Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009

New rules for taxing controlled foreign companies and foreign dividends

The Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 introduces new rules for the taxation of foreign companies controlled by New Zealand residents and for foreign dividends received by New Zealand companies.

Taxation of life insurance business

Significant changes have been made to the taxation of life insurance business. The changes update the rules to ensure that term insurance business is taxed on actual profits, as other businesses are taxed, and extend the tax benefits of the PIE rules to people who save through life products.

Tax treatment of payments for relocation, overtime meals and certain other allowances

Amendments have been made to the Income Tax Acts 1994, 2004 and 2007 and the Tax Administration Act 1994 to specifically ensure that payments by employers when relocating their employees, and providing them with overtime meal allowances and certain other allowances, are exempt from income tax and fringe benefit tax when certain criteria are met.

Payroll giving - a new tax credit

The new voluntary payroll-giving scheme will be available on 7 January 2010. The scheme provides a tax credit for gifts of money that are deducted from an employee’s pay through his or her employer’s payroll.

New definitions of "associated persons"

The definitions of “associated persons” in the Income Tax Act 2007 have been reformed by strengthening and rationalising them. The definitions are mainly used in an anti-avoidance capacity to counter non-arm’s length transactions that could undermine the intent of the income tax legislation.

Date published: 14 Jul 2010

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