss balances: continuity of business activities

IB 1 Purpose IB 2 Meaning of ownership continuity breach IB 2B When subsequent ownership continuity breach regarded as occurring IB 3 When tax loss components of companies carried forward despite ownership continuity breach IB 4 Business continuity period IB 5 When group companies treated as single company

Grouping tax losses

IC 1 Company A making tax loss available to company B IC 2 Threshold levels for grouping tax losses in tax year IC 3 Common ownership: group of companies IC 4 Common ownership: wholly-owned groups of companies IC 5 Company B using company A’s tax loss IC 6 Common ownership for period IC 7 Place of incorporation or carrying on business IC 8 Limitations on amounts used IC 9 Date for payment and notice to Commissioner IC 10 When companies have different balance dates IC 11 Reduction of amounts used by companies IC 12 Bad debts or decline in value of shares IC 13 Variation of requirements for development companies in Niue

Use of tax losses by consolidated groups

ID 1 Treatment of tax losses by consolidated groups ID 2 Pre-consolidation losses: general treatment ID 3 Pre-consolidation losses: use by group companies ID 4 Pre-consolidation losses on entry: part-year rule ID 5 Pre-consolidation losses on exit: part-year rule

Treatment of tax losses on amalgamation of companies

IE 1 When this subpart applies IE 2 Treatment of tax losses by amalgamating company IE 3 Treatment of tax losses by amalgamated company IE 4 Group companies’ treatment of tax losses on amalgamation IE 5 Applying the continuity provisions when companies amalgamate

Meeting requirements for part-years

IP 1 When this subpart applies IP 2 Group companies’ common span IP 3 Ownership continuity breach: tax loss components of companies carried forward IP 3B Business continuity breach: tax loss components of companies carried forward IP 4 Breach in income year in which tax loss component arises IP 5 Breach in tax year in which loss balance is grouped IP 6 Financial statements required IP 7 Notices required

Attributed controlled foreign company net losses and foreign investment fund net losses

IQ 1A When this subpart applies IQ 1 General treatment IQ 1B Losses carried forward to tax year IQ 2 Ring-fencing cap on attributed CFC net losses IQ 2B Effect of attributed CFC net loss and FIF net loss from before first affected year IQ 2C Effect of FIF net loss if attributed FIF income method not available IQ 3 Ring-fencing cap on FIF net losses IQ 4 Group companies using attributed CFC net losses IQ 5 Group companies using FIF net losses IQ 6 Pre-consolidation losses: general treatment IQ 7 When group membership lacking in loss period IQ 8 When group membership lacking in tax year of use IQ 9 When attributed CFC net loss becomes FIF net loss

Mineral miners' and petroleum miners' tax losses

IS 1 General treatment of mineral miners' net losses IS 2 Treatment of net losses resulting from certain expenditure IS 3 Holding companies’ tax losses IS 4 Adjustments in certain circumstances IS 5 Petroleum miners’ tax losses IS 6 When company stops being mineral miner

Cancellation of life insurer's losses

IT 1 Cancellation of life insurer's policyholder net losses IT 2 Cancellation of life insurer's tax loss when allowed into policyholder base

Treatment of certain supplementary dividends

IV 1 Supplementary dividend holding companies

Use of tax losses to pay shortfall penalties

IW 1 Shortfall penalties

Terminating provisions

IZ 1 Use of specified activity net losses IZ 2 Petroleum mining companies: treatment of payments from shareholders IZ 3 Petroleum mining companies: use of loss balances IZ 4 Tax losses for tax years before 1977–78 tax year IZ 5 Companies’ tax losses for tax years before 1991–92 tax year IZ 6 Companies’ tax losses for 1990–91 and 1991–92 tax years IZ 7 Grouping tax losses for tax years before 1981–82 and between 1981–82 and 1991–92 IZ 7B Grouping tax losses for commonality periods starting before 15 March 2017 for tax years after 1990–91 IZ 8 Election to use net loss for 2019–20 or 2020–21 year as tax loss in preceding year

Part L:
Tax credits and other credits

General rules for tax credits

LA 1 What this Part does LA 2 Satisfaction of income tax liability LA 3 When total tax credit less than or equal to income tax liability LA 4 When total tax credit more than income tax liability LA 5 Treatment of remaining credits LA 6 Remaining refundable credits: PAYE, RWT, and certain other items LA 7 Remaining refundable credits: tax credits for social policy and other initiatives LA 8 Remaining refundable credits: non-resident withholding tax LA 8B General rules particular to life insurers LA 9 Use of tax credits LA 10 Meaning of tax credit

Tax credits for payments, deductions, and family payments

LB 1 Tax credits for PAYE income payments LB 1B Treatment of tax credits of certain companies with shareholders who are employees LB 2 Tax credits for provisional tax payments LB 3 Tax credits for resident withholding tax LB 4 Tax credits for families LB 4BA Tax credits for early childhood education LB 4B Tax credit for R&D tax losses LB 5 Tax credits for non-resident withholding tax LB 6 Tax credits for RSCT LB 6B Tax credits for RLWT LB 7 Tax credits related to personal service rehabilitation payments: providers LB 8 Tax credits related to personal service rehabilitation payments: payers

Tax credits for natural persons

LC 1 When net income under low income amount LC 2 When net income in low income abatement range LC 3 Child’s income LC 4 Tax credits for transitional circumstances LC 5 Meaning of engaged in full-time work LC 6 Tax credits for housekeeping LC 7 Meaning of housekeeper LC 8 Some definitions LC 9 Tax credits for absentees LC 10 Adjustment for change in return date LC 11 Adjustment when person is non-resident for part of tax year LC 12 Assessment when person is non-resident

Tax credits for independent earners

LC 13 Tax credits for independent earners LC 14 Amount of tax credit for independent earners for 1 April 2024 to 30 July 2024 LC 15 Amount of tax credit for independent earners for 31 July 2024 to 31 March 2025

Tax credits for gifts and donations

LD 1 Tax credits for charitable or other public benefit gifts LD 2 Exclusions LD 3 Meaning of charitable or other public benefit gift LD 4 Tax credits for payroll donations LD 5 Calculating amount of tax credit and filing particulars LD 6 When donation is paid to ineligible recipient LD 7 When donation returned to person LD 8 Meaning and ranking of payroll donation

Tax credits for imputation credits

LE 1 Tax credits for imputation credits LE 2 Use of remaining credits by companies and trustees LE 2B Use of remaining credits by life insurer on policyholder base LE 3 Use of remaining credits by others LE 4 Trustees for minor beneficiaries LE 4B Trustees for certain close companies LE 5 Beneficiaries of trusts LE 6 Partners in partnerships LE 7 Credit transfer notices LE 7B Credit of RSCT for imputation credit LE 8 Application of imputation ratio LE 8B Dividends from certain FIF interests LE 9 Application of combined imputation and FDP ratio LE 10 When income tax unpaid LE 11 Evidential requirements

Tax credits for foreign dividend payment (FDP) credits

LF 1 Tax credits for FDP credits LF 2 Trustees for minor beneficiaries LF 3 Beneficiaries of trusts LF 4 Partners in partnerships LF 5 Credit transfer notices LF 6 Application of FDP ratio LF 7 Application of combined imputation and FDP ratio LF 8 Credits for persons who are non-resident or who receive exempt income LF 9 When income tax unpaid LF 10 Evidential requirements

Tax credits for expenditure on research and development

Tax credits for foreign income tax

LJ 1 What this subpart does LJ 2 Tax credits for foreign income tax LJ 3 Meaning of foreign income tax LJ 4 Meaning of segment of foreign-sourced income LJ 5 Calculation of New Zealand tax LJ 6 Taxable distributions and NRWT rules LJ 7 Repaid foreign tax: effect on income tax liability LJ 8 Repaid foreign tax: effect on FDP liability

Tax credits relating to attributed controlled foreign company income

LK 1 Tax credits relating to attributed CFC income LK 2 Calculation of amount of credit LK 3 Currency conversion LK 4 Use of remaining credits LK 5 Companies’ credits carried forward LK 5B Credits from tax year before first affected year LK 6 Use of credits by group companies LK 7 Taxable distributions and NRWT rules LK 8 Tax credits of consolidated companies LK 9 Use of company’s credits carried forward LK 10 When group membership lacking in tax year in which credit arises LK 11 When group membership lacking in tax year in which credit used LK 12 Treatment of credits when companies amalgamate LK 13 Use of credits by amalgamated company LK 14 Use by amalgamated company of credits carried forward LK 15 Use of amalgamating company’s credits

Underlying foreign tax credits (UFTC)

LL 1 What this subpart does LL 2 Tax credits for underlying foreign tax LL 3 Meaning of grey list dividend LL 4 Tracking accounts LL 5 Meaning of foreign dividend company net earnings LL 6 Foreign dividend company lower tier UFTCs LL 7 Conduit financing arrangements LL 8 Currency conversion LL 9 Some definitions

Tax credits for Maori authority credits

LO 1 Tax credits for Maori authority credits LO 2 Beneficiaries of trusts LO 2B Credit of RSCT for Maori authority credit LO 3 Application of Maori authority distribution ratio LO 4 When income tax unpaid LO 5 Evidential requirements

Tax credits for supplementary dividends

LP 1 What this subpart does LP 2 Tax credits for supplementary dividends LP 3 Use of remaining credits LP 4 Continuity rules for carrying credits forward LP 5 Application of benchmark dividend rules and imputation credit ratio LP 6 Deriving supplementary dividend and breach of terms of trust LP 7 Requirements for supplementary dividend holding companies LP 8 Relationship with exempt income rules LP 9 Relationship with RWT rules LP 10 Limitation on deductions

Tax credits of conduit tax relief companies

LQ 1 Tax credits of CTR companies LQ 2 Limitation on amount of credit LQ 3 Determining percentage of non-resident shareholders LQ 4 Date for determining percentage of non-resident shareholders LQ 5 CTR additional dividends

Tax credits for policyholder income

LR 1 Tax credits for policyholder income

Tax credits for multi-rate PIEs and investors

LS 1 Tax credits for multi-rate PIEs LS 2 Tax credits for investors in multi-rate PIEs LS 3 Tax credits for zero-rated investors LS 4 Tax credits for certain exiting investors

Tax credits for petroleum miners

LT 1 Tax credits for petroleum miners LT 2 Petroleum mining operations outside New Zealand

Tax credits for mineral miners

LU 1 Tax credits for mineral miners

Research and development tax credits

LY 1 Research and development tax credits LY 2 Key terms LY 3 When this subpart applies LY 4 Calculation of tax credit LY 5 Eligible research and development expenditure LY 6 Contracted research and development expenditure LY 7 Foreign research and development expenditure LY 8 Carry forward for remaining research and development tax credits LY 9 Orders in Council LY 10 Evaluation

Terminating provisions

LZ 1 Low tax jurisdiction companies LZ 2 Certain development projects LZ 3 Interest derived from development investments LZ 4 Dividends derived from development investments LZ 5 Some definitions LZ 6 Interest on home vendor mortgages LZ 7 Maximum amount of credit under section LZ 6 LZ 8 Meaning of home vendor mortgage LZ 9 Savings in special home ownership accounts LZ 10 Maximum amount for 1 special home ownership account for 1 tax year LZ 11 Maximum amount for all special home ownership accounts for all tax years LZ 12 Meaning of increase in savings LZ 13 Part-year override of section LY 3(2)(b) LZ 14 Research and development tax credits’ refundability: option for 2019–20 income year

Part M:
Tax credits paid in cash

General provisions

MA 1 What this Part does MA 2 Relationship with core provisions MA 3 Excluded income MA 4 Calculation of amounts of credit producing negative amounts MA 5 Advice from outside agencies MA 6 Avoidance arrangements MA 7 Meaning of full-time earner and earner for family scheme MA 8 Some definitions for family scheme

Adjustment of net income for family scheme

Entitlements under family scheme

MC 1 What this subpart does MC 2 Who qualifies for entitlements under family scheme? MC 3 First requirement: person’s age MC 4 Second requirement: principal care MC 5 Third requirement: residence or entitlement to emergency benefit MC 6 When person does not qualify MC 7 When spouse or partner entitled under family scheme MC 8 Continuing requirements MC 9 Credits for person aged 18 MC 10 Principal caregiver MC 11 Relationship periods and entitlement periods

Abating WFF tax credits

MD 1 Abating WFF tax credit MD 2 Calculating net contributions to credits MD 3 Calculation of family tax credit MD 4 Entitlement to in-work tax credit MD 5 First requirement: person’s age MD 6 Second requirement: principal care MD 7 Third requirement: residence MD 8 Fourth requirement: person not receiving benefit MD 9 Fifth requirement: earner MD 10 Calculation of in-work tax credit MD 11 Entitlement to parental tax credit MD 12 Calculation of parental tax credit MD 12B Additional parental tax credit amount included in lump sum if 70-day period crosses 2 tax years MD 13 Calculation of family credit abatement MD 14 Person receiving protected family tax credit MD 15 Family scheme income for purposes of section MD 14 MD 16 Additional parental tax credit abatement amount for lump sum if 70-day period crosses 2 tax years

Minimum family tax credit

ME 1 Minimum family tax credit ME 2 Meaning of employment for this subpart ME 3 Meaning of net family scheme income

Payment of credits

Best Start tax credit

MG 1 Best Start tax credit entitlement MG 2 Best Start tax credit MG 3 Best Start credit abatement MG 4 Person receiving protected Best Start tax credit

FamilyBoost tax credits

MH 1 FamilyBoost tax credits: purpose MH 2 Some definitions MH 3 FamilyBoost tax credit MH 4 Meaning of tax credit income MH 5 FamilyBoost tax credit abatement

Tax credits for KiwiSaver schemes and complying superannuation funds

MK 1 Tax credits for superannuation contributions MK 2 Eligibility requirements MK 3 Payment of tax credits MK 4 Amount of tax credit MK 5 Crown contributions for members MK 6 Credit given by fund providers MK 7 Amounts paid in excess MK 8 Treatment of tax credits on permanent emigration MK 9 Eligibility requirements MK 10 Amount of credit MK 11 When tax credits arise MK 12 Using tax credits MK 13 When short payment and unpaid compulsory employer contributions found after tax credit used MK 14 Employees opting out MK 15 Groups of persons MK 16 Private domestic workers

Tax credits for redundancy payments

ML 1 What this subpart does ML 2 Tax credit for redundancy payments ML 3 Payment by Commissioner

Tax credits for R&D tax losses

MX 1 When subpart applies MX 2 Corporate eligibility criteria MX 3 Wage intensity criteria MX 4 R&D loss tax credits MX 5 Cancellation of R&D tax losses MX 6 Deduction if increase in basic tax rate for company MX 7 Reinstatement of R&D tax losses and R&D repayment tax

Terminating provisions

MZ 1 Entitlement to child tax credit MZ 2 Calculation of child tax credit MZ 3 Exclusions from determination of family scheme income

Part O:
Memorandum accounts

General provisions

OA 1 What this Part does OA 2 Memorandum accounts OA 3 General rules for maintaining memorandum accounts OA 4 Certain credits and debits arising only in group accounts OA 5 Credits OA 6 Debits OA 7 Opening balances of memorandum accounts OA 8 Shareholder continuity requirements for memorandum accounts

General provision

OA 9 General treatment of credits and debits on resident’s restricted amalgamation

When companies amalgamate

OA 10 When credits or debits due to amalgamating company but not recorded OA 11 FDP account on resident’s restricted amalgamation OA 12 CTR account on resident’s restricted amalgamation OA 13 Policyholder credit account on resident’s restricted amalgamation

Amalgamation of companies in consolidated groups

OA 14 Continuity of shareholding when group companies amalgamate OA 15 When credits or debits due to consolidated group but not recorded OA 16 When FDP account ends on resident’s restricted amalgamation OA 17 When policyholder credit account ends on resident’s restricted amalgamation OA 18 Calculation of maximum permitted ratios

Imputation credit accounts (ICA)

OB 1 General rules for companies with imputation credit accounts OB 2 Australian companies with imputation credit accounts OB 3 Imputation credit accounts OB 3B General rule for life insurer's policyholder base OB 4 ICA payment of tax or transfer to account OB 5 ICA deposit in tax pooling account OB 6 ICA transfer from tax pooling account OB 7 ICA payment of further income tax OB 7B ICA payment of qualifying company election tax OB 7C ICA expenditure on research and development OB 8 ICA resident withholding tax withheld OB 9 ICA dividend derived with imputation credit OB 9B ICA attributed PIE income with imputation credit OB 9C ICA credit for research and development tax credit OB 10 ICA dividend derived with FDP credit OB 11 ICA payment of FDP OB 12 ICA transfer from FDP account OB 13 ICA transfer of debit balance on leaving wholly-owned group OB 14 ICA payment of tax on leaving wholly-owned group OB 15 ICA payment of tax on joining wholly-owned group OB 16 ICA attribution for personal services OB 17 ICA transfer from policyholder credit account OB 18 ICA transfer from ASC account OB 19 ICA transfer to master fund OB 19B ICA transfer to loss-using group company OB 20 ICA distribution with Maori authority credit OB 21 ICA balance of Maori authority credit account OB 22 ICA replacement payment to company under share-lending arrangement OB 23 ICA credit transfer to company OB 23B ICA transfer from consolidated imputation group to departing member for unused tax payment OB 24 ICA credit on resident’s restricted amalgamation OB 25 ICA reversal of tax advantage arrangement OB 26 ICA elimination of double debit OB 27 ICA non-resident withholding tax withheld OB 28 ICA payment of amount of tax for schedular payment OB 29 ICA payment of schedular income tax OB 30 ICA payment of dividend OB 31 ICA allocation of provisional tax OB 32 ICA refund of tax or transfer from account OB 33 ICA amount applied to pay other taxes OB 34 ICA refund from tax pooling account OB 35 ICA transfer within tax pooling account OB 35B ICA debit for transfer from tax pooling account for policyholder base liability OB 36 ICA refund of FDP OB 37 ICA refund of tax credit OB 38 ICA overpayment of FDP OB 39 ICA transfer for net foreign attributed income OB 40 ICA attribution for personal services OB 41 ICA debit for loss of shareholder continuity OB 42 ICA on-market cancellation OB 43 ICA breach of imputation ratio OB 44 ICA debit on leaving wholly-owned group OB 45 ICA redemption debit OB 46 ICA transfer from member fund OB 46B ICA transfer from group company to loss-using group company OB 47 Debit for policyholder base imputation credits OB 47B Tax paid by recipients of R&D loss tax credits OB 48 ICA credit balance when Maori authority credit account starts OB 49 ICA replacement payment by company under share-lending arrangement OB 50 ICA returning share transfer OB 51 ICA credit transfer by company OB 52 ICA transfer to consolidated imputation group OB 53 ICA debit on resident’s restricted amalgamation OB 54 ICA tax advantage arrangement OB 55 ICA retrospective imputation credit OB 56 ICA final balance OB 57 ICA refund of NRWT OB 58 ICA refund of amount of tax for schedular payment OB 59 ICA refund of schedular income tax OB 60 Imputation credits attached to dividends OB 61 ICA benchmark dividend rules OB 62 Retrospective attachment of imputation credits OB 63 Australian dividends OB 64 Replacement payments OB 65 Further income tax for ICA closing debit balance OB 66 Further income tax when company stops being ICA company OB 67 Reduction of further income tax OB 68 Income tax paid satisfying liability for further income tax OB 69 Further income tax paid satisfying liability for income tax OB 70 Application of other provisions OB 71 Imputation additional tax on leaving group of companies OB 72 Imputation additional tax on joining wholly-owned group OB 72B Limit on using entitlement to refund after joining wholly-owned group OB 73 Statutory producer boards attaching imputation credits to cash distributions OB 74 Statutory producer boards attaching imputation credits to notional distributions OB 75 Statutory producer boards’ notional distributions that are dividends OB 76 Statutory producer boards attaching FDP credits OB 77 When and how statutory producer board makes election OB 78 Co-operative companies attaching imputation credits to cash distributions OB 78B Co-operative companies attaching imputation credits to cash distributions to groups OB 79 Co-operative companies attaching imputation credits to notional distributions OB 80 Co-operative companies’ notional distributions that are dividends OB 81 Co-operative companies attaching FDP credits OB 82 When and how co-operative company makes election OB 83 Group companies transferring imputation credits with transfer of tax loss OB 84 When and how group company transferring tax loss makes election

Tables of credits and debits in memorandum accounts

Table O1: imputation credits

Table O2: imputation debits

Foreign dividend payment accounts (FDPA)

OC 1 General rules for companies with FDP accounts OC 2 FDP accounts OC 2B General rule for life insurer's policyholder base OC 3 Choosing to become FDPA company OC 4 When company chooses to stop being FDPA company OC 5 When company emigrates OC 6 FDPA payment of FDP OC 7 FDPA dividend derived with FDP credit OC 8 FDPA payment of FDP for transfer from CTR account OC 9 FDPA transfer for net foreign attributed income OC 10 FDPA payment of FDP for conduit debit balance OC 11 FDPA credit transfer to company OC 12 FDPA reversal of tax advantage arrangement OC 13 FDPA payment of dividend OC 14 FDPA refund of FDP OC 15 FDPA overpayment of FDP OC 16 FDPA refund of tax credit OC 17 FDPA credit transfer by company OC 18 FDPA transfer to imputation credit account OC 19 FDPA transfer to CTR account OC 20 Debit for policyholder base FDP credits OC 21 FDPA transfer to group account OC 22 FDPA breach of FDP ratio OC 23 FDPA breach of FDP ratio by PCA company OC 24 FDPA debit for loss of shareholder continuity OC 25 FDPA tax advantage arrangement OC 26 FDPA final balance OC 27 FDP credits attached to dividends OC 28 FDPA benchmark dividend rules OC 29 FDP credits and imputation credits attached to dividends OC 30 Payment of further income tax for closing debit balance OC 31 Payment of further income tax when company no longer New Zealand resident OC 32 Reduction of further income tax OC 33 Income tax paid satisfying liability for further income tax OC 34 Further income tax paid satisfying liability for income tax OC 35 Meaning of FDP reference period OC 36 Meaning of maximum deficit debit OC 37 Meaning of policyholder FDP ratio OC 38 Meaning of reduced deficit debit OC 39 Meaning of shareholder FDP ratio

Table O3: FDP credits

Table O4: FDP debits

Conduit tax relief accounts (CTRA)

OD 1 General rules for companies with CTR accounts OD 2 CTR accounts OD 3 Choosing to become CTR company OD 4 When company stops being CTR company OD 5 CTRA tax credit for conduit tax relief OD 6 CTRA transfer from FDP account OD 7 CTRA dividend derived with CTR credit OD 8 CTRA reduction of FDP OD 9 CTRA reversal of tax advantage arrangement OD 10 CTRA payment of dividend OD 11 CTRA transfer to FDP account OD 12 CTRA transfer to group account OD 13 CTRA adjustment for conduit tax relief OD 14 CTRA break in shareholding chain for group company OD 15 CTRA break in shareholding chain for company OD 16 CTRA increase in resident shareholding OD 17 CTRA breach of CTR ratio OD 18 CTRA tax advantage arrangement OD 19 CTRA final balance OD 20 CTR credits attached to dividends OD 21 CTRA benchmark dividend rules OD 22 CTR credits and imputation credits attached to dividends OD 23 FDP payable for CTR debits OD 24 FDP payable on resident’s restricted amalgamation OD 25 Refunds on transfers to CTR account

Table O5: conduit tax relief credits

Table O6: conduit tax relief debits

Branch equivalent tax accounts (BETA)

OE 1 General rules for persons with branch equivalent tax accounts

Introductory provisions

OE 2 Branch equivalent tax accounts of companies OE 3 Choosing to become BETA company OE 4 When company stops being BETA company OE 5 Treatment of attributed CFC income and FIF income in this subpart

Branch equivalent tax credits

OE 6 BETA payment of income tax on foreign income OE 7 BETA payment of income tax OE 8 BETA unused amount of debit balance OE 9 BETA refund of FDP OE 10 BETA credit for loss of shareholder continuity OE 11 BETA final balance

Treatment of debits from conduit relief

OE 11B Company with debit balance, including debits from conduit relief, in some income years

Branch equivalent tax debits

OE 12 BETA payment of FDP OE 13 BETA reduction in FDP OE 14 BETA refund of income tax OE 15 BETA debit for loss of shareholder continuity OE 16 BETA final balance

Debit if credit balance at beginning of first affected income year

OE 16B Company with credit balance at beginning of first affected income year

Introductory provisions

OE 17 Person choosing to become BETA person OE 18 When person stops being BETA person

Branch equivalent tax credits

OE 19 BETA person’s payment of income tax on foreign income

Branch equivalent tax debits

OE 20 BETA person’s payment of income tax OE 21 BETA person’s refund of income tax OE 22 BETA person’s final balance

Table O7: branch equivalent tax credits

Table O8: branch equivalent tax debits

Table O9: person's branch equivalent tax credits

Table O10: person's branch equivalent tax debits

Available subscribed capital accounts (ASCA)

OF 1 General rules for companies with ASC accounts OF 2 ASC accounts OF 3 Choosing to become ASC account company OF 4 ASCA redemption credit OF 5 ASCA transfer to imputation credit account

Table O11: ASC credits

Table O12: ASC debits

Policyholder credit accounts (PCA)

OJ 1 General rules for companies and other persons with policyholder credit accounts

Introductory provision

OJ 2 Policyholder credit accounts of companies

Policyholder credits of PCA company

OJ 3 PCA transfer from imputation credit account OJ 4 PCA transfer from FDP account OJ 5 PCA transfer of life insurance business OJ 6 PCA credit for maximum deficit in FDP account OJ 7 PCA credit for reduced deficit in FDP account

Policyholder debits of PCA company

OJ 8 PCA payment of tax relating to policyholder base OJ 9 PCA transfer to imputation credit account OJ 10 PCA transfer to group account OJ 11 PCA company’s transfer of life insurance business

Introductory provisions

OJ 12 Choosing to become PCA person OJ 13 Choosing to stop being PCA person

Policyholder credits of PCA person

OJ 14 PCA person’s equivalent credit OJ 15 PCA person’s credit for transfer of life insurance business

Policyholder debits of PCA person

OJ 16 PCA person’s payment of tax relating to policyholder base OJ 17 PCA person’s equivalent debit OJ 18 PCA person’s debit for transfer of life insurance business

Table O13: policyholder credits

Table O14: policyholder debits

Table O15: person's policyholder credits

Table O16: person's policyholder debits

Maori authority credit accounts (MACA)

OK 1 General rules for Maori authorities with Maori authority credit accounts OK 2 MACA payment of tax or transfer to account OK 3 MACA transfer of excess tax from other Maori authorities OK 4 MACA payment of further income tax OK 4B MACA expenditure on research and development OK 5 MACA distribution with Maori authority credit OK 6 MACA dividend derived with imputation credit OK 6B MACA attributed PIE income with imputation credit OK 6C MACA research and development tax credit OK 7 MACA dividend derived with FDP credit OK 8 MACA resident withholding tax withheld OK 9 MACA reversal of tax advantage arrangement OK 10 MACA distribution OK 11 MACA transfer of excess tax to other Maori authorities OK 12 MACA refund of income tax or transfer of excess tax to period or tax type OK 13 MACA payment of other taxes OK 14 MACA refund of FDP OK 14B MACA refund of tax credit OK 15 MACA debit for loss of shareholder continuity OK 16 MACA breach of Maori authority credit ratio OK 17 MACA tax advantage arrangement OK 18 MACA final balance OK 19 Maori authority credits attached to distributions OK 20 MACA benchmark distribution rules OK 21 Further income tax for closing debit balance OK 22 Further income tax paid when Maori authority no longer Maori authority OK 23 Further income tax paid satisfying liability for income tax OK 24 Income tax paid satisfying liability for further income tax

Table O17: Maori authority credits

Table O18: Maori authority debits

Memorandum accounts of consolidated groups

OP 1 Memorandum accounts of consolidated groups OP 2 When credits and debits arise only in group accounts

Introductory provisions

OP 3 Changes in consolidated imputation groups OP 4 Resident imputation subgroups OP 5 When credits and debits arise only in consolidated imputation group accounts OP 6 Provisions applying to consolidated imputation groups

Imputation credits of consolidated imputation groups

Imputation debits of consolidated imputation groups

Table O19: imputation credits of consolidated imputation groups

Table O20: imputation debits of consolidated imputation groups

Introductory provisions

OP 51 FDP accounts of consolidated FDP groups OP 52 Choosing to stop being consolidated FDP group OP 53 When group company emigrates OP 54 When credits and debits arise only in consolidated FDP group accounts OP 55 Provisions applying to consolidated FDP groups

FDP credits of consolidated FDP groups

OP 56 Consolidated FDPA payment of FDP OP 57 Consolidated FDPA payment of further FDP OP 58 Consolidated FDPA dividend derived with FDP credit OP 59 Consolidated FDPA group company’s credit OP 60 Consolidated FDPA credit transfer to company OP 61 Consolidated FDPA transfer from group’s CTR account OP 62 Consolidated FDPA transfer for net foreign attributed income OP 63 Consolidated FDPA reversal of tax advantage arrangement

FDP debits of consolidated FDP groups

Table O21: FDP credits of consolidated FDP groups

Table O22: FDP debits of consolidated FDP groups

Introductory provisions

OP 78 CTR accounts of consolidated groups OP 79 When credits and debits arise only in CTR group accounts OP 80 Provisions applying to consolidated groups with CTR accounts

CTR credits of consolidated groups

OP 81 Consolidated CTRA tax credit for conduit tax relief OP 82 Consolidated CTRA reduction of FDP OP 83 Consolidated CTRA dividend derived with CTR credit OP 84 Consolidated CTRA group company’s credit OP 85 Consolidated CTRA transfer from group’s FDP account OP 86 Consolidated CTRA reversal of tax advantage arrangement

CTR debits of consolidated groups

OP 87 Consolidated CTRA payment of dividend OP 88 Consolidated CTRA transfer to group’s FDP account OP 89 Consolidated CTRA adjustment for conduit tax relief OP 90 Consolidated CTRA group company’s debit OP 91 Consolidated CTRA increase in resident shareholding OP 92 Consolidated CTRA breach of CTR ratio OP 93 Consolidated CTRA tax advantage arrangement OP 94 Consolidated CTRA final balance

Consolidated groups’ FDP payments and refunds

OP 95 FDP payable for credits and debits in group’s CTR account OP 96 Refund on transfer from group’s FDP account

Table O23: conduit tax relief credits of consolidated groups

Table O24: conduit tax relief debits of consolidated groups

Introductory provisions

OP 97 Branch equivalent tax accounts of consolidated BETA groups OP 98 Choosing to stop being consolidated BETA group OP 99 When credits and debits arise only in branch equivalent tax group accounts

Branch equivalent tax credits of consolidated BETA groups

OP 100 Consolidated BETA payment of income tax on foreign income OP 101 Consolidated BETA payment of income tax OP 102 Consolidated BETA remaining debit balances OP 103 Consolidated BETA refund of FDP OP 104 Consolidated BETA credit for loss of shareholder continuity

Treatment by consolidated BETA groups of BETA debits from conduit relief

OP 104B Consolidated BETA group with debit balance, including debits from conduit relief, in certain income years

Branch equivalent tax debits of consolidated BETA groups

OP 105 Consolidated BETA payment of FDP OP 106 Consolidated BETA reduction of FDP OP 107 Consolidated BETA refund of income tax OP 108 Consolidated BETA debit for loss of shareholder continuity

Debit if credit balance at beginning of first affected income year

OP 108B Consolidated BETA group with credit balance at beginning of first affected income year

Table O25: branch equivalent tax credits of consolidated BETA groups

Table O26: branch equivalent tax debits of consolidated BETA groups

Introductory provision

OP 109 Policyholder credit accounts of consolidated groups

Policyholder credits of consolidated groups

OP 110 Consolidated PCA transfer from imputation credit account OP 111 Consolidated PCA transfer from FDP account OP 112 Consolidated PCA group company’s credit OP 113 Consolidated PCA maximum deficit debit in FDP account OP 114 Consolidated PCA reduced deficit debit in FDP account

Policyholder debits of consolidated groups

OP 115 Consolidated PCA payment of tax relating to policyholder base OP 116 Consolidated PCA transfer to imputation credit account

Table O27: policyholder credits of consolidated groups

Table O28: policyholder debits of consolidated groups

Terminating provisions

OZ 1 No imputation credit for pre-imputation tax paid OZ 2 No imputation debit for pre-imputation refund OZ 3 Overpaid income tax for pre-imputation income year OZ 4 Terminating modifications to debits for loss of shareholder continuity OZ 5 ASCA lost excess available subscribed capital OZ 6 ASCA redemption of unused investments OZ 7 Memorandum accounts in transitional period OZ 7B Maori authority credit ratios for transitional period OZ 8 Attaching imputation credits: maximum permitted ratio OZ 9 Benchmark dividends: ratio change OZ 10 Modifying ratios for imputation credits OZ 11 Tax credits for imputation credits OZ 12 Tax credits for non-resident investors OZ 13 Fully credited dividends: modifying actual ratio OZ 14 Dividends from qualifying companies OZ 15 Attaching imputation credits and notional distributions: modifying amounts OZ 16 BETA reductions OZ 17 CTRA reductions OZ 18 Credit-back of PCA balance

Part R:
General collection rules

General withholding and payment obligations

RA 1 What this Part does RA 2 Amounts treated as income tax RA 3 Terminal tax obligations RA 4 Provisional tax obligations RA 5 Tax obligations for employment-related taxes RA 6 Withholding and payment obligations for passive income RA 6B Withholding and payment obligations for retirement scheme contributions RA 6C Withholding and payment obligations for residential land RA 7 Payment of tax by public authorities RA 8 Liability of persons receiving payments or benefits RA 9 Treatment of amounts withheld as received RA 10 When obligations not met RA 11 Adjustment to correct errors: certain underpayments RA 12 Adjustment to correct errors: certain excess amounts RA 13 Payment dates for terminal tax RA 14 Payment dates for provisional tax RA 15 Payment dates for interim and other tax payments RA 16 Payment date when taxable activity ends RA 17 Payment date when RWT-exempt status ends RA 18 Payment date for emigrating companies RA 19 Refunds of excess amounts or when amounts mistakenly paid RA 20 Amalgamation of companies RA 21 Regulations RA 22 Limits on application of other provisions for purposes of PAYE rules RA 23 Application of other provisions for purposes of ESCT rules and NRWT rules RA 24 Application of other provisions for purposes of RSCT rules

Terminal tax

RB 1 Payment of terminal tax RB 2 Income tax liability for non-filing taxpayers for non-resident passive income RB 3 Schedular income tax liability for filing taxpayers for non-resident passive income RB 4 Using refunds to satisfy tax liabilities

Provisional tax

RC 1 What this subpart does RC 2 Provisional tax rules and their application RC 3 Who is required to pay provisional tax? RC 4 Choosing to pay provisional tax RC 5 Methods for calculating provisional tax liability RC 6 Standard method RC 7 Estimation method RC 7B AIM method RC 8 GST ratio method RC 9 Provisional tax payable in instalments

Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 10 Calculating amount of instalment under standard and estimation methods RC 10B Calculating amount of instalment for periods using AIM method RC 11 Calculating amount of instalment using GST ratio RC 12 Voluntary payments RC 13 Paying 2 instalments for tax year RC 14 Paying 1 instalment for tax year RC 15 Choosing to use GST ratio RC 16 Who may use GST ratio? RC 17 When GST ratio must not be used RC 18 Changing calculation method RC 19 Disposal of assets RC 20 Calculating residual income tax in transitional years RC 21 Paying provisional tax in transitional years RC 22 Calculating instalments in transitional years: standard method RC 23 Calculating instalments in transitional years: estimation method RC 24 Calculating instalments in transitional years: GST ratio method RC 25 Consequences of change in balance date RC 26 Registering for GST or cancelling registration RC 27 Payment of provisional tax instalments when GST cycle changed RC 28 Provisional tax rules and consolidated groups RC 29 Residual income tax of consolidated groups RC 30 Consolidated groups using estimation method RC 31 Consolidated groups using GST ratio method RC 32 Wholly-owned groups of companies RC 33 Amalgamated companies: calculating residual income tax RC 34 Attribution rule for income from personal services RC 35 Further income tax credited to provisional tax liability RC 35B Treatment of overpaid provisional tax instalments calculated using AIM method RC 36 Persons affected by adverse events RC 37 Availability of early-payment discounts RC 38 Crediting income tax with early-payment discount RC 39 Credit treated as payment of income tax RC 40 Some definitions

Employment-related taxes

RD 1 What this subpart does

Introductory provisions

RD 2 PAYE rules and their application RD 3 PAYE income payments RD 3B Shareholders who are employees, for some companies: income other than PAYE RD 3C Shareholders who are employees, for some companies: PAYE and income other than PAYE RD 4 Payment of amounts of tax to Commissioner

Types of PAYE income payments

RD 5 Salary or wages RD 6 Certain benefits and payments RD 7 Extra pay RD 7B Treatment of employee share schemes RD 8 Schedular payments RD 8B Treatment of PAYE-related overpayments

Calculating amounts of tax

RD 9 Maximum amount RD 10 Amounts of tax for PAYE income payments RD 10B Amounts of tax for schedular payments RD 10C Calculating amounts of tax following changes to rates or thresholds RD 11 Amount of tax in certain circumstances

Adjustments for certain PAYE income payments

RD 12 Multiple payments of salary or wages RD 13 Advance payments RD 13B Adjustments for payroll donations RD 14 Changes to tax rates for salary or wages RD 15 Payments of salary or wages in pay periods RD 16 Payments to private domestic workers RD 17 Payment of extra pay with other PAYE income payments RD 18 Schedular payments without notification RD 19 Schedular payments to non-resident entertainers RD 20 Schedular payments to subcontractors RD 20B Payments of accident compensation for period of more than 1 year RD 20C Payments of recalculated main benefit

Paying amounts of tax

RD 21 When amounts of tax not withheld or payment insufficient RD 22 Providing employment income information to Commissioner RD 23 Bonds given by employers of certain non-resident employees RD 24 Exemptions for non-resident contractors

Introductory provisions

RD 25 FBT rules and their application RD 26 Liability for FBT

Value of fringe benefits

RD 27 Determining fringe benefit values RD 28 Private use of motor vehicle: calculation methods RD 29 Private use of motor vehicle: formulas RD 30 Private use of motor vehicle: 24-hour period RD 31 Motor vehicle test period RD 32 Replacement motor vehicles RD 33 Subsidised transport RD 34 Employment-related loans: value using prescribed interest rates RD 35 Employment-related loans: value using market interest rates RD 36 Repayment of employment-related loans RD 37 Contributions to superannuation schemes RD 38 Contributions to funds, trusts, and insurance premiums RD 39 Benefits provided by charitable organisations RD 40 Goods RD 41 Services RD 42 Goods at staff discount RD 43 Goods on special with staff discount RD 44 Goods disposed of by group companies RD 45 Unclassified benefits RD 46 Adjustments for unclassified benefits on amalgamation

Attributing fringe benefits to employees

RD 47 Attribution of certain fringe benefits RD 48 When attributed benefits provided to more than 1 employee RD 49 Application of thresholds to attributed benefits RD 50 Employer’s liability for attributed benefits RD 51 Calculation of all-inclusive pay RD 52 Calculation for certain employees when information lacking RD 53 Pooling non-attributed benefits

Taxable value of fringe benefits

RD 54 Value of and payments towards fringe benefits RD 55 Private use of motor vehicle: taxable value in cases of part ownership RD 56 Private use of motor vehicle: when schedular value not used RD 57 Private use of motor vehicle: when schedular value used

Options for payment of FBT

RD 58 Single rate option RD 59 Alternate rate option RD 60 Close company option RD 61 Small business option RD 62 Changes in payment periods RD 62B Obligations of cross-border employees when FBT liability not paid RD 63 When employer stops employing staff

Introductory provisions

RD 64 ESCT rules and their application RD 65 Employer's superannuation cash contributions RD 66 Complying fund rules

Calculating amounts of tax

RD 67 Calculating amounts of tax for employer’s superannuation cash contributions RD 67B Calculating amounts of tax following changes to rates or thresholds RD 68 Choosing to have amount treated as salary or wages RD 69 Choosing different rates for employer's superannuation cash contributions RD 70 Calculating amounts of tax on failure to withhold RD 71 Amounts of tax treated as paid to and received by superannuation funds RD 71B Obligations of cross-border employees when amounts of tax not paid RD 72 Recovery of tax paid by superannuation funds

Withholding tax on resident passive income (RWT)

RE 1 RWT rules and their application RE 2 Resident passive income RE 3 Obligation to withhold RWT RE 4 Persons who have withholding obligations RE 5 No withholding obligation in certain circumstances RE 6 When obligation to withhold unreasonable RE 7 When resident passive income paid to trustees RE 8 When resident passive income paid to nominees RE 9 Agents’ or trustees’ obligations in relation to certain dividends RE 10 Special rule relating to payments of interest RE 10B Amounts withheld from distributions to holders of FIF attributing interests RE 10C Obligations of custodial institutions in relation to certain payments of investment income RE 11 Notification by companies RE 12 Interest RE 13 Dividends other than non-cash dividends RE 14 Non-cash dividends other than certain share issues RE 14B Combined cash and non-cash dividends RE 14C Non-cash dividends distributed through intermediaries RE 15 Bonus issues in lieu and shares issued under profit distribution plans RE 16 Taxable Maori authority distributions RE 17 Replacement payments under share-lending arrangements RE 18 Payments made by RWT proxies RE 18B Capital value increase under inflation-indexed instruments: RWT cap RE 19 Choosing other rates RE 20 Paying RWT RE 21 Basis for payment of RWT RE 22 When payment treated as non-resident passive income RE 23 When amount of tax treated as FDP credit RE 24 When amount of tax treated as Maori authority credit RE 25 When amount of tax treated as imputation credit RE 26 Payment by proxy RE 27 RWT-exempt status RE 28 When RWT-exempt status ends RE 29 Establishing whether persons have RWT-exempt status RE 30 When unincorporated bodies have RWT-exempt status

Withholding tax on non-resident passive income (NRWT)

RF 1 NRWT rules and their application RF 2 Non-resident passive income RF 2B Non-resident financial arrangement income: outline and concepts RF 2C Meaning of non-resident financial arrangement income RF 3 Obligation to withhold amounts of tax for non-resident passive income RF 4 Non-resident passive income received by agents and others RF 5 When amounts of tax already withheld RF 6 When amounts of tax not withheld or partly withheld RF 7 General rate for NRWT RF 8 Certain dividends RF 9 When dividends fully imputed RF 10 Non-cash dividends RF 11 Dividends paid to companies associated with non-residents RF 11B Dividends paid by companies in certain situations RF 11BB Certain dividends paid to dual resident companies RF 11C Interest paid by non-resident companies to non-residents RF 12 Interest paid by approved issuers or transitional residents RF 12B Interest derived jointly with residents RF 12C Amount derived from non-resident life insurer becoming resident RF 12D Determining amount of non-resident financial arrangement income RF 12E When non-resident financial arrangement income treated as paid RF 12F Adjustments: first year additional amounts RF 12G Choosing to treat income as non-resident financial arrangement income RF 12H Meaning of related-party debt RF 12I Concepts used for definition of related-party debt RF 12J Treatment of certain payments made under indirect associated funding arrangements RF 13 Basis for payment of amounts of tax for non-resident passive income RF 14 Treatment of FDP credits RF 15 Commissioner’s power to vary amounts of tax RF 16 Relationship with RSCT rules

Payments for foreign dividends (FDP)

RG 1 FDP rules and their application RG 2 Foreign dividends RG 3 Obligation to pay FDP RG 4 Calculating amount of FDP RG 5 Credit balance in branch equivalent tax account RG 6 Using loss balances RG 7 Reduction of payments for conduit tax relief

Withholding tax on retirement scheme contributions

RH 1 RSCT rules and their application RH 2 Retirement scheme contributions RH 3 Retirement savings schemes RH 4 Retirement scheme contributors

Calculating amounts of tax

RH 5 Calculating amounts of tax for retirement scheme contribution RH 6 Calculating amounts of tax on failure to withhold

Residential land withholding tax

RL 1 Residential land withholding tax RL 2 Vendors: who must pay, and how? RL 3 Associated persons: who must pay, and how? RL 4 How much RLWT? RL 5 Paying RLWT RL 6 Commissioner repaying RLWT

Refunds

RM 1 What this subpart does RM 2 Refunds for overpaid tax RM 3 Refunds for overpaid FDP RM 4 Overpayment on amended assessment RM 5 Overpayment on income statements RM 6 Refunds after 4-year period ends RM 6B Refunds for overpaid AIM method instalments RM 7 Refunds to PAYE intermediaries RM 8 Overpaid RWT or NRWT RM 9 Calculations for attributed and non-attributed fringe benefits RM 10 Using refund to satisfy tax liability RM 11 Using GST refund to pay instalment of provisional tax RM 12 Reduction in provisional tax liability

ICA companies

RM 13 Limits on refunds for ICA companies RM 14 Limits on refunds when company stops being ICA company RM 15 Changes in credit balances RM 16 Treatment of amounts not refunded RM 17 Treatment of further income tax paid

Companies receiving foreign dividends

RM 18 Limits on refunds related to foreign dividends RM 19 Treatment of financial arrangements RM 20 Treatment of amounts not refunded RM 21 Refunds when loss balances used to reduce net income

Maori authorities

RM 22 Limits on refunds for Maori authorities RM 23 Limits on refunds when Maori authority stops being Maori authority RM 24 Increase in credit balances RM 25 Treatment of amounts not refunded RM 26 Treatment of further income tax paid RM 27 Application when no credits arise

Persons with policyholder credit accounts

RM 28 Limits on refunds for PCA persons RM 29 Limits on refunds when person no longer PCA person RM 30 Changes in credit balances RM 31 Treatment of amounts not refunded

Qualifying companies

RM 32 Application of sections RM 13 to RM 17 to qualifying companies

Certain unit trusts and group investment funds

RM 33 Limits on refunds for certain unit trusts and group investment funds

Intermediaries

RP 1 What this subpart does

Obligations and treatment of PAYE intermediaries

RP 2 PAYE intermediaries RP 3 Requirements for listed PAYE intermediaries RP 4 Payment of subsidies to certain PAYE intermediaries RP 5 Subsidy claims RP 6 Operation of PAYE intermediaries’ trust accounts

Employers’ responsibilities

RP 7 General responsibilities of employers RP 8 Information for PAYE intermediaries RP 9 Authorised transfers from accounts RP 10 When transfers from accounts not authorised RP 11 Employer's superannuation cash contributions RP 12 When payments made directly to employees

PAYE intermediaries’ responsibilities

RP 13 General responsibilities of PAYE intermediaries RP 14 Collection, payment, and information requirements RP 15 When employers have authorised transfers from accounts RP 16 Obligations for employer’s superannuation contributions RP 17 Tax pooling intermediaries RP 17B Tax pooling accounts and their use RP 18 Deposits in tax pooling accounts RP 19 Transfers from tax pooling accounts RP 19B Transfers for certain expected tax liabilities RP 20 Declining, amending, or reversing transfers RP 21 Refunds from tax pooling accounts

Terminating provisions

RZ 1 Certain elections to become person with provisional tax liability RZ 2 Amount of provisional tax based on 1997–98 or earlier tax year RZ 3 Standard method: 2010–11 to 2012–13 income years RZ 4 GST ratio method: 2010–11 to 2013–14 income years RZ 5 Calculating amounts under standard method: 2010–11 to 2012–13 income years RZ 5B Standard method: new personal tax rate persons from 1 October 2008 to end 2009–10 income year RZ 5C GST ratio method: new personal tax rate persons from 1 October 2008 to end 2009–10 income year RZ 5D Standard method or GST method: transition for Maori authorities RZ 6 Limits on refunds: transitional dates RZ 7 Withdrawal income RZ 8 Payment and rate of withdrawal tax RZ 9 Relief in certain cases RZ 10 Recovery of amounts payable to Commissioner RZ 11 Refunds for life insurers RZ 12 Adjustments to interest in requests made after commencement RZ 13 Treatment of prepayments RZ 14 Listed PAYE intermediaries: transitional provision RZ 15 Treatment of certain refunds made on income statements: 1 April 2008 to 31 March 2019 RZ 16 Treatment of certain refunds not paid within 4-year period: 1 April 2008 to 31 March 2013

Part Y:
Definitions and related matters

General definitions

YA 1 Definitions YA 2 Meaning of income tax varied YA 3 Treatment of qualifying company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax YA 4 General rules for giving information or communicating matters YA 5 General rule: capacity of trustees

Associated persons and nominees

Table Y1: Associated person rules

YB 1 What this subpart does YB 2 Two companies YB 3 Company and person other than company YB 4 Two relatives YB 5 Person and trustee for relative YB 6 Trustee and beneficiary YB 7 Two trustees with common settlor YB 8 Trustee and settlor YB 9 Settlor and beneficiary YB 10 Who is a settlor? YB 11 Trustee and person with power of appointment or removal YB 12 Partnership and partner YB 13 Look-through companies and owners of interests YB 14 Tripartite relationship YB 15 Exceptions for employee trusts YB 16 Exceptions for certain trusts and charitable organisations YB 17 Partnerships: partnership and associate of partner YB 18 Persons habitually acting together: 1988 version provisions YB 19 Person and controlled non-profit organisation: 1990 version provisions YB 20 Some definitions YB 21 Transparency of nominees

Measurement of company ownership

YC 1 Meaning of control YC 2 Voting interests YC 3 Market value interests YC 4 Look-through rule for corporate shareholders YC 5 Treatment of special corporate entities YC 5B Treatment of mixed-ownership enterprises YC 6 Disregarding certain securities YC 7 When sections YC 8 to YC 19B apply YC 8 Death of share or option holder YC 9 Shares or options held by trustees YC 10 Shareholders holding less than 10% direct interests YC 11 No look-through rule for companies in certain cases YC 12 Public unit trusts YC 13 Corporate spin-outs YC 14 Disregarding concessionary rules YC 15 Directors’ knowledge of failure to meet requirements of continuity provision YC 16 Disregarding market value changes YC 17 Demutualisation of insurers YC 18 Reverse takeovers YC 18B Corporate reorganisations not affecting economic ownership YC 18C Railways restructure not affecting Crown economic ownership YC 19 Legislative conversion of foreign company of proprietors YC 19B Treatment when certain trusts terminated YC 20 Credit account continuity provisions: excluded fixed rate securities

Residence and source in New Zealand

YD 1 Residence of natural persons YD 2 Residence of companies YD 3 Country of residence of foreign companies YD 3BA Country of residence of joint trustees YD 3B Crown YD 4 Classes of income treated as having New Zealand source YD 4B Meaning of permanent establishment YD 5 Apportionment of income derived partly in New Zealand YD 5B Attribution of income and expenditure to permanent establishment in New Zealand YD 6 Apportionment of income from sea transport YD 7 Apportionment of film rental income YD 8 Apportionment of premiums derived by non-resident general insurers YD 8B Apportionment of life insurance premiums derived by Lloyd’s of London YD 9 Residence of CTR company shareholders YD 10 Meaning of CTR holding company YD 11 Meaning of CTR group member

References to balance dates and years

YE 1 References to balance dates and years

Currency conversion

YF 1 General rules for currency conversion YF 2 Other rules for currency conversion: approved alternatives

Terminating provisions

YZ 1 Source rule for interest YZ 2 Saving of effect of section 394L(4A) of Income Tax Act 1976 YZ 3 Saving effect of section DF 5 of Income Tax Act 1994 YZ 4 Saving of effect of certain terms defined in Canterbury Earthquake Recovery Act 2011 YZ 5 New Zealand Memorial Museum Trust — Le Quesnoy: sunset

Part Z:
Repeals, amendments, and savings

ZA 1 Repeals ZA 2 Consequential amendments to other enactments ZA 3 Transitional provisions ZA 4 Saving of binding rulings ZA 5 Saving of accrual determinations ZA 6 Comparative tables of old and new provisions