Taxation Flashcards
Term Test 1
Employment Income
Section CE 1 ITA 2007
Salary & Wages Defined
Section RD 5 ITA 2007
- Extra Payment Defined
- Case Law
- Examples of Extra Payments
- Section RD 7 ITA 2007
- Naismith - held extra payment was taxable
- Bonus, Redundancy, Retirement, Loss of employment
- Restrictive Covenants
- Case Law
- Amount Defined
- Section CE 9 as is written in legislation
- Restraint - Henwood
- Section YA 1
- Exit inducement
2. Case Law
- Section CE 10
2. Give up vocation - Fraser
- Expenditure on account of an employee - Private cost or benefit of employee
- Expenditure on account of an employee - Reimbursement
- CE 5(1)
2. Exempt Income - Section CW 17(2)
- Accommodation Defined
- Accommodation Market Value
- Accommodation Allowance Case Law
- Accommodation Relocation
- Section CE 1(2)
- CE 1B(1)
- Case M76
- Exempt Income - CW 17B
- Damages under employment
2. Humiliation - Not taxable
- Section 123(1)(c)(i) Employment Relations Act 2000
2. Section CA 1(2) ITA 2007
- Other benefit in money - Incentive to stay Case Law
2. Other benefit in money - Incentive to come work Case Law
- Golden handcuff - Kerslake
2. Golden hellos - Case U8
- Lease inducement - Case Law Before
2. Lease inducement -New Legislation
- Wattie, before 1 April 2013
2. Section CC 1(1)(B)
- Lease inducement deductibility
2. Lease inducement spread
- Section DB 20B ITA 2007
2. Section EI 4B
- Compensation proceeds general principle Case Law
- Compensation temporary loss of asset (income) Case Law
- Compensation Permanent loss of asset (capital) Case Law
- Duff
- Burmah Steamship or Case V8
- Glenboig Union Fireclay
- Interest
- Dividends
- Pensions
- Annuities
- Rental Income
- Royalties
- CC 4
- CD 1
- CF 1(1)(g)
- CC 5
- CC 1 (2)
- CC 9(1)
Audits
The purpose behind this is to encourage voluntary compliance. Spot checks and projects are conducted to match information to third party records.
Assets Accretion Method
The assets possessed by the taxpayer at the beginning of the period under review is ascertained.
Living costs of the taxpayer assessed over that period.
The increase in assets in subsequent years is obtained and living expenses are added.
Investigation Process
Business matters: Who has the responsibility for the return
Private matters: The taxpayer’s personal circumstances
Areas of concern: Goods for own use, motor vehicle usage between private/business etc.
Penalties: Failure to comply can result in civil penalties, criminal penalties or both
Civil penalty is one imposed by the Commissioner and the most common being late filing penalties, late payment penalties and shortfall penalties.
Income
Section BD 1(1) ITA 2007
Permanent place of abode
Diamond - Added definition to place of abode as meaning a place where a taxpayer habitually resides from time to time even if they spend periods of time overseas.
Q55 - Not determined by personal presence alone
F138 - Place where one usually lives.
U17 - Taxpayer established domestic life for himself in Singapore
Van Uden - Mariner sea worker, significant ties maintained, property available for occupation
Tax Resident - Interpretation guidelines
Interpretation Statement IS 16/03
Double Taxation Agreements (DTAs)
Where there is a DTA between New Zealand and another country, dual residence issues will
be resolved by application of the residence article in the DTA. Where a taxpayer is resident under the domestic laws of New Zealand and the treaty partner, dual residence is avoided for the purposes of the DTA by applying a series of ‘ tie-breaker’ tests to allocate residence to one of the countries.
Transitional Residency
Section HR 8(1) to (7) ITA 2007
- Companies Residency
2. Case Law
- Section YD 2 ITA 2007
2. Vinelight
- Source of Income
2. Case Law
- Sections YD 4 (2) (3) (9) (10) (14) (15) (18) ITA 2007
2. Philips & Case E46
