Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 [2006 No 3]
The Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Bill was introduced into Parliament on 19 May 2005. The bill received its first reading on 9 June 2005, the second reading on 16 March 2006 and the third reading on 22 March 2006. The resulting Act received Royal assent on 3 April 2006. It amends the Income Tax Act 1994, Income Tax Act 2004, Tax Administration Act 1994 and the Goods and Services Tax Act 1985.
Temporary exemption from tax on foreign income for new migrants and certain returning New Zealanders
New rules have been introduced to help remove the tax barriers inhibiting international recruitment to New Zealand.
Clarification of treaty override power
The purpose of the amendment is to clarify which enactments are overridden by Orders in Council made pursuant to section BH 1.
Rewrite amendments
Remedial changes have been made to the Income Tax Act 2004 on the recommendation of the Rewrite Advisory Panel.
Reimbursement for the use of a private motor vehicle
In accordance with section CW 13 of the Income Tax Act 2004, employers may determine the amount of employee reimbursement exempt for tax purposes when employees use their own vehicles for work purposes.
Organisation approved for charitable donee status
Habitat for Humanity New Zealand Limited has been granted charitable donee status from the 2005-06 tax year.
Resident withholding tax on dividends paid by non-resident companies
An amendment ensures that trans-Tasman imputation credits are taken into account in calculating resident withholding tax (RWT) deductions from dividends paid by non-resident companies.
Amendments to disputes rules
A number of minor remedial amendments have been made to the Tax Administration Act 1994 (TAA). The amendments clarify and correct changes to the disputes resolution rule amendments in the Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 (the amending Act).
Miscellaneous technical amendments
Section EZ 29 has been replaced to extend the exemption for investments in listed controlled foreign companies (CFCs) up to and including the 2010-11 tax year.
GST on goods outside New Zealand at the time of supply
Section 11(1)(j) of the Goods and Services Tax Act has been amended and confirms that goods, such as motor vehicles, that are contracted for and used in New Zealand but located outside New Zealand at the time of supply are charged at the standard rate of GST.
GST and distributions from a trust made for no consideration between associated registered persons
Section 10 of the Goods and Services Tax Act has been clarified for valuing distributions from a trust and for valuing a gift between associated registered persons.
GST and international postage stamps
Section 5(11I) of the Goods and Services Tax Act has been amended by inserting a definition of "postage stamp".
GST and credit contracts legislation
Changes have been made to sections 3 and 10 of the Goods and Services Tax Act to clarify the definition of "credit contracts" in relation to the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
Bloodstock write-down rates
Write-down rates have been increased for stallions not previously used for breeding in New Zealand and for broodmares.
Duty on racing
The rate of duty and the formula for calculating duty on racing have been aligned with the rate and formula for casino gambling duty.
GST on goods and services supplied to security holders
Changes have been made to the Goods and Services Tax Act to clarify the application of GST to supplies of financial services following the Court of Appeal decision Commissioner of Inland Revenue v Gulf Harbour Developments Ltd.
Trans-Tasman imputation credit-streaming
The amendments close a loophole by preventing Australasian groups of companies from allocating imputation credits to dividends paid to a New Zealand investor if the payment of the dividends results in a tax deduction in Australia.
Regrassing and fertilising expenditure
The treatment of regrassing and fertilising expenditure has been realigned to clarify when it is fully deductible and when it is to be treated on capital account.
The addition of Spain to the grey list
The grey list is a list of countries whose tax systems are broadly similar to that of New Zealand's.
Unacceptable tax position
The amendments give the Commissioner a discretion to either cancel or not assess the unacceptable tax position shortfall penalty in certain circumstances.
Reverse takeovers and continuity rules
The concessionary continuity rules, which apply to carrying forward losses and imputation credits when there is a change in a company's shareholding, have been extended to recognise that continuity can be maintained through reverse takeovers or mergers.
Increase in the child tax rebate
The maximum child rebate payable has increased from $156 to $351 a year.
Income tax exemption for gaming machine income of gaming trusts
The Income Tax 2004 has been amended to provide an exemption from income tax for the gaming machine income of gaming trusts.
Tax consequences of natural disasters
Several amendments address problems which arose from the floods in February and July 2004.
Taxation of foreign hybrids and foreign tax credit rules
The law has been clarified to allow people who invest in "foreign hybrids" to receive "grey list" treatment and foreign tax credits for tax they pay overseas on income earned by a foreign hybrid.
Exemption for rights to benefit from employment-related foreign superannuation schemes
Amendments have been made to the foreign investment fund (FIF) exemption for rights to benefit from employment-related foreign superannuation schemes.
New disclosure and recordkeeping rules for foreign trusts
New disclosure and record-keeping rules have been introduced for foreign trusts.
Treatment of distributions from cooperatives
Cooperatives can deduct distributions of profits arising from transactions with their members under the mutuality provisions contained in section HF 1 of the Income Tax Act 2004.
ACC attendant care payments
Changes have been made to the Income Tax Act 2004 and the Tax Administration Act 1994 to withhold tax on ACC attendant care payments made by the Accident Compensation Corporation (ACC).
Venture capital investment alongside the Venture Investment Fund
The VIF is a Crown-owned company which promotes the development of the New Zealand venture capital industry and invests alongside private-sector co-investors in early stage New Zealand companies.
Corporate migration
The Income Tax Act 2004 has been amended to ensure that companies that migrate from New Zealand pay tax on the worldwide income they earned while resident in New Zealand.
Allocation of research and development tax deductions
The Income Tax Act 2004 has been amended to allow companies that bring in new equity investors better access to tax deductions for research and development (R&D) expenditure.
Taxation of share-lending transactions
The tax treatment of share-lending transactions has been clarified and reformed.
Fringe benefit tax
Amendments to the Income Tax Act 2004 give effect to a set of changes to fringe benefit tax (FBT).
Depreciation rates
The Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 amends the previous tax depreciation rules.
Aligning provisional tax payments with GST
The provisional tax rules have been amended to make paying provisional tax easier for small businesses.
PAYE subsidy for small businesses
Changes ahve been made to the Income Tax Act 2004 and the Tax Administration Act 1994 to enable Inland Revenue to subsidise the use of payroll agents to meet the PAYE obligations of small businesses.
Date published: 05 Oct 2004
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