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QB 22/01
04 Apr 2022

Can a payment that compensates for the time value of money be taxable income if it is outside the statutory definition of “interest”?

This item updates and clarifies the Commissioner's view on the High Court case of CIR v Buis as it relates to the interaction between the specific provision taxing interest and the provision taxing income under ordinary concepts.  The Commissioner now considers that CIR v Buis can be read consistently with her view that an amount that may be described as interest may be income under ordinary concepts or under another provision. 

Tax Information Bulletin - May 2022

Income Tax Act 2007 – s CA 1(2), CC 4(1) and YA 1

CIR v Buis and Anor (2005) 22 NZTC 19,278 (HC)
Reid v CIR (1985) 7 NZTC 5,176 (CA)