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Technical tax area
Ngā tūmomo whakataunga me ngā aratohu

General issues

These items clarify a range of general issues.


QB 18/13: Income tax – what is the tax treatment of allowances paid and benefits provided to farm workers?

This Question We’ve Been Asked (QWBA) considers the income tax treatment of allowances or benefits paid or provided to employees in a farming context. It addresses a range of allowances sometimes paid in a farming context and sets out the Commissioner’s view on the extent to which they can be paid as exempt from tax. The QWBA withdraws and replaces several items previously published in Public Information Bulletins.

Date of issue: 13 June 2018

QB18/13 - PDF format (393kb | 10 pages)

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QB 18/12: Are war pensions paid under the Dutch ABVP Scheme exempt from income?

This Question We’ve Been Asked confirms PIB 168-17 “War pensions – Section 61(10) Income Tax Act 1976”, which stated that pensions under the Dutch (Benefit Act for Victims of Persecution 1940-1945) are tax exempt.

Date of issue: 13 June 2018

QB18/12 - PDF format (146kb | 1 pages)

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QB 18/09: Income tax - can sharemilkers and contract milkers deduct farmhouse expenditure using the approach in IS 17/02?

The Commissioner’s view on the appropriate treatment of farmhouse expenses in different circumstances is set out in interpretation statement "IS 17/02: Income tax - deductibility of farmhouse expenses". This Question We’ve Been Asked (QWBA) clarifies that sharemilkers and contract milkers (subject to meeting the requirements of the QWBA) can use the approach in the interpretation statement to claim a 20% deduction for farmhouse expenditure without the need to calculate actual business use.

Date of issue: 24 May 2018

QB18/09 - PDF format (293kb | 6 pages)

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QB 18/08: Binding rulings - Effect of the Commissioner changing her mind in relation to the application of s BG 1

This item considers the situation where a binding private or product ruling has been issued for an ongoing arrangement, and the Commissioner’s view of how the general anti-avoidance provision applies to the arrangement subsequently changes. The item concludes that the Commissioner can apply the anti-avoidance provision to any period following the expiry of the ruling.

Date of issue: 13 April 2018

QB18/08 - PDF format (206kb | 6 pages)

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QB 18/07: When is an arrangement considered to be “materially different” from the arrangement identified in a private or product ruling?

This item considers when an arrangement (the revised arrangement) will be “materially different” from the arrangement identified in a private or product ruling for the purpose of ss 91EB(2)(a) and 91FB(2)(a) of the Tax Administration Act 1994. It concludes that the revised arrangement is “materially different” for the purpose of ss 91EB(2)(a) and 91FB(2)(a) if, in relation to a tax type, the difference between the revised arrangement and the arrangement identified in the ruling is capable of affecting the tax outcome referred to in the ruling. Whether the revised arrangement is materially different from the arrangement identified in the ruling will be considered on a case-by-case basis, because it will turn on the facts and circumstances of each case.

Date of issue: 29 March 2018

QB18/07 - PDF format (244kb | 6 pages)

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QB 18/06: Can a registered person issue a combined tax invoice and credit or debit note?

This item confirms you can combine tax invoices, credit notes, and debit notes in a single document as long as they each relate to the different supplies. The item provides a brief summary of when credit notes and debit notes must be issued, together with some examples and accompanying sample documents.

Date of issue: 23 February 2018

QB18/06 - PDF format (594kb | 6 pages)

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QB 18/05: Income tax - insurance - personal sickness and accident insurance taken out by employer for the benefit of an employee

This item considers the income tax treatment of a personal sickness or accident insurance policy that is taken out by an employer for the benefit of an employee. It concludes that the amount of the premiums is generally deductible to the employer. Unless the premium paid is for income protection insurance, the premiums paid will be subject to FBT. It also sets out when an amount paid out under the policy will be taxable income of the employee.

Date of issue: 23 February 2018

QB18/05 - PDF format (311kb | 7 pages)

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QB 18/04: Income tax - insurance - personal sickness and accident insurance taken out by employee with employer paying the premiums on employee’s behalf

QB 18/04 looks at the income tax treatment of a personal sickness or accident insurance policy taken out by an employee where the premiums are paid by the employer.

Date of issue: 23 February 2018

QB18/04 - PDF format (307kb | 6 pages)

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QB 18/03: Income tax - insurance - term life insurance policy taken out by employer for the benefit of an employee

This item considers the income tax treatment of a term life insurance policy taken out by an employer for the benefit of an employee (or their spouse, civil union partner, de facto partner, or child). It concludes that the amount of the premiums is deductible to the employer and subject to FBT. Lump sums paid out under the policy will not be taxable income of the employee (or the employee’s estate).

Date of issue: 23 February 2018

QB18/03 - PDF format (204kb | 4 pages)

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QB 18/02: Income tax - insurance - term life insurance policy taken out by employee with employer paying the premiums on employee’s behalf

This item considers the income tax treatment of a term life insurance policy taken out by an employee for their own benefit where the premiums are paid by the employer. It concludes that the amount of the premiums is deductible to the employer and subject to PAYE for the employee. Lump sums paid out under the policy will not be taxable income of the employee (or the employee’s estate).

Date of issue: 23 February 2018

QB18/02 - PDF format (200kb | 3 pages)

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QB 18/01: Can a fit-out of an existing building be "improvements" for the purposes of s CB 11?

QB 18/01 sets out the CIR's view that a fit-out of an existing building may constitute improvements for the purposes of s CB 11 and sale proceeds may be taxable.

Date of issue: 31 January 2018

QB18/01 - PDF format (247kb | 5 pages)

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QB 17/10: Income tax and fringe benefit tax - insurance - group insurance policy taken out by employer for the benefit of an employee

QB 17/10 considers the income tax and FBT treatment of group insurance policies taken out by an employer who holds the policy on behalf of its employees.

Date of issue: 20 December 2017

QB17/10 - PDF format (233kb | 6 pages)

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QB 17/09: Is there a full or partial disposal when an asset is contributed to a partnership as a capital contribution?

This item is about whether there is a full or partial disposal of an asset where a person contributes an asset to a general or limited partnership as a capital contribution. The Commissioner’s position is that there is a full disposal. The Commissioner has published a transitional operational position for taxpayers who have applied a partial disposal approach prior to the issue of this item. You can find information on this transitional position from the Operational positions link on the left menu.

Date of issue: 29 November 2017

QB17/09 - PDF format (315kb | 12 pages)

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QB 17/08: Are proceeds from the sale of gold bullion income?

This Question We’ve Been Asked considers whether proceeds from the sale of gold bullion will give rise to income under s CB 4. It concludes that in most cases gold purchased in bullion form will be purchased for the dominant purpose of disposal, so the amount derived on its disposal will be income under s CB 4. However, there may sometimes be situations where the Commissioner may accept that the dominant purpose in acquiring gold bullion was to retain it for reasons other than eventual disposal. If a taxpayer asserts that they did not acquire gold bullion for the dominant purpose of disposal, the onus is on them to satisfactorily show that.

Date of issue: 20 September 2017

QB17/08 - PDF format (526kb | 10 pages)

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QB 17/07: Resident and non-resident withholding taxes: Non-cash dividends

QB 17/07 considers whether the income of a person who receives a non cash dividend includes any resident or non-resident withholding tax paid for the dividend.

Date of issue: 22 June 2017

QB17/07 - PDF format (153kb | 7 pages)

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QB 17/06: Income tax: Insurance – key-person insurance policies

QB 17/06 explains the income tax treatment of key-person insurance policies for replacing lost profits resulting from the death or disablement of a key employee.

Date of issue: 21 June 2017

QB17/06 - PDF format (157kb | 6 pages)

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QB 17/05: Income tax - whether YouTube receipts are taxable

QB 17/05 considers whether YouTube receipts are subject to income tax, and concludes that in many cases they are taxable.

Date of issue: 26 May 2017

QB17/05 - PDF format (120kb | 5 pages)

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QB 17/03: Tax Administration Act 1994 – the period for which a private or product ruling applies

QB 17/03 sets out the period for which private or product rulings generally apply under the CIR's current practice.

Date of issue: 21 April 2017

QB 17/03 - PDF format (110kb | 4 pages)

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QB 17/02: Income tax - date of acquisition of land, and start date for 2-year bright-line test

This Question We’ve Been Asked deals with the issue of when land is acquired under s CB 15B. It concludes that what is relevant is when the first interest in the land (ie, the particular estate) that is being disposed of was acquired. In a typical land purchase this will be when a binding contract to purchase the land is formed (even if some conditions still need to be met). The item also looks at when the 2-year period for the bright-line test starts, which is generally not the same date as the date land is acquired under s CB 15B. Since the item was consulted on, the Commissioner has reached a different view on the application of the bright-line test to nomination situations from that in the draft item. As a result of submissions received and further consideration of the issue, the item concludes that in a nomination situation the bright-line test will not apply because there is no disposal by the nominator.

Date of issue: 30 March 2017

QB 17/02 - PDF format (318kb | 24 pages)

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QB 17/01: Depreciation treatment for 'Buildings with prefabricated stressed-skin insulation panels'

QB 17/01 sets out 'Buildings with prefabricated stressed-skin insulation panels' in the Buildings and Structures asset category of the Table of Depreciation Rates.

Date of issue: 30 March 2017

QB 17/01 - PDF format (283kb | 4 pages)

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QB 16/08: Income tax – deductibility of the costs of obtaining a detailed seismic assessment of a building

This item considers whether expenditure incurred in obtaining a detailed seismic assessment (DSA) of a building is deductible. The Commissioner concludes that DSA costs are revenue and therefore deductible in most of the situations considered. The exception is where DSA costs are incurred as part of a capital project. In this case they are capital and non-deductible.

Date of issue: 19 December 2016

QB 16/08 - PDF format (169kb | 8 pages)

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QB 16/07: Income tax – land sale rules – main home and residential exclusions – regular pattern of acquiring and disposing, or building and disposing

QB 16/07 considers when land sellers/renovators have a 'regular pattern' of transactions that prevent them using exclusions in the land sale rules.

Date of issue: 31 August 2016

QB 16/07 - PDF format (772kb | 18 pages)

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QB 16/06: Income tax - land acquired for a purpose or with an intention of disposal

QB 16/06 examines when proceeds from the disposal of land acquired with a purpose or intention of disposal are taxable. Also discusses the 2 year 'bright-line' rule.

Date of issue: 28 July 2016

QB 16/06 - PDF format (199kb | 12 pages)

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QB 16/05: Income tax - donee organisations and gifts

This provides guidance on when payments are gifts for income tax purposes for both donee organisations when issuing donation receipts and for their supporters when claiming donation tax credits.

Date of issue: 23 June 2016

QB 16/05 - PDF format (187kb | 12 pages)

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QB 16/01: Income tax - Working for Families Tax Credits - principal caregiver -dependent child - primary responsibility for day-to-day care - meaning of "temporary basis"

QB 16/01 considers whether a person looking after a child on a temporary basis can become eligible to receive Working for Families Tax Credits.

Date of issue: 18 February 2016

QB 16/01 - PDF format (983kb | 10 pages)

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QB 15/15: Income tax - first aid allowances

QB 15/15 considers whether allowances paid by employers to employees who are designated first aiders are taxable, and whether reimbursements are exempt income.

QB 15/15 - PDF format (97kb | 3 pages)

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QB 15/13: Income tax - whether the cost of acquiring an option to acquire revenue account land is deductible

QB 15/13 considers the deductibility of the cost of an option to acquire revenue account land applying the financial arrangement rules and s DB 23.

QB 15/13 - PDF format (284kb | 13 pages)

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QB 15/12: Depreciation treatment for "Buildings with prefabricated stressed-skin insulation panels"

QB 15/12 considers the depreciation treatment for buildings with prefabricated stressed-skin insulation panels. Replaced in 2017 by QB 17/01.

QB 15/12 - PDF format (202kb | 3 pages)

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QB 15/11: Income tax - scenarios on tax avoidance - 2015

This item is about the application of the general anti-avoidance provision of section BG 1 to three scenarios discussed at a tax conference in 2014. They concern the use of a limited partnership as part of the restructuring of a business, borrowing to invest in a portfolio investment entity (PIE), and where trustees of a discretionary trust take into account the tax position of the beneficiaries when making decisions about distributions of beneficiary income. This item concludes that section BG1 would apply in the PIE scenario and not in the others.

QB 15/11 - PDF format (271kb | 18 pages)

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QB 15/10: Income tax - insurance - personal sickness and accident insurance taken out by employer for the benefit of an employee

QB 15/10 considers the income tax treatment of a personal sickness or accident insurance policy taken out by an employer for the benefit of an employee.

QB 15/10 - PDF format (201kb | 6 pages)

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QB 15/09: Income tax - insurance - personal sickness and accident insurance taken out by employee with employer paying the premiums on employee's behalf

QB 15/09 considers the income tax treatment of a personal sickness or accident insurance policy taken out by an employee where the premiums are paid by the employer.

QB 15/09 - PDF format (105kb | 6 pages)

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QB 15/08: Income tax - tax treatment of allowances paid to chainsaw operators

QB 15/08 considers whether a chainsaw reimbursing allowance can be paid tax-free.

QB 15/08 - PDF format (56kb | 5 pages)

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QB 15/07: Tax Administration Act 1994 - meaning of "due and payable" under section 91E(4)(d)(i)

This Question We've Been Asked considers when a tax, duty or levy will be "due and payable" under s 91E(4)(d)(i) of the Tax Administration Act 1994. The Commissioner may not make a private ruling if the matter a private ruling is sought on concerns a tax, levy or duty that is "due and payable". This will occur on the due date for payment of that tax type and tax period (regardless of whether an amount of tax is actually payable).

QB 15/07 - PDF format (93kb | 4 pages)

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QB 15/06: Income tax - insurance - term life insurance policy taken out by employer for the benefit of an employee

This item considers the income tax treatment of a term life insurance policy taken out by an employer for the benefit of an employee (or their spouse, civil union partner, de facto partner, or child).  It concludes that the amount of the premiums is deductible to the employer and subject to FBT.  Lump sums paid out under the policy will not be taxable income of the employee (or the employee's estate).

QB 15/06 - PDF format (53kb | 5 pages)

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QB 15/05: Income tax - insurance - term life insurance policy taken out by employee with employer paying the premiums on employee’s behalf

This item considers the income tax treatment of a term life insurance policy taken out by an employee for their own benefit where the premiums are paid by the employer.  It concludes that the amount of the premiums is deductible to the employer and subject to PAYE for the employee.  Lump sums paid out under the policy will not be taxable income of the employee (or the employee’s estate).

QB 15/05 - PDF format (34kb | 3 pages)

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QB 15/02: Income tax - major development or division - what is "significant expenditure" for section CB 13 purposes?

This Question We've Been Asked deals with what expenditure is relevant for s CB 13 purposes, and when such expenditure will be regarded as "significant". The Commissioner has published an operational position on what is "significant expenditure" for section CB 13 purposes in relation to this QWBA. You can find this information from the Operational positions link on the left menu.

QB 15/02 - PDF format (203kb | 13 pages)

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QB 15/04: Income tax - Whether it is possible that the disposal of land that is part of an undertaking or scheme involving development or division will not give rise to income, even if no exclusion applies

This item considers whether it is possible that the disposal of land that is part of an undertaking or scheme involving development or division will not give rise to income under s CB 12 or s CB 13, even if none of the statutory exclusions apply.  The item concludes that if an undertaking or scheme involving development or division has been carried on (and meets the other criteria in s CB 12 or s CB 13) the proceeds on disposal of all of the land will be taxable under the relevant provision unless an exclusion applies.  However, the Commissioner will accept that s CB 12 or s CB 13 does not apply to the disposal of any given part of the land if the taxpayer can provide satisfactory evidence that the undertaking or scheme was not carried on with a view to the disposal of that land.

QB 15/04 - PDF format (266kb | 21 pages)

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QB 15/03: Income tax - changing to a different depreciation rate for an item of depreciable property

This Question We've Been Asked (QWBA) considers the circumstances in which a taxpayer is required to change the depreciation rate they are using for an item of depreciable property.  The QWBA explains those circumstances and provides examples showing how these circumstances might arise in practice.  The QWBA does not address the issue of how to identify an item of depreciable property.

QB 15/03 - PDF format (187kb | 10 pages)

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QB 15/01: Income tax - tax avoidance and debt capitalisation

QB 15/01 considers a debt capitalisation scenario, and whether the general anti-avoidance provision in section BG 1 applies.

QB 15/01 - PDF format (157kb | 8 pages)

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QB 14/12 : Income tax - foreign tax credits for amounts withheld from United Kingdom pensions

QB 14/12: Income tax - foreign tax credits for amounts withheld from United Kingdom pensions (Question We've Been Asked, 2014).

QB 14/12 - PDF format (189kb | 13 pages)

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QB 14/11: Income tax - scenarios on tax avoidance

QB 14/11 considers scenarios on tax avoidance relating to interest deductions, look-through companies and substituting debentures.

QB 14/11 - PDF format (224kb | 12 pages)

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QB 14/09: Income tax - Meaning of "excessive remuneration" and "excessive profits or losses" paid or allocated to relatives, partners, shareholders or directors

This item considers the meaning of excessive remuneration and excessive profits or losses when they are paid or allocated to relatives, partners, shareholders or directors.  This item arose out of the recent PIB/TIB review and updates and replaces a number of previous items that were out of date. 

QB 14/09 - PDF format (190kb | 13 pages)

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QB 14/08 Income Tax - Costs of demolishing an existing building on a building site

QB 14/08 explains that the costs of demolishing an existing building are not part of the cost of a new building, and are not deductible for income tax purposes.

QB 14/08 - PDF format (181kb | 4 pages)

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QB 14/07 Tax Administration Act 1994 - Proscribed Questions

QB 14/07 confirms the CIR can include a statement relating to a proscribed question as a condition, assumption or in the description of a private or product ruling.

QB 14/07 - PDF format (97kb | 4 pages)

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QB 14/04: Income tax - Depreciation roll-over relief for Canterbury

Section EZ 23B of the Income Tax Act 2007 provides roll-over relief for depreciation recovery income received by taxpayers affected by the Canterbury earthquakes. This QWBA clarifies some uncertainties about how to apply the formula that is used to calculate the amount of the depreciation recovery income that can be allocated against the cost of replacement property. The item outlines the depreciation roll-over relief provisions and gives a step-by-step approach, aided by examples, to demonstrate how the formula works. It also sets out the Commissioner's operational approach to certain situations.

QB 14/04 - PDF format (51kb | 10 pages)

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QB 14/02: Income tax - Entry of a new partner into a partnership - effect on continuing partners

QB 14/02 considers when the entry of a new partner into a partnership will have income tax consequences for continuing partners.

QB 14/02 - PDF format (35kb | 5 pages)

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QB 14/01: Income tax - adjustments for trading stock (including raw materials) taken for own use or consumption

This QWBA concludes that any adjustment for trading stock taken by sole traders or partners in a partnership for their own use or consumption is to be based on the market value of the trading stock rather than cost. This represents a change in the Commissioner's practice as previous publications advised that any adjustment be based on the cost of the trading stock ("Value of produce used" Public Information Bulletin No 29, p 7 (February 1966); Direct Selling IR 261; Farming Income IR3F).

QB 14/01 - PDF format (56kb | 8 pages)

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QB 13/05: Income tax - deductibility of a companion's travel expenses

QB 13/05 considers the deductibility of a companion's travel expenses. It applies to individuals, sole traders and partners in partnership, but not companies.

QB 13/05 - PDF format (42kb | 6 pages)

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QB 13/04: Income tax - retention money

This QWBA does not represent a change in the Commissioner's longstanding published view on the tax treatment of retention money. This item replaces and updates an item published in March 1980 in Public Information Bulletin No 103.

QB 13/04 - PDF format (39kb | 5 pages)

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QB 13/01: Depreciation of commercial fit-out

QB 13/01 considers whether commercial buildings can be re-characterised into components of a commercial fit-out in order to claim depreciation.

QB 13/01 - PDF format (112kb | 3 pages)

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QB 12/13: Income tax - Is a tax credit allowed for state income tax paid in the United States of America?

QB 12/13 confirms that a tax credit is allowed for state income tax paid on United States-sourced income, if substantially of the same nature as NZ income tax.

QB 12/13 - PDF format (25kb | 3 pages)

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QB 18/13: Income tax – what is the tax treatment of allowances paid and benefits provided to farm workers?

This Question We’ve Been Asked (QWBA) considers the income tax treatment of allowances or benefits paid or provided to employees in a farming context. It addresses a range of allowances sometimes paid in a farming context and sets out the Commissioner’s view on the extent to which they can be paid as exempt from tax. The QWBA withdraws and replaces several items previously published in Public Information Bulletins.

QB 18/12: Are war pensions paid under the Dutch ABVP Scheme exempt from income?

This Question We’ve Been Asked confirms PIB 168-17 “War pensions – Section 61(10) Income Tax Act 1976”, which stated that pensions under the Dutch (Benefit Act for Victims of Persecution 1940-1945) are tax exempt.

QB 18/09: Income tax - can sharemilkers and contract milkers deduct farmhouse expenditure using the approach in IS 17/02?

The Commissioner’s view on the appropriate treatment of farmhouse expenses in different circumstances is set out in interpretation statement "IS 17/02: Income tax - deductibility of farmhouse expenses". This Question We’ve Been Asked (QWBA) clarifies that sharemilkers and contract milkers (subject to meeting the requirements of the QWBA) can use the approach in the interpretation statement to claim a 20% deduction for farmhouse expenditure without the need to calculate actual business use.

QB 18/08: Binding rulings - Effect of the Commissioner changing her mind in relation to the application of s BG 1

This item considers the situation where a binding private or product ruling has been issued for an ongoing arrangement, and the Commissioner’s view of how the general anti-avoidance provision applies to the arrangement subsequently changes. The item concludes that the Commissioner can apply the anti-avoidance provision to any period following the expiry of the ruling.

QB 18/07: When is an arrangement considered to be “materially different” from the arrangement identified in a private or product ruling?

This item considers when an arrangement (the revised arrangement) will be “materially different” from the arrangement identified in a private or product ruling for the purpose of ss 91EB(2)(a) and 91FB(2)(a) of the Tax Administration Act 1994. It concludes that the revised arrangement is “materially different” for the purpose of ss 91EB(2)(a) and 91FB(2)(a) if, in relation to a tax type, the difference between the revised arrangement and the arrangement identified in the ruling is capable of affecting the tax outcome referred to in the ruling. Whether the revised arrangement is materially different from the arrangement identified in the ruling will be considered on a case-by-case basis, because it will turn on the facts and circumstances of each case.

QB 18/06: Can a registered person issue a combined tax invoice and credit or debit note?

This item confirms you can combine tax invoices, credit notes, and debit notes in a single document as long as they each relate to the different supplies. The item provides a brief summary of when credit notes and debit notes must be issued, together with some examples and accompanying sample documents.

QB 18/05: Income tax - insurance - personal sickness and accident insurance taken out by employer for the benefit of an employee

This item considers the income tax treatment of a personal sickness or accident insurance policy that is taken out by an employer for the benefit of an employee. It concludes that the amount of the premiums is generally deductible to the employer. Unless the premium paid is for income protection insurance, the premiums paid will be subject to FBT. It also sets out when an amount paid out under the policy will be taxable income of the employee.

QB 18/04: Income tax - insurance - personal sickness and accident insurance taken out by employee with employer paying the premiums on employee’s behalf

QB 18/04 looks at the income tax treatment of a personal sickness or accident insurance policy taken out by an employee where the premiums are paid by the employer.

QB 18/03: Income tax - insurance - term life insurance policy taken out by employer for the benefit of an employee

This item considers the income tax treatment of a term life insurance policy taken out by an employer for the benefit of an employee (or their spouse, civil union partner, de facto partner, or child). It concludes that the amount of the premiums is deductible to the employer and subject to FBT. Lump sums paid out under the policy will not be taxable income of the employee (or the employee’s estate).

QB 18/02: Income tax - insurance - term life insurance policy taken out by employee with employer paying the premiums on employee’s behalf

This item considers the income tax treatment of a term life insurance policy taken out by an employee for their own benefit where the premiums are paid by the employer. It concludes that the amount of the premiums is deductible to the employer and subject to PAYE for the employee. Lump sums paid out under the policy will not be taxable income of the employee (or the employee’s estate).

QB 18/01: Can a fit-out of an existing building be "improvements" for the purposes of s CB 11?

QB 18/01 sets out the CIR's view that a fit-out of an existing building may constitute improvements for the purposes of s CB 11 and sale proceeds may be taxable.

QB 17/10: Income tax and fringe benefit tax - insurance - group insurance policy taken out by employer for the benefit of an employee

QB 17/10 considers the income tax and FBT treatment of group insurance policies taken out by an employer who holds the policy on behalf of its employees.

QB 17/09: Is there a full or partial disposal when an asset is contributed to a partnership as a capital contribution?

This item is about whether there is a full or partial disposal of an asset where a person contributes an asset to a general or limited partnership as a capital contribution. The Commissioner’s position is that there is a full disposal. The Commissioner has published a transitional operational position for taxpayers who have applied a partial disposal approach prior to the issue of this item. You can find information on this transitional position from the Operational positions link on the left menu.

QB 17/08: Are proceeds from the sale of gold bullion income?

This Question We’ve Been Asked considers whether proceeds from the sale of gold bullion will give rise to income under s CB 4. It concludes that in most cases gold purchased in bullion form will be purchased for the dominant purpose of disposal, so the amount derived on its disposal will be income under s CB 4. However, there may sometimes be situations where the Commissioner may accept that the dominant purpose in acquiring gold bullion was to retain it for reasons other than eventual disposal. If a taxpayer asserts that they did not acquire gold bullion for the dominant purpose of disposal, the onus is on them to satisfactorily show that.

QB 17/07: Resident and non-resident withholding taxes: Non-cash dividends

QB 17/07 considers whether the income of a person who receives a non cash dividend includes any resident or non-resident withholding tax paid for the dividend.

QB 17/06: Income tax: Insurance – key-person insurance policies

QB 17/06 explains the income tax treatment of key-person insurance policies for replacing lost profits resulting from the death or disablement of a key employee.

QB 17/05: Income tax - whether YouTube receipts are taxable

QB 17/05 considers whether YouTube receipts are subject to income tax, and concludes that in many cases they are taxable.

QB 17/03: Tax Administration Act 1994 – the period for which a private or product ruling applies

QB 17/03 sets out the period for which private or product rulings generally apply under the CIR's current practice.

QB 17/02: Income tax - date of acquisition of land, and start date for 2-year bright-line test

This Question We’ve Been Asked deals with the issue of when land is acquired under s CB 15B. It concludes that what is relevant is when the first interest in the land (ie, the particular estate) that is being disposed of was acquired. In a typical land purchase this will be when a binding contract to purchase the land is formed (even if some conditions still need to be met). The item also looks at when the 2-year period for the bright-line test starts, which is generally not the same date as the date land is acquired under s CB 15B. Since the item was consulted on, the Commissioner has reached a different view on the application of the bright-line test to nomination situations from that in the draft item. As a result of submissions received and further consideration of the issue, the item concludes that in a nomination situation the bright-line test will not apply because there is no disposal by the nominator.

QB 17/01: Depreciation treatment for 'Buildings with prefabricated stressed-skin insulation panels'

QB 17/01 sets out 'Buildings with prefabricated stressed-skin insulation panels' in the Buildings and Structures asset category of the Table of Depreciation Rates.

QB 16/08: Income tax – deductibility of the costs of obtaining a detailed seismic assessment of a building

This item considers whether expenditure incurred in obtaining a detailed seismic assessment (DSA) of a building is deductible. The Commissioner concludes that DSA costs are revenue and therefore deductible in most of the situations considered. The exception is where DSA costs are incurred as part of a capital project. In this case they are capital and non-deductible.

QB 16/07: Income tax – land sale rules – main home and residential exclusions – regular pattern of acquiring and disposing, or building and disposing

QB 16/07 considers when land sellers/renovators have a 'regular pattern' of transactions that prevent them using exclusions in the land sale rules.

QB 16/06: Income tax - land acquired for a purpose or with an intention of disposal

QB 16/06 examines when proceeds from the disposal of land acquired with a purpose or intention of disposal are taxable. Also discusses the 2 year 'bright-line' rule.

QB 16/05: Income tax - donee organisations and gifts

This provides guidance on when payments are gifts for income tax purposes for both donee organisations when issuing donation receipts and for their supporters when claiming donation tax credits.

QB 16/01: Income tax - Working for Families Tax Credits - principal caregiver -dependent child - primary responsibility for day-to-day care - meaning of "temporary basis"

QB 16/01 considers whether a person looking after a child on a temporary basis can become eligible to receive Working for Families Tax Credits.

QB 15/15: Income tax - first aid allowances

QB 15/15 considers whether allowances paid by employers to employees who are designated first aiders are taxable, and whether reimbursements are exempt income.

QB 15/13: Income tax - whether the cost of acquiring an option to acquire revenue account land is deductible

QB 15/13 considers the deductibility of the cost of an option to acquire revenue account land applying the financial arrangement rules and s DB 23.

QB 15/12: Depreciation treatment for "Buildings with prefabricated stressed-skin insulation panels"

QB 15/12 considers the depreciation treatment for buildings with prefabricated stressed-skin insulation panels. Replaced in 2017 by QB 17/01.

QB 15/11: Income tax - scenarios on tax avoidance - 2015

This item is about the application of the general anti-avoidance provision of section BG 1 to three scenarios discussed at a tax conference in 2014. They concern the use of a limited partnership as part of the restructuring of a business, borrowing to invest in a portfolio investment entity (PIE), and where trustees of a discretionary trust take into account the tax position of the beneficiaries when making decisions about distributions of beneficiary income. This item concludes that section BG1 would apply in the PIE scenario and not in the others.

QB 15/10: Income tax - insurance - personal sickness and accident insurance taken out by employer for the benefit of an employee

QB 15/10 considers the income tax treatment of a personal sickness or accident insurance policy taken out by an employer for the benefit of an employee.

QB 15/09: Income tax - insurance - personal sickness and accident insurance taken out by employee with employer paying the premiums on employee's behalf

QB 15/09 considers the income tax treatment of a personal sickness or accident insurance policy taken out by an employee where the premiums are paid by the employer.

QB 15/08: Income tax - tax treatment of allowances paid to chainsaw operators

QB 15/08 considers whether a chainsaw reimbursing allowance can be paid tax-free.

QB 15/07: Tax Administration Act 1994 - meaning of "due and payable" under section 91E(4)(d)(i)

This Question We've Been Asked considers when a tax, duty or levy will be "due and payable" under s 91E(4)(d)(i) of the Tax Administration Act 1994. The Commissioner may not make a private ruling if the matter a private ruling is sought on concerns a tax, levy or duty that is "due and payable". This will occur on the due date for payment of that tax type and tax period (regardless of whether an amount of tax is actually payable).

QB 15/06: Income tax - insurance - term life insurance policy taken out by employer for the benefit of an employee

This item considers the income tax treatment of a term life insurance policy taken out by an employer for the benefit of an employee (or their spouse, civil union partner, de facto partner, or child).  It concludes that the amount of the premiums is deductible to the employer and subject to FBT.  Lump sums paid out under the policy will not be taxable income of the employee (or the employee's estate).

QB 15/05: Income tax - insurance - term life insurance policy taken out by employee with employer paying the premiums on employee’s behalf

This item considers the income tax treatment of a term life insurance policy taken out by an employee for their own benefit where the premiums are paid by the employer.  It concludes that the amount of the premiums is deductible to the employer and subject to PAYE for the employee.  Lump sums paid out under the policy will not be taxable income of the employee (or the employee’s estate).

QB 15/02: Income tax - major development or division - what is "significant expenditure" for section CB 13 purposes?

This Question We've Been Asked deals with what expenditure is relevant for s CB 13 purposes, and when such expenditure will be regarded as "significant". The Commissioner has published an operational position on what is "significant expenditure" for section CB 13 purposes in relation to this QWBA. You can find this information from the Operational positions link on the left menu.

QB 15/04: Income tax - Whether it is possible that the disposal of land that is part of an undertaking or scheme involving development or division will not give rise to income, even if no exclusion applies

This item considers whether it is possible that the disposal of land that is part of an undertaking or scheme involving development or division will not give rise to income under s CB 12 or s CB 13, even if none of the statutory exclusions apply.  The item concludes that if an undertaking or scheme involving development or division has been carried on (and meets the other criteria in s CB 12 or s CB 13) the proceeds on disposal of all of the land will be taxable under the relevant provision unless an exclusion applies.  However, the Commissioner will accept that s CB 12 or s CB 13 does not apply to the disposal of any given part of the land if the taxpayer can provide satisfactory evidence that the undertaking or scheme was not carried on with a view to the disposal of that land.

QB 15/03: Income tax - changing to a different depreciation rate for an item of depreciable property

This Question We've Been Asked (QWBA) considers the circumstances in which a taxpayer is required to change the depreciation rate they are using for an item of depreciable property.  The QWBA explains those circumstances and provides examples showing how these circumstances might arise in practice.  The QWBA does not address the issue of how to identify an item of depreciable property.

QB 15/01: Income tax - tax avoidance and debt capitalisation

QB 15/01 considers a debt capitalisation scenario, and whether the general anti-avoidance provision in section BG 1 applies.

QB 14/12 : Income tax - foreign tax credits for amounts withheld from United Kingdom pensions

QB 14/12: Income tax - foreign tax credits for amounts withheld from United Kingdom pensions (Question We've Been Asked, 2014).

QB 14/11: Income tax - scenarios on tax avoidance

QB 14/11 considers scenarios on tax avoidance relating to interest deductions, look-through companies and substituting debentures.

QB 14/09: Income tax - Meaning of "excessive remuneration" and "excessive profits or losses" paid or allocated to relatives, partners, shareholders or directors

This item considers the meaning of excessive remuneration and excessive profits or losses when they are paid or allocated to relatives, partners, shareholders or directors.  This item arose out of the recent PIB/TIB review and updates and replaces a number of previous items that were out of date. 

QB 14/08 Income Tax - Costs of demolishing an existing building on a building site

QB 14/08 explains that the costs of demolishing an existing building are not part of the cost of a new building, and are not deductible for income tax purposes.

QB 14/07 Tax Administration Act 1994 - Proscribed Questions

QB 14/07 confirms the CIR can include a statement relating to a proscribed question as a condition, assumption or in the description of a private or product ruling.

QB 14/04: Income tax - Depreciation roll-over relief for Canterbury

Section EZ 23B of the Income Tax Act 2007 provides roll-over relief for depreciation recovery income received by taxpayers affected by the Canterbury earthquakes. This QWBA clarifies some uncertainties about how to apply the formula that is used to calculate the amount of the depreciation recovery income that can be allocated against the cost of replacement property. The item outlines the depreciation roll-over relief provisions and gives a step-by-step approach, aided by examples, to demonstrate how the formula works. It also sets out the Commissioner's operational approach to certain situations.

QB 14/02: Income tax - Entry of a new partner into a partnership - effect on continuing partners

QB 14/02 considers when the entry of a new partner into a partnership will have income tax consequences for continuing partners.

QB 14/01: Income tax - adjustments for trading stock (including raw materials) taken for own use or consumption

This QWBA concludes that any adjustment for trading stock taken by sole traders or partners in a partnership for their own use or consumption is to be based on the market value of the trading stock rather than cost. This represents a change in the Commissioner's practice as previous publications advised that any adjustment be based on the cost of the trading stock ("Value of produce used" Public Information Bulletin No 29, p 7 (February 1966); Direct Selling IR 261; Farming Income IR3F).

QB 13/05: Income tax - deductibility of a companion's travel expenses

QB 13/05 considers the deductibility of a companion's travel expenses. It applies to individuals, sole traders and partners in partnership, but not companies.

QB 13/04: Income tax - retention money

This QWBA does not represent a change in the Commissioner's longstanding published view on the tax treatment of retention money. This item replaces and updates an item published in March 1980 in Public Information Bulletin No 103.

QB 13/01: Depreciation of commercial fit-out

QB 13/01 considers whether commercial buildings can be re-characterised into components of a commercial fit-out in order to claim depreciation.

QB 12/13: Income tax - Is a tax credit allowed for state income tax paid in the United States of America?

QB 12/13 confirms that a tax credit is allowed for state income tax paid on United States-sourced income, if substantially of the same nature as NZ income tax.

QB 12/11: Income tax - look-through companies, rental properties and avoidance

This QWBA confirms that section BG 1 would not apply to the following arrangement: A person sells their family home at market value to a look-through company (LTC), in which they own 100% of the shares. The home is then used by the LTC as a rental property and is rented to a third party on an arm’s length basis. The LTC borrows from a bank to fund the purchase, and the person uses the funds raised from the sale to purchase a new family home. The person in their capacity as holder of an effective look-through interest in the LTC is able to deduct the interest incurred by the LTC on the loan.

QB 12/10: Do the historic depreciation rates continue to apply to grandparented structures acquired before 1 April 2005?

QB 12/10 considers whether historic depreciation rates continue to apply to grandparented structures acquired before 1 April 2005.

QB 12/09: Income tax - look-through companies: interest deductibility where funds are borrowed to make a payment to shareholders to reflect an asset revaluation

QB 12/09 considers look-through companies and interest deductibility where funds are borrowed to make a payment to shareholders to reflect an asset revaluation.

QB 12/08: Income tax - look-through companies: interest deductibility on funds borrowed to repay shareholder current accounts

QB 12/08 considers interest deductibility when a look-through company borrows money on arm's length terms to repay current account loans from shareholders.

QB 12/04: Income tax - deductibility of expenditure on widening or metalling a farm acess road or track

QB 12/04 considers the deductibility of expenditure on the widening and/or metalling of an existing farm road.

QB 12/03: Income tax - deductibility of expenditure on cattle stops

QB 12/03 looks at the deductibility of expenditure incurred on the construction of a cattle stop.

QB 12/05: Income tax - deductibility of expenditure on stock yards

QB 12/05 considers the deductibility of expenditure incurred on the construction of stock yards.

QB 12/02: Income tax - Treatment of quad bikes for depreciation purposes

This QWBA item considers how quad bikes are treated for depreciation purposes. It reaches the conclusion that quad bikes are treated as "motor vehicles" that are designed mainly to carry persons. This being so, the rate of depreciation applicable to them is set by section EE 29(3); 30% DV or 21% SL. This item is due to be published in TIB Vol. 24 No 3 (April 2012).

QB 12/01: Income tax - deductibility of expenditure on replacing and extending an inlet race to a dairy shed

This QWBA updates and replaces the item "Inlet Race to Milking Shed, Renewed and Extended", published in Public Information Bulletin No 22 (May 1965), at page 9. It is a requirement that any items that the PIB Review identifies as still relevant be republished. This QWBA sets out the Commissioner's view on the deductibility of expenditure on the construction of an inlet race to a dairy shed.

QB 11/03: Income tax - look through companies and interest deductibility

QB 11/03 considers interest deductibility where a loss-attributing qualifying company becomes a look-through company.

QB 11/02: Deductibility of expenditure incurred by bloodstock breeders in respect of horses that they race

QB 11/02 clarifies the deductibility of expenditure incurred by bloodstock breeders for horses they race or prepare for racing as part of their breeding business.

QB 11/01: Residential investment property or properties in Australia owned by New Zealand resident - NRWT treatment of interest paid to Australian financial institution

This QWBA clarifies IR's position on whether NZ residents who borrow money from Australian institutions to purchase residential investment properties in Australia are liable for non-resident withholding tax (NRWT) on the interest payable.

QB 09/06: GST - Apportionment of the cost of bare land for the purposes of a change-in-use adjustment

QB 09/06 considers apportionment method for determining the cost of bare land when bought for a taxable purpose and partially used for private or exempt purposes.

QB 10/06: Elections for qualifying company status

QB 10/06 considers who is required to sign a notice of shareholder election for qualifying company status, where nominees or bare trustees are involved.

QB 10/01: Reimbursing shareholder-employees for motor vehicle expenses and the use of the Commissioner's mileage rate

QB 10/01 considers reimbursing of shareholder-employees for motor vehicle expenses using the mileage rate, and clarifies the 'employee criteria'.

Are tax sparing disclosures still required?

A taxpayer who has claimed a foreign tax credit in respect of a tax sparing arrangement under a double taxation agreement must file a Tax sparing disclosure return (IR 486).

QB 09/05: Residential investment property or properties in Australia owned by New Zealand resident - NRWT treatment of interest paid to Australian financial institution

This QWBA clarifies Inland Revenue's position on whether New Zealand residents who borrow money from Australian financial institutions to purchase residential investment properties in Australia are liable for non-resident withholding tax (NRWT) on the interest payable.

QB 09/03: Decisions on application of CA 1(2) - common law interest and income under ordinary concepts

QB 09/03 considers income under ordinary concepts as applied to 'common law interest' payments following the 2005 High Court decisions in CIR v Buis and Burston.

QB 09/02: Holiday houses - income tax treatment

This item considers the income tax treatment of holiday houses that are rented out by their owners, and addresses the circumstances where owners of holiday houses will be allowed a deduction for expenditure incurred in owning the holiday house.

QB 09/01: Payments made in addition to financial redress under Treaty of Waitangi settlements - income tax treatment

QB 09/01 considers the income tax treatment of payments made by the Crown in addition to financial and commercial redress under a Treaty of Waitangi settlement.

QB 08/04: Income Tax Act 2007: research and development credits (subpart LH) - tax avoidance (section BG1)

QB 08/04 looks at tax avoidance implications of restructuring undertaken by a group of companies to become eligible for research and development tax credits.

Kiwisaver - creditable membership

Questions and answers to some questions we've received on "creditable membership" and eligibility for the member tax credit.

QB 08/03: Application for a private ruling or product ruling on an issue dealt with in a mutual agreement made under a Double Tax Agreement - Tax Administration Act 1994, sections 91E(4)(D)(ii) and 91F(4)(D)

This item addresses the procedure that would be followed by the Commissioner where an application for a binding ruling is made in respect of an issue that is dealt with in a mutual agreement under a Double Tax Agreement.

QB 08/02: Commissioner's power to issue a replacement ruling that operates retrospectively

QB 08/02 considers whether the CIR may withdraw a ruling and issue a replacement that operates retrospectively for all/some of the period of the withdrawn ruling.

QB 08/01: Tax Administration Act 1994 - Section 91E(4)(f) and self-assessment

This question we've been asked addresses whether s91E(4)(f) of the TAA '94 applies to a taxpayer's self-assessment where that taxpayer has has filed a tax return containing their assessment before lodging a binding ruling application regarding a transaction and year covered by that return.

QB 07/05 - Ability to rule where the Commissioner is auditing or investigating - whether the Commissioner has a discretion to rule or is prohibited

QB 07/05 considers whether the CIR has discretion or is prohibited from making a private ruling regarding a taxpayer who is being audited or investigated.

QB 07/02 - Whether The Minor Beneficiary Rule Exemption In Section HH 3B Applies On A $1,000 "Per Beneficiary" Or On A $1,000 "Per Beneficiary Per Trust" Basis.

QB 07/02 sets out the operational guidelines regarding the minor beneficiary rule exemption in s HH 3B of the Income Tax Act 2004.

Tax treatment of wooden scaffolding planks

We have recently been asked to clarify the income tax treatment of wooden planks used in scaffolding, ie, planks used as working platforms on metal-framed scaffolding.

Exemption from gift duty for dispositions of property made by or under an order of the Court: section 75(A) Estate and Gift Duties Act 1968

QB issued 2006 clarifies when the exemption from gift duty applies to dispositions of relationship property.

Private and product binding rulings - to whom do they apply?

QB issued 1998 considers private and product rulings and who they apply to under ss 91EB and 91FB of the Tax Administration Act.

Bankrupt's ability to carry forward accumulated losses

This item considers whether a taxpayer is entitled to carry forward pre-bankruptcy losses where the loss arises from the taxpayer paying the debts owing.

Records for controlled foreign companies or foreign investment funds to be available in English

Clarification of Inland Revenue's position as to whether taxpayers are required to provide financial and other underlying records, including evidence of foreign tax paid, in English for any controlled foreign companies ("CFCs") or foreign investment funds ("FIFs") they may hold when using the branch equivalent tax calculation method.

Website expenditure - deductibility

This QB issued August 2000 clarifies the tax treatment of expenditure incurred in creating a website to be used in deriving gross income.

Qualifying foreign private annuity exemption from the Foreign Investment Fund regime

This item clarifies the operation of the qualifying foreign annuity exemption in section CG 15(2)(g) of the Income Tax Act 1994.

Tourism service providers' payments made to tour guides or drivers - the income tax liability of those parties and the tour operator employing the guide or driver

This item concludes that the tour operator has no tax obligations in respect of the payments as the payments are not from the tour operators, not received in respect of or in relation to the employment of the payee.

Managing communications associated with a dispute referred to the Disputes Review Unit

How the Office of the Chief Tax Counsel deals with communications received for a dispute that has been referred to the Disputes Review Unit for adjudication.

When does derivation occur in relation to land sales with a deferred settlement, by business taxpayers who provide vendor finance?

This item sets out the Commissioner's view that derivation occurs when a sale takes place and a debt arises which can be sued upon.

Section 108 Tax Administration Act 1994 (TAA) - commencement of four year statutory period (November 2002)

QB issued 2002 clarifies when the 4 year statutory period in s 108 of the TAA commences for taxpayers with non-standard balance dates and when time bar takes effect.