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Inland Revenue

Tax Policy

Table of Contents

Letter to the Minister of Finance

Statement by the Ministers of Finance and Revenue

Table of Contents

Chapter 1 – Introduction

1.1 Purpose of This Report
1.2 Outline of the Report
1.3 Grey List Exemption"
1.4 Compliance and Administration
1.5 Trust Transition
1.6 Credit Streaming
1.7 Draft Legislation

Chapter 2 – Branch-Equivalent Regime Part 1: Definitions

2.1 Introduction
2.2 Relationship of BE Regime to Existing Act
2.3 Definition of "Company" and "Trustee"
2.4 Residence: Individuals
2.5 Residence: Companies
2.6 Definition of "Nominee"
2.7 Definition of "Associated Persons"

Chapter 3 – Branch-Equivalent Regime Part 2: Determination of Control and Income Interests

3.1 Introduction
3.2 Definition of Interests In a Company
3.3 Frequency of Measurement of Interests
3.4 Calculation of Control Interests
3.5 Calculation of Income Interests

Chapter 4 – Branch Equivalent Regime Part 3: Attribution and Computation of Branch Equivalent Income, Losses and Foreign Tax Credits

4.1 Introduction
4.2 Attribution of Income and Losses
4.3 Adoption of CFC' s Accounting Year
4.4 BE Income Calculation
4.5 Foreign Tax Credits
4.6 Attributed Foreign Losses
4.7 Application of the Regime to CFCs Resident in a "Grey List" Country
4.8 Change of Residence of CFC or Taxpayers
4.9 Determination of Residence

Chapter 5 – Foreign Investment Funds

5.1 Introduction
5.2 Definitions
5.3 Calculation of FIF Income or Loss
5.4 Treatment of Losses
5.5 Entry and Exit Provisions
5.6 Conflict Provisions

Chapter 6 – Trusts

6.1 Introduction
6.2 Existing Treatment of Trusts
6.3 Overview of Trust Regime
6.4 Definition of a Settlor
6.5 Trustee Income
6.6 Settlor Liability: Superannuation Funds
6.7 Settlor Liability: New Residents
6.8 Settlor Liability: Charitable Trusts
6.9 Beneficiary Income
6.10 Distributions From Qualifying Trusts
6.11 Distributions From Foreign Trusts
6.12 Distributions From Trusts Settled by New Residents
6.13 Non-Qualifying Distributions
6.14 Financial Assistance to Trusts
6.15 Residence of a Beneficiary

Chapter 7 – Disclosure and Default Methods

7.1 Introduction
7.2 Disclosure: BE Regime
7.3 Disclosure: FIF Regime
7.4 Disclosure: Trusts
7.6 Default Methods

Chapter 8 – Transition

8.1 Introduction
8.2 BE Regime Transition
8.3 Trust Transition

Chapter 9 – Imputation and Withholding Payment Systems

9.1 Introduction
9.2 Draft Legislation
9.3 Allocation Rules
9.4 Deemed Dividends: Allocation Rules
9.5 Producer Boards
9.6 Co-operative Companies
9.7 Sharemilking Arrangements
9.8 Capital Distributions
9.9 Carry Forward of Credits by a Company
9.10 Carry Forward of Unutilised Imputation Credits
9.11 Refunds of Dividend Withholding Payment
9.12 Integration With BE Regime: Individuals
9.13 Group Investment Funds

Chapter 10 – Imputation: Related Issues

10.1 Introduction
10.2 Dividend Definition
10.3 Section 190
10.4 Section 197
10.4 Winding Up Distribution Tax
10.5 Fringe Benefits Received by "Major Shareholders"
10.6 Excess Retention Tax

Chapter 11 – Summary and Conclusion

11.1 Introduction
11.2 BE Regime
11.3 FIF Regime
11.4 Trusts
11.5 Disclosure
11.6 Imputation and Withholding Payment Systems
11.7 Summary of Recommendations
11.8 Conclusion

Annex – Draft Legislation