CRS 2019/016
Issued
30 Jul 2019

CRS applied standard – excluded account determination – a Member’s Account in the AMP (NMLA) New Zealand Superannuation Scheme

A Member’s Account in the AMP (NMLA) New Zealand Superannuation Scheme is an excluded account for the purposes of the CRS applied standard and requirements under Part 11B of the Tax Administration Act 1994

Determination CRS 2019/016 – A Member’s Account in the AMP (NMLA) New Zealand Superannuation Scheme is an excluded account for the purposes of the CRS applied standard and requirements under Part 11B of the Tax Administration Act 1994

Reference

This determination is made under s 91AAW of the Tax Administration Act 1994.

Interpretation

In this determination, unless the context otherwise requires:

  • “AML exemption requirements” means the requirements of Part 3 of the Schedule to the Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2018.
  • “AML procedures” means anti-money laundering and countering financing of terrorism procedures under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
  • “CRS applied standard” means the CRS Standard as modified by section 185O for the determination of requirements under the Tax Administration Act 1994.
  • “CRS Publication” means the Standard for Automatic Exchange of Financial Account Information in Tax Matters, published by the Organisation for Economic Co-operation and Development.
  • “CRS reporting period” means the period from 1 April 2018-31 March 2019 and any subsequent 12-month period from 1 April to the following 31 March.
  • "CRS Standard" means the Common Standard on Reporting and Due Diligence for Financial Account Information, as amended from time to time, which is a standard:
    1. developed by the Organisation for Economic Co-operation and Development and the Group of Twenty countries; and
    2. agreed by the Council for the Organisation for Economic Co-operation and Development on 15 July 2014; and
    3. contained in Part IIB of the CRS Publication.
  • “Employer” means AMP Services (NZ) Limited and any other entity which from time to time is or was a Participating Company.
  • “ESCT” has the same meaning as in s YA 1 of the ITA 2007.
  • "Financial Account" has the same meaning as in Section VIII(C)(1) of the CRS standard.
  • “FMC Act 2013” means the Financial Markets Conduct Act 2013.
  • “ITA 2007” means the Income Tax Act 2007.
  • “Member” means a person who holds an account with the Scheme.
  • “Member’s Account” means an account held by a Member in the Scheme.
  • “PAYE” has the same meaning as in s YA 1 of the ITA 2007.
  • “Participating Company” has the same meaning as in the Scheme Trust Deed.
  • “Permitted Withdrawal” means a withdrawal that is permitted to be made from a registered workplace savings scheme in terms of s 130 of the FMC Act 2013.
  • “Register of managed investment schemes” is defined in s 6 of the FMC Act 2013, and means the register of managed investment schemes kept under Schedule 2 of that Act.
  • “Retirement or pension account” means an excluded account that fully satisfies the requirements of subparagraph C(17)(a) of Section VIII of the CRS standard.
  • “Salary” has the meaning given to that term in the Scheme Trust Deed.
  • “Scheme” means the AMP (NMLA) New Zealand Superannuation Scheme, registered on the register of managed investment schemes as a workplace savings scheme under the FMC Act 2013.
  • “Scheme Trust Deed” means the trust deed for the Scheme (currently dated 26 October 2018) as amended from time to time.
  • “Service” has the same meaning as in the Scheme Trust Deed.
  • “Serving Member” means a Member who is in Service in New Zealand.
  • “Temporary Absence contribution” means a contribution made by a Member to a Member’s Account (in accordance with the Scheme Trust Deed) while on an absence from work agreed with their Employer.
  • “Work Visa” means a temporary visa granted under the Immigration Act 2009.

In this determination, any reference to a statute or exemption notice includes that statute or notice as amended or replaced from time to time, and any reference to a section or part is to the corresponding section or part of any amended or replacement statute or notice.

Discussion (which does not form part of the determination)

The trustees of the Scheme (in that capacity) conduct a business of investing, administering or managing financial assets or money on behalf of the Scheme and its Members. Therefore, in terms of the CRS Standard, the Scheme is an investment entity and a reporting New Zealand financial institution.

The Scheme is registered as a restricted workplace savings scheme under the FMC Act 2013 and is a defined benefit scheme.

As a workplace savings scheme the Scheme has the purposes of providing retirement, disability and death benefits as well as benefits to Members on ceasing Service with the Employer (whether immediately on ceasing Service or subsequently).

Scope of determination

A Member’s Account does not fully satisfy the requirements for a retirement or pension account in subparagraph C(17)(a) of Section VIII of the CRS Standard, but has substantially similar characteristics as well as other substituting characteristics which provide an equivalent level of assurance that such an account presents a low risk of being used to evade tax.

This determination is issued by the Commissioner of Inland Revenue and applies to a Member’s Account in the Scheme where each of the following conditions is satisfied (for the Scheme or the Member’s Account as applicable):

  • The Scheme continues to maintain the Member’s Account as part of a registered workplace savings scheme under the FMC Act 2013.
  • The Scheme remains closed to new members other than (for pension payment purposes) the widow or widower or a dependent of a qualifying deceased Member.
  • The Scheme continues to be subject to the AML exemption requirements (and, if those requirements are not met, to AML procedures).
  • The Member is a natural person who satisfies either of the following:
    • the Member is a Serving Member; or
    • the Member was (or is the widow or widower or a dependant of a Member who was) a Serving Member when the Member and the Employer contributed to the account.
  • The Member is not present in New Zealand on a Work Visa.
  • All contributions from the Employer are or have been subject to tax at source where New Zealand law requires or has required (e.g. ESCT).
  • All the Member’s contributions (including past contributions) are (or have been) deducted from payroll (Salary) as a portion of Salary and the Member’s Salary is (or, as applicable, was) either subject to PAYE (in the case of employee contributions) or otherwise subject to tax.
  • Any Temporary Absence contributions did not exceed the frequency and amount of the Member’s contributions immediately prior to the start of the agreed absence from work.
  • Annual contributions (including both Employer and Member contributions) to the Member’s Account continue to be less than or equal to USD 50,000 per annum (including any applicable aggregation rules set out in the CRS). The Scheme, being a defined benefit scheme, must adopt a reasonable method when determining the level of Employer contributions made to a Member’s Account.
  • Investment income from the Member’s Account is subject to income tax at the Scheme level and occurs at source (i.e. not subject to the Member filing a tax return).
  • All such taxation is reported to Inland Revenue by the payer, not the Member.
  • The Scheme continues to allow Members only to make Permitted Withdrawals.
  • No transfers have been made into the Member’s Account on or after 1 July 2017 from sources other than the Employer or Member contributions referred to above, and any transfers into the Member’s Account made before 1 July 2017 from sources other than those Employer or Member contributions were from entities or Financial Accounts that would, based on a reasonable assessment by the Scheme (in conjunction with the Employer as necessary and based on information in their possession) have been exempt by reason of meeting the requirements of:
    • subparagraph (C)(17)(a) or (b) of Section VIII of the CRS had the CRS applied prior to 1 July 2017; or
    • any of subparagraphs B(5) through (7) of Section VIII of the CRS had the CRS applied prior to 1 July 2017.
    A Member’s Account that otherwise satisfies the USD 50,000 contributions threshold outlined above will also not fail to satisfy this requirement solely because the Account may have received assets or funds transferred from such excluded accounts or excluded funds.

Determining that a Member’s Account in the Scheme is an excluded account, and specifying this under New Zealand law, does not frustrate the purposes of the CRS Standard.

Determination

A Member’s Account in the Scheme, as outlined in the scope of this determination, is an excluded account for the purposes of the CRS applied standard and requirements under Part 11B of the Tax Administration Act 1994. If any of the above conditions are not satisfied for a particular Member’s Account this determination will not apply to that account.

Application date

This determination applies for the CRS reporting period beginning 1 April 2018, and subsequent CRS reporting periods under the CRS applied standard.

Dated at Hamilton this 12th day of December 2019.

Tony Morris

Customer Segment Lead, Significant Enterprises Customer Segment

Tax Administration Act 1994, s 91AAW