Beruflich Dokumente
Kultur Dokumente
AA 1 sets out the main purposes of the Act: o To define net income and impose tax on it o To impose other obligations concerning tax o To set out rules for calculating and paying tax AA 2 words prevail over diagrams, flowcharts etc; and words mean what they are defined to mean
BB 2 sets out taxpayers main obligations to calculate and pay tax, and satisfy withholding obligations. BB 3 two rules that override the rest of the Act o CIR may counteract a tax advantage from a tax avoidance arrangement o DTAs override the Act
BD 1(5) income is assessable income unless it is: exempt, excluded, or non-residents foreign sourced income BD 2 An amount is a deduction if a person is allowed a deduction for the amount under Part D (Deductions) BD 3 all income must be allocated to an income year. BD 4(1) all deductions must be allocated to an income year. BD 4(2) a deduction is generally allocated to the income year in which the expenditure/loss in question is incurred. BE 1 tax must be deducted at source from certain kinds of payments. Eg PAYE, RWT (interest, dividends), NRWT (interest, dividends, royalties), FBT BH 1(1) defines DTA BH 1(2) sets out purposes if DTA. Main purpose is to provide relief from double taxation. 0ther purposes: to prevent avoidance and evasion, to facilitate information exchange, to assist in recovering unpaid tax. BH 1(4) tax treaties override domestic law.
YD 1(4) if subsection (3) applies, the person is treated as resident from the first of the 183 days until the person is treated under subsection (5) as ceasing to be a NZ resident YD 1(5) a person treated as a NZ resident only under subsection (3) stops being a NZ resident if they are personally absent from NZ for >325 days in total in a 12 month period. YD 1(6) the person is treated as non-resident from the first of the 325 days until they are treated again as resident under this section. YD 1(7) special rule for employees of NZ govt
Residence of companies
YD 2(1) - Company is resident in NZ if: o Its incorporated in NZ; or o Its head office is in NZ; or o Its centre of mgmt is in NZ; or o The directors, in their capacity as directors, exercise control of the company in NZ, even if the directors decision-making also occurs outside NZ YA 1 director is defined extremely widely including de facto directors, deemed directors and nominee directors De Beers Consolidated Mines Ltd v Howe [1906] (HL) A company resides for the purposes of income tax where its real business is carried on, and the real business is carried on where the central mgmt and control actually abides. Cannot have a situation where a company may have its mgmt and centre of trading in England under the protection of English law, and yet escape the appropriate taxation by the simple expedient of being registered abroad and distributing its dividends abroad.
Source
The significance of source is that non-residents pay NZ tax on income having a NZ source; and NZ residents are entitled to credit for foreign taxes paid on income not having a NZ source. YD 4(1) this section lists the types of income that are treated as having a source in NZ for the purposes of the Act YD 4(2) income derived from a business has a source in NZ if the business is wholly or partly carried on in NZ YD 4(3) income derived by a person from a contract has a source in NZ if it is made in NZ, or wholly or partly performed in NZ. Lovell and Christmas ltd v Commissioner of Taxes [1908] (PC) Issue - whether L liable to pay taxes in NZ on profits derived from sales in England of produce shipped from NZ L argued that no profits or income are received by them in NZ so they should not be liable for NZ taxes; Commissioner argued that the business was conducted in NZ and was liable for taxes. PC held - the business which yields the profit is the business of selling goods on commission in London; the profits received by L are paid to them under the contract of sale effected in London; contract of supply in NZ does not yield any profits and so L is not liable for tax. YD 4(4) income under CE 1 (amts derived in connection with employment) has a source in NZ if the amt is earned in NZ, even if the employer is not a NZ resident. YD 4(5) ACC payments have a source in NZ YD 4(6) pension has a source in NZ if payable by NZ govt YD 4(7) - income derived by a person as the owner of land in NZ has a source in NZ YD 4(8) - payments for the use of, or for the right to use, personal property in NZ have a source in NZ if: o paid by a NZ resident; or o paid by a non-resident, but are deductible by that person for NZ tax purposes YD 4(9) royalties have a source in NZ if...
YD 4(10) - income derived from shares in a company resident in NZ has a source in NZ. YD 4(11)(a) - interest and redemption payments derived from money lent in NZ have a source in NZ. YD 4(11)(b) - interest and redemption payments derived from money lent outside NZ have a source in NZ if either: o the money is lent to a NZ resident (unless the money is used by that person for the purposes of a business carried on by that person outside NZ through a fixed establishment outside NZ); or o the money is lent to a person who is non-resident, if the money is used by that person for the purposes of a business carried on by that person in NZ through a fixed establishment in NZ Securities issued by NZ govt, debentures by local govt and mortgage of land in NZ all are covered under this section. YA 1 interest is defined as meaning any payment for money lent whether periodical or not and however described and calculated but excluding redemption payments; and repayments of money lent. YA 1 defines fixed establishment YD 4(12) - income derived from the disposal of property situated in New Zealand has a source in New Zealand. YD 4(13) beneficiary income YD 4(14) and (15) air and sea transport YD 4(16) general insurance YD 4(17) life insurance YD 4(18) - Income derived directly or indirectly from any other source in New Zealand has a source in New Zealand.