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Income Tax Act 2007

Timing and quantifying rules - Terminating provisions - Definitions

EZ 52C: Change of spreading method: Determination G22 to Determination G22A

You could also call this:

“Changing tax calculation method for optional convertible notes”

This law is about changing how you calculate taxes for certain financial arrangements called optional convertible notes. These are special types of investments that can be changed into something else.

There are two ways to calculate taxes for these notes, called Determination G22 and Determination G22A. This law explains what happens when you switch from using G22 to G22A.

If you’ve been using G22 for your financial arrangement, and now you need to start using G22A, you don’t have to make any special adjustments to your tax calculations when you switch.

In the year when you change from G22 to G22A, you’ll use G22 for part of the year and G22A for the rest of the year.

This law doesn’t change anything about how G22 was used before. If you had any disagreements with the tax department about G22, those aren’t affected by this new rule.

Remember, this only applies if you couldn’t use G22A before because of certain rules, and now those rules don’t apply anymore.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3282600.

Topics:
Money and consumer rights > Taxes
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EZ 52B: Consistency of use of IFRS method: Determination G3 change allowed, or

“Changes allowed to tax calculation method for financial agreements in certain situations”

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EZ 52D: Base price adjustment: financial arrangements to which Determination G22 and Determination G22A applied, or

“How to adjust prices for specific financial arrangements under new rules”

Part E Timing and quantifying rules
Terminating provisions: Definitions

EZ 52CChange of spreading method: Determination G22 to Determination G22A

  1. This section does not alter or affect a person's tax position in relation to Determination G22: Optional convertible notes denominated in New Zealand dollars convertible at the option of the holder or the person's litigation of their tax position in relation to Determination G22. It does not alter or affect the Commissioner's assessment of, or litigation of, that tax position. It applies after Determination G22 has applied for a person's financial arrangement, and only if, for the financial arrangement,—

  2. Determination G22A: Optional convertible notes denominated in New Zealand dollars did not apply while Determination G22 applied, because of the application of section 90AE of the Tax Administration Act 1994, or the application of Determination G22A, clause 3(1)(b); and
    1. Determination G22A starts applying immediately after—
      1. section 90AE of the Tax Administration Act 1994 stops applying; or
        1. Determination G22A, clause 3(1)(b) stops applying.

        2. Despite sections EW 26 and EW 27 (which relate to changes of spreading method), the person must not calculate a spreading method adjustment under section EW 27 for the change of spreading method, for the financial arrangement, from Determination G22 to Determination G22A.

        3. In the income year in which subsection (2) applies, for the financial arrangement, Determination G22 applies for the part-year before the change to Determination G22A, and Determination G22A applies for the part-year after the change from Determination G22.

        Notes
        • Section EZ 52C: inserted, on , by section 51 of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
        • Section EZ 52C list of defined terms tax position: inserted, on , by section 243 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).