International Tax Flashcards
What may New Zealanders do with respect to certain overseas income tax?
New Zealanders may return it in the income year in which the overseas balance date falls due.
What section of the ITA governs returning overseas income in the year it falls due?
EG 1
Under section EG 1, when income is under the threshold and an election is made, income is treated as being within the overseas year not the New Zealand year. The date on which the foreign income is derived is ____________.
Ignored
What is the rule is section EG 1 known as?
The recognition rule.
The threshold for the recognition rule under section EG 1 is what?
$100,000
The concession in the recognition rule is not available to what?
• Foreign sourced income under the financial arrangement rules;
• Dividends attributed to CFCs;
• FIF income;
• __________________
Income derived from an attributing interest.
The concession in the recognition rule is not available to what?
• Foreign sourced income under the financial arrangement rules;
• Dividends attributed to CFCs;
• _____________
• Income derived from an attributing interest.
FIF income
The concession in the recognition rule is not available to what?
• Foreign sourced income under the financial arrangement rules;
• ____________________
• FIF income;
• Income derived from an attributing interest.
Dividends attributed to CFCs;
The concession in the recognition rule is not available to what?
• _________________________________
• Dividends attributed to CFCs
• FIF income;
• Income derived from an attributing interest.
Foreign sourced income under the financial arrangement rules.
In what circumstances may financial arrangement income be permitted under a section EG 1 election?
When the Commissioner notified the person that the election applies.
When the end of a financial year is a later date than the person’s New Zealand balance date, overseas income or the transitional is _________________ so that only ______ months overseas income is returned in the year of changeover.
Ignored 12
Ms YZ’s New Zealand balance date is 31 March. She received Australian income up to and including 2012. Australian income was calculated to 31 March, ie it was apportioned for the purposes of the annual return of income.
In February 2013, Ms YZ decides to change the way in which her Australian income is returned and elects to apply the option under section EG 1 of the ITA. How is the election notified?
By Ms YZ filing her annual return.
Ms YZ’s New Zealand balance date is 31 March. She received Australian income up to and including 2012. Australian income was calculated to 31 March, ie it was apportioned for the purposes of th annual return of income.
In February 2013, Ms YZ decides to change the way in which her Australian income is returned and elects to apply the option under section EG 1 of the ITA. The election is notified by filing her annual return. In consequence, Australian income for the Australian year ending 30 June 2012 is returned when?
In the 2012/ 13 income year.
Does section EG 1 of the ITA permit a taxpayer to take foreign income back to an earlier New Zealand income year?
No
Ms YZ could not elect to return the foreign income for the Australian year ending 30 June 2012 in the New Zealand income year ending when?
31 March 2012
The wording of section EG 1 clearly contemplates a ____________ election. Therefore, the allocation of foreign income which would otherwise be apportioned in the absence of a section EG 1 election and which would fall into the person’s previous year’s income year, can only be allocated to the following income year.
prospective
