227CTransitional provision: voluntary application of employment income information provisions

1. This section applies for the purposes of this Act and the Income Tax Act 2007, when an employer or PAYE intermediary, other than an employer who provides their employment income information by non-electronic means, is required to provide an employer monthly schedule and a PAYE income payment form in the period that starts on 1 April 2018 and ends on 31 March 2019 (the transitional period).

2. Despite the commencement provisions in the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (the amendment Act) relating to the provision of employment income information, the application of new thresholds, and the consequential amendments to the KiwiSaver Act 2006, the employer may choose to apply the provisions in the amendment Act for the transitional period, or a part of it, in place of the provisions in this Act and the Income Tax Act 2007 for the delivery of the employer monthly schedule and PAYE income payment form.

3. For the purposes of subsection (2), an employer who chooses to report their employment income information using the provisions of the amendment Act must also apply the other relevant provisions relating to the delivery of that information or to the interpretation of those provisions, whether or not the relevant provision is listed in subsection (8).

4. When an employer makes an election under subsection (2), they must include in their employment income information the required items relating to a benefit received by an employee or former employee under section CE 1(1)(d) of the Income Tax Act 2007, applying the provisions of the amendment Act in relation to all benefits under employee share schemes, as defined in the amendment Act, received by employees or former employees on or after the date that is 20 days before the date of their election.

5. For the purposes of subsection (4), for an item relating to a benefit under an employee share scheme received by an employee in the part of the transitional period that falls before the date referred to in section 2(34) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018, the ESS deferral date referred to in section CE 2(9) of the Income Tax Act 2007 is the 20th day after the employee receives the benefit.

6. For the purposes of the application of a late filing penalty under section 139A(6) to (8), the rules relating to further failures apply for the transitional period as if it were a continuation of the previous period or periods.

7. For the purposes of the correction of errors in employment income information that is provided in the transitional period, a regulation-making power is set out in section 46(8) and (9).

8. For the purposes of subsections (2) and (4), and despite the relevant commencement provisions in section 2,—

9. sections 17(2) and (3)(b), 20, 153, 158, 159, 191, 196, 203, 207 to 209, 239, 240, 243(20), (24), (26), (53), and (54), 261(2), (5), (13), and (26), 267, 272, 274 to 276, 279, 280, 303, 313, 315, 334, 352 to 357, 360, 363 to 367, 372(1)(a) to (c), 374 to 380, 383 to 388, and 406 of the amendment Act are treated as having a commencement date of 1 April 2018 and as applying for, or in relation to, an employer from the date on which they choose to apply the relevant provisions:
10. the due dates for employment income information under sections 23E to 23I do not apply in the transitional period for the purposes of determining a penalty under section 139A(6) to (8) or 142.

11. An employer who makes an election under subsection (2) may not revert to the provisions for the delivery of the employer monthly schedule and PAYE income payment form under this Act or the Income Tax Act 2007, and must continue to apply the provisions of the amendment Act for the remainder of the transitional period unless the employer and Commissioner agree otherwise. As a consequence, the early commencement and application dates set out in subsection (8) no longer apply.