Standard practice statements: Investigations

INV-470-Applications to keep records in Maori (Apr 98)

Introduction

This standard practice statement advises that the Commissioner will generally approve applications to keep records in Maori, provided that:

• The taxpayer complies with the requirements of sections 24 and 25 of the Goods and Services Tax Act 1985 ("GST Act"); and
  
  
• Numbers are recorded using Arabic numerals.  In order to accommodate the needs of third parties, Arabic numerals (i.e., 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9) are to be used to record numbers.

This policy applies from 1 May 1998.

Background

Sections 75 of the GST Act, and 22, 26, and 32 of the Tax Administration Act ("TAA"), require taxpayers to keep and retain sufficient records in the English language to enable ready ascertainment by the Commissioner or his delegates, of their liability to tax.  However, each of these sections provides discretion to the Commissioner who may, following a written application, allow records to be kept in an alternative language.

The legislative policy reason for the requirement to keep records in English is administrative convenience.  It allows the Commissioner to readily ascertain a taxpayer's liability.  However, a claim lodged with the Waitangi Tribunal under the Treaty of Waitangi Act prompted Inland Revenue to review its policy for exercising the discretion related to keeping records in a language other than English.

When considering a request from a taxpayer to keep records in Maori, Inland Revenue recognises that Maori is an official language of New Zealand.  We also recognise that the choice of language for business dealings is not a matter for the Commissioner to determine.  It is reasonable for persons whose business dealings are conducted in Maori to expect that Inland Revenue will be able to accommodate their language preference.

However, the revenue law obligations of third parties must also be considered.  When base records such as invoices and receipts are maintained in Maori there may be some inconvenience to other persons.  GST tax invoices and debit and credit notes raise a special problem.  They are necessary for ascertaining the tax liability of the issuer and of a third party.  They are, therefore, records covered by section 75(3) of the GST Act (i.e., they must be maintained in English unless the Commissioner gives permission to use another language).

There are also explicit requirements for specific English phrases to be used in these documents.  These phrases are:

• "tax invoice" (s. 24 & 25, GST Act)
• "copy only" – on copy of lost tax invoice, credit or debit note (s. 25, GST Act)
• "buyer created tax invoice – IRD approved" (s. 24, GST Act)
• "modified tax invoice – IRD approved" (s. 24, GST Act)
• "credit note" or "debit note" – on credit or debit notes (s. 25, GST Act)

There is no discretion to allow the use of expressions in Maori (or any other language) to satisfy the requirements imposed in sections 24 and 25 of the GST Act (which state that specific words must be used).

The decision by the Commissioner and his delegates to allow the keeping of records in Maori, is the exercise of an administrative discretion provided by the Revenue Acts having regard to the form of tax invoices and taxpayer obligations as prescribed by legislation.

Policy

Applications

When any person applies in writing to keep records (e.g., invoices, receipts, cash books, and journals) for tax purposes in Maori, permission will usually be granted, provided all numbers are recorded using Arabic numerals.  The application need not be in English, but must specify which records the taxpayer wishes to keep in Maori.

An application form in both English and Maori is available from Inland Revenue offices for use by persons wishing to take advantage of this policy.  The use of these forms will simplify applications and assist IRD to readily identify requests and provide a more timely response.

A person may seek approval to keep only some records in Maori.  In addition, where approval to keep certain records in Maori has been obtained, there is nothing to stop a person continuing to keep all or some of those records in English.  This would extend to having an individual document completed partly in Maori and partly in English.

Approval process

The Commissioner has delegated his authority, to approve applications, to officer level.  Authority to decline applications is confined to Team Leaders, Senior Investigators or Managers.  Refusals will only be on the basis those legislative requirements under the GST Act and TAA and the use of Arabic numerals are not satisfied.

The letter giving consent will advise:

• That the taxpayer must comply with the requirements of sections 24 and 25 of the GST Act in respect of the provision or creation of tax invoices and the issuing of debit and credit notes.
  
  
• That numbers must be recorded using Arabic numerals.
  
  
• The date from which those records can be kept in Maori (generally the date of the letter of approval).
  
  
• The approval is not a relaxation in the standard of record keeping [the requirements of sections 22 and 26 of the TAA and section 75 of the GST Act are not relaxed for this purpose].
  
  
• The approval does not mean IRD will communicate with taxpayers in Maori.

Further conditions

If permission is given to keep records in Maori, there is no relaxation in the standard of record keeping.  The requirements of sections 22 and 26 of the TAA and section 75 of the GST Act are not relaxed for this purpose.

The law is silent on the question of the language to be used in completing any returns that a person may be required to provide to the Commissioner.  The Commissioner will accept returns in the prescribed format, completed in the Maori language with numbers entered using Arabic numerals.

Impact on third parties

When base records such as invoices and receipts which have been completed in Maori, are used by third parties to ascertain their tax liability, that third party need not also apply for permission to use records kept in Maori.

The balance of commercial convenience between buyers and sellers will determine what language is used in any particular case.  Over time, the usual Maori expressions will become known within the community.  Interpretation will, therefore, become less difficult.

Policy application date

This policy applies from 1 May 1998.  It will apply to records coming into existence following approval of an application lodged with the Commissioner on or after that date.

Contact

Should you have questions about this policy, please contact the Kaitakawaenga Maori at your nearest Inland Revenue Service Centre or Branch Office.


Tony Bouzaid

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Examples

The following examples do not form part of the policy but are provided to indicate its general effect.

Example 1

A New Zealand resident GST registered person, who is fluent in English, operates a shop in Whangarei.  They are also fluent in Maori and have asked for approval to keep certain GST business records in Maori.

Approval would be granted, subject to the requirements that the registered person uses Arabic numerals and complies with the requirements of sections 24 and 25 of the GST Act.

Example 2

A New Zealand resident taxpayer, who regards English as their second language and has limited bookkeeping skills, operates a farm on the East Coast.  The taxpayer is fluent in Maori and has asked for approval to keep all their business records in Maori.

Approval would be granted, subject to the requirements that they use Arabic numerals and comply with the requirements of sections 24 and 25 of the GST Act and sections 22 and 26 of the TAA.  As in any other case, the taxpayer's records must be sufficient to allow the Commissioner to readily ascertain the taxpayer's tax liabilities.

Example 3

A large Maori incorporation is staffed by persons whose fluency in Maori and in English differs.  For cultural and policy reasons the incorporation wishes to maintain its records in Maori to the greatest extent possible within the law.  The taxpayer has asked for approval to keep all of its business records in Maori.

Approval would be granted, subject to the requirements that the taxpayer uses Arabic numerals and comply with the requirements of sections 24 and 25 of the GST Act and sections 22 and 26 (where applicable) of the TAA.

Example 4

A New Zealand resident private company runs a business teaching Te Reo Maori.  The company seeks approval to issue GST tax invoices printed and completed entirely in Maori.

Approval would be granted, subject to the requirements that the taxpayer uses Arabic numerals and complies with the requirements of sections 24 and 25 of the GST Act and section 22 of the TAA.

Example 5

A New Zealand resident GST registered person receives a tax invoice completed in Maori.  The person, who does not speak or understand Maori, contacts her local Inland Revenue office and asks the office to intervene and require the issuer of the invoice to replace it with one completed in English.

Provided the invoice has been completed in accordance with the requirement of section 24 of the GST Act and numbers are entered using Arabic numerals, the person would be advised that the document complies with our record keeping requirements in its present form.  Any dispute over the language used in completing the invoice is a matter to be settled between the recipient of the invoice and the issuer.

Example 6

A New Zealand resident taxpayer makes a claim in their annual income tax return for the housekeeper rebate. This is in respect of payments made to a caregiver that cared for the taxpayer's child to enable the taxpayer to work.  Upon being requested to supply a receipt to substantiate the housekeeper rebate claimed, the taxpayer supplies a receipt completed entirely in Maori, including the numbers for the amount paid written using Maori words.

The receipt would not be accepted as a satisfactory record to support the rebate claim because numbers for the amounts paid have not been entered using Arabic numerals.

 

 

Date published: 13 Oct 2008

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