Employee Income Flashcards
What section of the ITA governs visits by non-resident employees for 92 days or less?
CW 19
What is the title for section CW 19 of the ITA?
Amounts derived during short term visits.
What is the first requirement for income derived by a non-resident employee to be exempt income?
That the visit is for 92 days or less, counting the day or arrival and the day of departure as a whole day.
What is the second requirement for income derived by a non-resident employee to be exempt income?
That the person is in New Zealand for 92 days or fewer in any 12-month period, including the period of the visit.
What is the third requirement for income derived by a non-resident employee to be exempt income?
The services are performed for or on behalf of someone who is not resident in New Zealand.
What is the fourth requirement for income derived by a non-resident employee to be exempt income?
That the amount derived from the personal or professional services is chargeable in the country or territory in which the person is resident with a tax that is substantially the same as that imposed by the ITA.
What does the Commissioner require of non-resident companies with respect to non-resident employees?
That they deduct PAYE from their wages or salary irrespective of whether he or she spends 92 days working in New Zealand, until the employee’s right to relief can be established to the Commissioner’s satisfaction.
What might the Commissioner accept as an alternative to the withholding of PAYE of a non-resident employee, from an employer or PAYE intermediary?
A bond or some other sort of security.
What are (foreign employee) tax equalisation payments designed to reimburse?
The difference between the hypothetical home country tax on the total remuneration from employment and actual income tax payable calculated on home country equivalent remuneration “outside” income and taxable allowances.
Foreign employee tax equalisation payments are designed to reimburse the difference between the _________ home country tax on the total remuneration from employment and actual income tax payable calculated on home country equivalent remuneration “outside” income and taxable allowances.
hypothetical
Foreign employee tax equalisation payments are designed to reimburse the difference between the hypothetical ________ country tax on the total remuneration from employment and actual income tax payable calculated on home country equivalent remuneration “outside” income and taxable allowances.
home
Foreign employee tax equalisation payments are designed to reimburse the difference between the hypothetical home country tax on the ________ remuneration from employment and actual income tax payable calculated on home country equivalent remuneration “outside” income and taxable allowances.
total
Foreign employee tax equalisation payments are designed to reimburse the difference between the hypothetical home country tax on the total __________ from employment and actual income tax payable calculated on home country equivalent remuneration “outside” income and taxable allowances.
remuneration
Foreign employee tax equalisation payments are designed to reimburse the difference between the hypothetical home country tax on the total remuneration from employment and ________ income tax payable calculated on home country equivalent remuneration “outside” income and taxable allowances.
actual
What kind of accounts are most tax equalisation payments to non-resident employees operated through?
Accounts opened for each employee.
How often are most (non-resident employee) instalments of credits (or payments in) to tax equalisation accounts made?
Monthly
How much are the (non-resident employee) installments of credits (or payments in) to tax equalisation accounts?
The hypothetical figure in monthly installments.
What is the name for the final adjustment payment to the tax equalisation accounts of non-resident employees.
Tax equalisation credit
What are the payments out of the tax equalisation accounts of non-resident employees called?
New Zealand tax installments.
When do non-resident employees receive the equalisation payments to which payments relate in their tax equalisation accounts?
The year after the year to which the payments relate.
As the non-resident employees receive the equalisation payments to which payments relate in their tax equalisation accounts in the following year, when do the PAYE obligations with regards to those payments occur?
In the following year.
What case relates to the equalisation payments to non-resident employees from tax equalisation accounts being taxable in the year they were made?
Dow Chemical Overseas Management Co v CIR [1994]
What section of the ITA relates to bonds given by employers with respect to non-resident employees?
Section RD 23
When does section RD 23 of the ITA apply?
When it cannot be reasonably determined at the time an employer or PAYE intermediary is required to withhold the amount of tax for a PAYE income payment, whether the amount will be exempt income under section CW 19 (Amounts derived during a short-term visit) or a double tax agreement.
Section RD 23 applies when it cannot be reasonably determined at the time an employer or ______ is required to withhold the amount of tax for a PAYE income payment, whether the amount will be exempt income under section CW 19 (Amounts derived during a short-term visit) or a double tax agreement.
PAYE intermediary
Section RD 23 applies when it cannot be reasonably determined at the time an employer or PAYE _________ is required to withhold the amount of tax for a PAYE income payment, whether the amount will be exempt income under section CW 19 (Amounts derived during a short-term visit) or a double tax agreement
Intermediaries
Section RD 23 applies when it cannot be reasonably determined at the time an employer or PAYE intermediary is required to withhold the amount of tax for a _______ income payment, whether the amount will be exempt income under section CW 19 (Amounts derived during a short-term visit) or a double tax agreement.
PAYE
Section RD 23 applies when it cannot be reasonably determined at the time an employer or PAYE intermediary is required to withhold the amount of tax for a PAYE income payment, whether the amount will be _______ income under section CW 19 (Amounts derived during a short-term visit) or a double tax agreement.
Exempt
Section RD 23 applies when it cannot be reasonably determined at the time an employer or PAYE intermediary is required to withhold the amount of tax for a PAYE income payment, whether the amount will be exempt income under section _____ (Amounts derived during a short-term visit) or a double tax agreement.
CW 19
Section RD 23 applies when it cannot be reasonably determined at the time an employer or PAYE intermediary is required to withhold the amount of tax for a PAYE income payment, whether the amount will be exempt income under section CW 19 (Amounts derived during a short-term visit) or a ______________.
double tax agreement
What exemption is contained in section CW 19 of the ITA?
The 92-day rule.
