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Technical tax area: Interpretation guidelines and interpretation statements
Interpretation guidelines discuss the Commissioner's approach to the interpretation of a general area of law where there are also taxation implications. For example, IG009: Employee or independent contractor? assists taxpayers to determine their employment status for tax purposes.
- Interpretation statements set out the Commissioner's view of the taxation laws in relation to a particular set of circumstances in cases when a binding public ruling cannot be issued or is considered to be inappropriate.
The table below lists interpretation guidelines and interpretation statements issued in 2015, other interpretations are sorted by the year in which they were issued.
IS 16/03 - Tax residence
This Interpretation Statement updates and replaces IS 14/01 – Tax Residence (Tax Information Bulletin Vol 26, No 3, April 2014), as a result of the Court of Appeal decision in CIR v Diamond  NZCA 613. It sets out the Commissioner’s view on the tax residence rules for individuals, companies and trusts. The updated part deals with one of the tax residence tests for individuals – the “permanent place of abode” test in s YD 1(2). The tax residence rules determine whether a person is liable for tax on worldwide income or only on New Zealand-sourced income. New Zealand residents are assessable on worldwide income, and non-residents are assessable only on New Zealand-sourced income.
If you have reached a view on your tax residence under the approach in IS 14/01 and are unsure how IS 16/03 might affect you, the Commissioner's operational position will help (see Operational positions in the left hand menu).
Date of issue: 20 September 2016
IS 16/03 - PDF format (1.2mb | 84 pages)
IS 16/02 - Income tax - Unit trusts - Commissioner's operational position
This operational position relates to the recently published interpretation statement IS 16/02, which sets out the Commissioner’s position on whether and when a unit trust can have a single unit holder for income tax purposes. The Commissioner’s view in the interpretation statement differs in some respects from the commentary to BR Pub 95/5A “Relationship between the “unit trust” and “qualifying trust” definitions” (Tax Information Bulletin Vol 8, No 10 (December 1996). This operational position sets out the transitional operational approach that the Commissioner will apply to taxpayers affected by the change in view.
Date of issue: 29 July 2016
IS 16/02 - PDF format (76kb | 1 page)
IS 16/02 - Income tax - Unit trusts - when a trust can have a single unit holder
This interpretation statement sets out the Commissioner's position on whether and when a unit trust can have a single unit holder for income tax purposes.
Date of issue: 29 July 2016
IS 16/02 - PDF format (335kb | 21 pages)
IS 16/01 - Income tax - computer software acquired for use in a taxpayer’s business
This item covers the income tax treatment for taxpayers who purchase, lease, licence, subscribe for, develop, or commission computer software for use in their business. It updates and replaces the 1993 Policy Statement on computer software published in an Appendix to Tax Information Bulletin Vol 4, No 10 (May 1993) - except for the parts that deal with taxpayers carrying on a software development business which will be dealt with separately.
The item contains reference to the interpretation statement IS 08/02: “Deductibility of Feasibility Expenditure” (Tax Information Bulletin Vol 20, No. 6 (July 2008)). Comments in the recent Court of Appeal decision CIR v Trustpower Ltd  NZCA 253 have questioned some aspects of that statement. This item reflects that until that litigation is finally resolved, the Commissioner will continue to apply the position set out in the IS 08/02.
Date of issue: 26 May 2016
IS 16/01 - PDF format (390kb | 30 pages)
IG 16/01 - Determining employment status for tax purposes (employee or independent contractor?)
This Interpretation Guideline will help taxpayers determine their employment status for tax purposes. It updates and replaces Interpretation Guideline IG 11/01, “Income tax: Goods and services tax – Determining employment status for tax purposes (employee or independent contractor?)”, Tax Information Bulletin Vol 24, No 5 (June 2012): 3. The summary to IG 11/01 incorrectly stated the control test (although the test was stated correctly elsewhere in the item). This Interpretation Guideline corrects this error. It also updates legislative references and case law and has been revised in places for clarity. The Commissioner’s approach to determining employment status for tax purposes remains unchanged.
Date of issue: 8 March 2016
IG 16/01 - PDF format (436kb | 26 pages)