Vol 18 No 5
Issued
01 Jun 2006

TIB - June 2006

Question we've been asked

  • Correction – Threshold to account for GST on a payments basis

Binding rulings

  • Product ruling – BR Prd 06/01
  • Product ruling – BR Prd 06/02
  • Public ruling – BR Pub 06/01
  • Public ruling – BR Pub 06/02

Legislation and determinations

  • General Depreciation Determination DEP54
  • CPI Adjustment 06/01 for Determination DET-001: Standard-cost household service for childcare providers
  • Preliminary CPI Adjustment – CPI 06/02 for Determination DET-05/03: Standard-cost household service for boarding service providers

Legal decisions – case notes

  • LAQC losses must be attributed: New Zealand Ostrich Export Company Limited v The Commissioner of Inland Revenue
  • Taxpayer unsuccessful in attempt to compel Commissioner to accept and allow late objection: FB Duvall v The Commissioner of Inland Revenue
  • Application for recall: Clarence John Faloon v The Commissioner of Inland Revenue
  • Proceedings struck out for exceeding jurisdiction: Graham Ashley Robert Palmer v The Commissioner of Inland Revenue

Rewrite advisory panel

  • Summary of unintended legislative change submissions where Rewrite advisory panel considered there is no unintended legislative change

Standard practice statements

  • SPS 06/01 – Discretion to cancel or not assess shortfall penalties for taking an unacceptable tax position
  • SPS 06/02 – Writing off outstanding tax 

New legislation

  • Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006
  • Tax Administration Amendment Act 2006
  • Orders in Council: Student loan scheme charitable organisations
  • New determination: Determination G30: debt securities, finance leases and hire purchase agreements denominated in New Zealand dollars 

Corrections

In SPS 06/02 Writing off outstanding tax published under the section “Standard practice statements” pp 55-64, paragraph 63 is incorrect.

Paragraph 63 of the standard practice statement should read:

63. If Inland Revenue considers that recovery of part, or all of the outstanding tax would not represent an efficient use of administrative resources, then pursuant to section 176(2)(a), the outstanding tax would be written off. 

In “New Legislation” page 78 in the second part of the example the reference to “1 July 2006” should read “1 July 2005” and the reference to “1 July 2007” should read “1 July 2006”. 

The example implicitly assumes that the employer can use the tax value option in the return for April–June 2006, although the vehicle was owned before that date.

This would be the case if:

  • when the vehicle was owned for the whole year, at least five years had lapsed since the beginning of the vehicle’s initial return period; and
  • when the vehicle was acquired on 7 December 2005, the first return for the vehicle is for the April–June 2006 quarter (that is, the vehicle was not used to provide fringe benefits until that quarter even though it had been purchased some months earlier).