Vol 33 No 7 TIB - August 2021

28 Jul 2021 TIB

Orders in Council

  • LI 2021/137 - Tax Administration (Canterbury Flood Event) Order 2021
  • LI 2021/154 – Income Tax (Deemed Rate of Return on Attributing Interests in Foreign Investment Funds, 2020–21 Income Year) Order 2021
  • LI 2021/166 – Covid-19 Resurgence Support Payments Scheme (July 2021) Order 2021

Ruling

  • BR Pub 21/03: Goods and services tax – debt factoring arrangements
  • Withdrawal notice for BR Pub 06/01

Operational statement

  • OS 21/02: Administration of the imported mismatch rule – section FH 11

Interpretation statements

  • IS 21/05: Non-cash dividends
  • IS 21/06: Income tax and GST – treatment of meal expenses

Questions we’ve been asked

  • QB 21/05: The application date for the depreciation of commercial buildings
  • QB 21/06: Income tax - tax treatment of cryptoassets received from an airdrop
  • QB 21/07: Income tax - tax treatment of cryptoassets received from a hard fork
  • QB 21/08: GST - How do the compulsory zero-rating of land rules apply to transactions involving commercial leases?

Determination

  • DEP107 - General tax depreciation rates for brake test rollers

BR Prd 21/04 StockCo Limited and StockCo Capital Limited

22 Jul 2021 Rulings

The Arrangement is the leasing of livestock by either StockCo Limited or StockCo Capital Limited to their customers to use solely in a farming business. StockCo will purchase the livestock either from the customer and then lease them back to the customer or from a third party and then lease them to the customer. The customer will lease the livestock over a period of usually four years. The livestock will be progressively culled (or may go missing or die) over the period of the lease, with cull payments being returned to StockCo.

This ruling replaces BR Prd 20/03.

IS 21/06 Income tax and GST – Treatment of meal expenses

07 Jul 2021 Interpretation statements

This statement covers the income tax and GST treatment of meal expenses incurred by self-employed persons. It also discusses the treatment of meal allowances paid to employees to illustrate the differences with the treatment of self-employed persons, and also the treatment of entertainment expenditure for the same reason.

Tax Information Bulletin Vol 33 No 7 – August 2021

IS 21/05 Non-cash dividends

02 Jul 2021 Interpretation statements

This interpretation statement considers when a transfer of company value from a company to a shareholder is treated as a dividend for tax purposes.  It focuses on the types of non-cash transactions that are often entered into between small and medium-sized companies and their shareholders.

Tax Information Bulletin Vol 33 No 7 – August 2021

DEP107 DEP107 - General Tax Depreciation Rates for brake test rollers

01 Jul 2021 Determinations

This determination sets depreciation rates for brake test rollers used in the ordinary course of business.

Tax Information Bulletin Vol 33 No 7 – August 2021

Vol 33 No 6 TIB - July 2021

01 Jul 2021 TIB

New legislation

  • Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021
  • Order in Council – LI 2021124 - Tax Administration (Direct Credit of Problem Gambling Levy Refunds) Order 2021

Ruling

  • BR Prd 21/03: Zap NZ Limited 

Question we've been asked

  • QB 21/04: When an employer is party to an employee share scheme, when does an employer's expenditure or loss under s DV 27(6) or income under s DV 27(9) arise?

Interpretation statement

  • IS 21/03: GST – Registration of non-residents under section 54B

Operational statements

  • OS 21/01: Income tax treatment of accommodation provided to employees
  • 2021 CPI adjustment to Operational Statement OS 19/03: Square metre rate for the dual use of premises
  • Kilometre rates for the business use of vehicles for the 2021 income year

Determinations

  • National Average Market Values of Specified Livestock Determination 2021
  • Determination FDR 2021/02: A type of attributing interest in a foreign investment fund for which a person may not use the fair dividend rate method.

OS 21/02 Administration of the imported mismatch rule - section FH 11

30 Jun 2021 Operational statements

This statement is intended to clarify the Commissioner’s expectations as to how taxpayers will meet their self-assessment obligations when applying the imported hybrid mismatch rule in s FH 11 of the Income Tax Act 2007 to payments to members of their control group, and how the rule will be administered by Inland Revenue in relation to such payments.

Tax Information Bulletin Vol 33 No 7 – August 2021

QB 21/08 GST - How do the compulsory zero-rating of land rules apply to transactions involving commercial leases?

29 Jun 2021 Questions we've been asked

Section 11(8D) of the Goods and Services Tax Act 1985 contains the compulsory zero-rating of land rules for commercial leases.  This question we've been asked explains how s 11(8D) operates.  It covers various factual situations, including:

  • the exclusion for rents and lump sum payments of 25% or less of the term consideration;
  • stand-alone lease assignments;
  • lease assignments in the context of business asset sales;
  • lease procurement services in the context of business asset sales;
  • lease procurement services where an existing lease is currently continuing on an implied term; and
  • lease procurement services where an existing lease is to be cancelled.

Tax Information Bulletin Vol 33 No 7 – August 2021

IS 21/04 Income tax and GST deductions for businesses disrupted by the COVID-19 pandemic

29 Jun 2021 Interpretation statements
This Interpretation Statement considers whether a business can claim an income tax deduction for expenditure or loss incurred where the business has downscaled or stopped operating because of the COVID-19 pandemic.  It also briefly considers the GST implications of these events.

QB 21/05 The application date for the depreciation of commercial buildings

22 Jun 2021 Questions we've been asked

This question we’ve been asked clarifies when the new rules providing for the depreciation of commercial buildings apply from.

Tax Information Bulletin Vol 33 No 7 – August 2021

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