The Commissioner of Inland Revenue may (or in some cases must) issue determinations about various tax issues such as accrual expenditure, depreciation, financial arrangements, foreign currency, livestock valuations, standard costs for boarding service providers, and childcare providers.
Accounting income method (AIM)
As part of legislation enacted on 21 February 2017, the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017, a new method for calculating provisional tax was introduced – the accounting income method (AIM).
Common Reporting Standard (CRS)
The Commissioner may determine certain matters for the purposes of the CRS applied standard and Part 11B of the Tax Administration Act 1994: Participating jurisdictions, Suspension of reportable jurisdictions; and Non-reporting financial institutions and excluded accounts.
Excluded entities and accounts
Commissioner determinations for the purposes of the CRS applied standard and Part 11B of the Tax Administration Act 1994 regarding non-reporting financial institutions and excluded accounts.
AEOI participating jurisdictions
Commissioner determinations for the purposes of the CRS applied standard and Part 11B of the Tax Administration Act 1994 regarding participating jurisdictions that have an agreement with New Zealand under which they will provide us with CRS information.
These variations concern the Commissioner’s additional discretion to extend a due date, deadline, time period or timeframe or vary a procedural or administrative requirement arising from COVID-19 or the Government’s response measures.
Taxpayers must depreciate all depreciable property, other than excluded depreciable property by applying the economic depreciation rate (also known as the general rate) applicable to that item of depreciable property. These rates are set out in Determination DEP1, which was issued in 1993. Since DEP1 was issued, we have issued further general determinations amending DEP1 which set new asset classes and depreciation rates. Find more information including the depreciation rate finder and depreciation claim calculator under Claiming depreciation on the Inland Revenue website.
Economic depreciation rates
These rates are determined by the Commissioner and are also known as general rates. They are arrived at by calculating the estimated useful life of an item of depreciable property and expressing that as a percentage of its cost.
Provisional depreciation rates
Taxpayers may apply to the Commissioner to have a provisional depreciation rate set for an item of depreciable property that has not had an economic rate set for it. Often these will be items that are new to the New Zealand tax base. Once set, the depreciation rate is available to be used by all taxpayers who may acquire that item of property.
Special depreciation rates
If a general economic or a provisional depreciation rate is not suitable for your asset, you may apply for your own special depreciation rate – see application form IR260B. Special depreciation rate determinations are not published.
These determinations provide concessions on tax treatment in response to specific disaster events.
Financial arrangements (accruals)
The Commissioner may determine certain matters relating to financial arrangements. Matters that can be determined include how a spreading method applies, what amounts will be solely attributable to an excepted financial arrangement and the future value of property.
General determinations set out the Commissioner’s view on how the financial arrangements rules apply to a specific type of financial arrangement. All general determinations are binding on the Commissioner and some are also binding on taxpayers.
A taxpayer can apply for a special determination to get certainty on how the Commissioner will apply the financial arrangements rules to a particular financial arrangement. These determinations only apply to the particular financial arrangements and taxpayers to which they relate, and will often be published in anonymous form.
These determinations provide currency conversion methods and exchange rate sources for use by branches and foreign residential rental properties, and the exchange rates we accept for converting foreign currency amounts to New Zealand dollars under the controlled foreign company (CFC) and foreign investment fund (FIF) rules.
These determinations provide currency methods and exchange rate sources for use by branches.
CFCs and FIFs
These determinations provide the exchange rates acceptable to Inland Revenue for converting foreign currency amounts to New Zealand dollars under the controlled foreign company (CFC) and foreign investment fund (FIF) rules.
Foreign residential rental properties
These determinations provide currency methods and exchange rate sources for use by foreign residential rental properties.
Controlled foreign companies (CFCs)
These determinations specify that the insurer is a non-attributing active CFC or member of a group of non-attributing active CFCs for the purposes of section EX 21B of the Income Tax Act 2007.
These determinations relate to disclosure requirements by persons who have a control or income interest in a foreign company or an attributing interest in a foreign investment fund.
Foreign investment funds (FIFs)
These determinations specify whether an investor may or may not use the fair dividend rate method to calculate foreign investment fund income from interests in certain foreign investment funds.
The Commissioner must, from time to time, make determinations of national standard costs of specified livestock and national average market values for specified livestock.
National average market values
These determinations establish the national average market value of specified livestock for a specified period and are published in the June Tax Information Bulletin each year.
National standard costs
These determinations establish the national standard costs of specified livestock for a specified period and are published in the March Tax Information Bulletin each year.
Standard-cost household service
The Commissioner may determine standard costs for household services provided by natural persons in their own domestic accommodation. This takes the form of determinations and periodic CPI adjustments.
Boarding service providers
Standard-costs for private boarding services provided from domestic accommodation.
Standard-cost household service for childcare providers.
Home-share care providers
Standard-cost household service for home share care providers.
Standard costs that can be treated as expenditure incurred in deriving income from providing a short-stay accommodation service (for example, Airbnb).
These determinations generally represent statutory discretions exercised by the Commissioner of Inland Revenue in respect of a specific tax issue. They may be initiated by the Commissioner, a taxpayer or a class of taxpayers. They generally set out amount(s) of expenditure that the Commissioner would accept as deductible or amortisation rates(s) that would apply to specific type of expenditure.