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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 2017, other interpretations are sorted by the year in which they were issued.
IS 18/06 - Income tax – treatment of costs of resource consents
This Interpretation Statement addresses the various ways that the cost of a resource consent can be deducted or depreciated. Depending on the circumstances, expenditure may be deductible under the principles in IS 17/01: “Income tax – deductibility of feasibility expenditure”, as expenditure on revenue account or under a specific provision in the Income Act 2007. In terms of depreciation, the Act treats certain resource consents as items of depreciable intangible property and allows the cost to be depreciated over the fixed life of the consent. Where resource consents are not depreciable intangible property the expenditure may be able to be capitalised into the cost base of another item of depreciable property and depreciated.
Date of issue: 5 November 2018
IS 18/06 - PDF format (1.37mb | 49 pages)
IS 18/05 - Income tax - donee organisations – meaning of wholly or mainly applying funds to specified purposes in New Zealand
This interpretation statement concerns donee organisations under s LD 3(2)(a) of the Income Tax Act 2007. It is relevant to organisations applying funds to purposes within New Zealand and to purposes overseas. It is not relevant to organisations listed in schedule 32 of the Act. The statement clarifies the interpretation of the requirement for a donee organisation to apply its funds “wholly or mainly” to charitable, benevolent, philanthropic, or cultural purposes within New Zealand. The statement also explains Inland Revenue’s “safe harbour” approach to administering this requirement. Inland Revenue will generally accept without further enquiry that an organisation meeting the minimum safe harbour percentage of 75% has met the requirement.
Date of issue: 20 September 2018
IS 18/05 - PDF format (917kb | 76 pages)
IS 18/05 - Interpretation statement 18/05 Fact sheet – applying the “safe harbour” approach
This fact sheet accompanies IS 18/05: Income tax - donee organisations – meaning of wholly or mainly applying funds to specified purposes in New Zealand. It sets out the most important information from IS 18/05 without the detailed legal reasoning. It includes examples from IS 18/05 of when funds are considered to be applied to purposes within New Zealand, and a fully-worked example of the safe harbour calculation.
Date of issue: 20 September 2018
IS 18/05 - PDF format (365kb | 19 pages)
IS 18/04 - Goods and services tax - single supply or multiple supplies
During Public Consultation on QB 18/14: GST treatment of fees that suppliers charge customers for using a credit or debit card the Commissioner signalled that she would be re-issuing IS 17/03: Single supply or multiple supplies.
The Commissioner was aware that some taxpayers had read example 4 of IS 17/03 as suggesting that a credit card surcharge would always be a separate exempt supply of financial services. This is not the Commissioner's position. IS 17/03 has therefore been re-issued as IS 18/04 to clarify that the provision of a payment facility will not always be an exempt supply of a financial service.
Date of issue: 13 September 2018
IS 18/04 - PDF format (489kb | 30 pages)
IS 18/03 - Income Tax – attribution rule for income from personal services.
This Interpretation Statement concerns the attribution rule for income from personal services in ss GB 27 to GB 29 and expands on “Attribution of Income” Tax Information Bulletin Vol 12, No 12 (December 2000): 49. The income attribution rule only applies where various threshold tests are met and no exemptions apply. The Interpretation Statement provides guidance on the application of each of those threshold tests and exemptions, to assist readers in determining whether the income attribution rule applies to their situation. It does not provide guidance on how to calculate the amount to be attributed.
Date of issue: 26 July 2018
IS 18/03 - PDF format (422kb | 24 pages)
IS 18/02 - Goods and services tax – GST treatment of distributions made by a trading trust to a beneficiary
This Interpretation Statement considers the GST treatment of a distribution made by a GST-registered trading trust to a beneficiary, where that distribution consists of goods forming part of the trust’s taxable activity. It notes that the supply will be an associated supply, and the different timing and value of supply rules that apply to associated supplies. It also considers situations where supplies may trigger obligations on the trading trust to register for or deregister from GST.
Date of issue: 24 July 2018
IS 18/02 - PDF format (334kb | 19 pages)
IS 18/01 - Taxation of trusts – income tax
This Interpretation Statement summarises the income tax law as it applies to trusts. It replaces and updates the Commissioner’s original statement on the trust rules in the “Explanation of Trusts” in the Appendix to Tax Information Bulletin Vol 1, No 5 (November 1989) which was based on the Income Tax Act 1976. The Interpretation Statement sets out the Commissioner’s view on the application of the trust rules for income tax purposes having regard to the changes made since the 1989 TIB item and the current Income Tax Act 2007.
Date of issue: 28 June 2018
IS 18/01 - PDF format (1,015kb | 133 pages)