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Income Tax Bill Income Tax Part Y cl YA 1 Part Y De®nitions and related matters Subpart YAÐGeneral de®nitions Contents YA 1 De®nitions 5 YA 2 Meaning of income tax YA 3 Treatment of attributing company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax YA 1 De®nitions 10 For the purposes of this Act, unless the context otherwise requires,Ð 1973 version provisions is de®ned in section YB 20 (Some de®nitions) for the purposes of sections YB 1 to YB 19 (which relate to associated persons) 15 1988 version provisions is de®ned in section YB 20 (Some de®nitions) for the purposes of sections YB 1 to YB 19 (which relate to associated persons) 1990 version provisions is de®ned in section YB 20 (Some de®nitions) for the purposes of sections YB 1 to YB 19 (which 20 relate to associated persons) absenteeÐ (a) means a person other than a person who is resident in New Zealand during any part of the tax year: (b) is de®ned in section HD 18 (Agency in relation to absen- 25 tees generally) for the purposes of subpart HD (Agents) absolute value means the value irrespective of whether the value's sign is positive or negative ACC levy or premium is de®ned in section EF 3(5) (ACC levies and premiums) for the purposes of that section 30 acceptable property is de®ned in section GB 45 (Arrangements involving money not at risk) for the purposes of that section accident compensation earnings-related payment means a payment included in salary or wages of the following kinds and under the following Acts: 35 (a) under the Accident Compensation Act 1982, a payment of earnings related compensation, as de®ned in section 2109 Part Y cl YA 1 Income Tax 2, and of compensation under section 80(4), that are not payments of account made under section 88 in circum- stances in which, at the time the payments are made, the nature of the compensation has not been determined: (b) under the Accident Rehabilitation and Compensation 5 Insurance Act 1992,Ð (i) a vocational rehabilitation allowance payable under section 25; and (ii) a payment of compensation for loss of earnings payable under any of sections 38, 39, and 43; and 10 (iii) a payment of compensation for loss of potential earning capacity payable under section 45 or 46; and (iv) a payment of weekly compensation payable under any of sections 58, 59, and 60; and 15 (v) a payment of continued compensation payable under section 138: (c) under the Accident Insurance Act 1998,Ð (i) a payment or weekly compensation made by an insurer, as de®ned in that Act: 20 (ii) a payment of compensation for loss of earnings, or loss of potential earning capacity in relation to a work-related personal injury, as de®ned in that Act, made by an insurer under a policy of per- sonal accident or sickness insurance to which 25 section 188(1)(a) (as it read immediately before its repeal by section 7 of the Accident Insurance Amendment Act 2000) applies: (d) under the Injury Prevention, Rehabilitation, and Com- pensation Act 2001, a payment of weekly compensation 30 made by the Corporation, as de®ned in that Act accident compensation payment is de®ned in section CF 1(2) (Bene®ts, pensions, compensation, and government grants) for the purposes of that section accident compensation payment for attendant care is 35 de®ned in section LB 6(3) (Tax credits for caregivers) for the purposes of that section accident insurance contract is de®ned in section CW 33(2) (Compensation payments) for the purposes of that section account advantageÐ 40 2110 Income Tax Part Y cl YA 1 (a) is de®ned in section GB 36(5) (Reconstruction of imputa- tion arrangements to obtain tax advantage) for the pur- poses of that section: (b) is de®ned in section GB 43(5) (Reconstruction of Maori authority credit arrangements to obtain tax advantage) 5 for the purposes of that section accounting period, for a foreign company, meansÐ (a) its accounting year; or (b) the relevant period of other than 12 months, if a per- son's attributed CFC income or loss or FIF income or 10 loss from the foreign company is allowed or required to be calculated on the basis of a period other than 12 months because of a change of residence of the foreign company accounting pro®ts method means the method of calculating 15 FIF income or FIF loss in section EX 42 (Accounting pro®ts method) accounting year,Ð (a) for any person, means a tax year or another 12 month period that ends with the date of the annual balance of 20 the person's accounts: (b) for a company, includesÐ (i) a period, shorter than 12 months, that is the period for which accounts are prepared, including under the international tax rules, because of the 25 formation of the company or the termination of the company's existence; and (ii) a period, shorter or longer than 12 months, that is the period for which accounts are prepared, including under the international tax rules, 30 because of the company or a person under section EX 26 (Change of CFC's balance date) or EX 56 (Change of FIF's balance date) adopting a new accounting balance date accrual accounting method is de®ned in section EG 2(4) 35 (Adjustment for changes to accounting practice) for the pur- poses of that section accrued entitlement, for a party to a ®nancial arrangement at any time, means the party's rights under the arrangement at the time 40 2111 Part Y cl YA 1 Income Tax accrued obligation, for a party to a ®nancial arrangement at any time, means the party's obligations under the arrangement at the time acquire, for depreciable property, includes make acquisition is de®ned in section GC 14 (De®nitions for sections 5 GC 6 to GC 13) for the purposes of sections GC 6 to GC 13 (which relate to transfer pricing arrangements) acquisition price is de®ned in section EZ 48 (De®nitions) for the purposes of the old ®nancial arrangements rules active service area is de®ned in section CW 24(2) (Deferred 10 military pay for active service) for the purposes of that section actuarial reserves is de®ned in section EY 3 (Meaning of actua- rial reserves) actuary means a person who isÐ (a) a Fellow of the New Zealand Society of Actuaries; or 15 (b) a Fellow of the Institute of Actuaries of Australia; or (c) a Fellow of the Institute of Actuaries (of London); or (d) the holder of an equivalent professional quali®cation approved by the Commissioner for the purposes of this de®nition 20 additional transport costs is de®ned in section CW 18(3) (Allowance for additional transport costs) for the purposes of that section adjusted tax valueÐ (a) is de®ned in sections EE 56 to EE 61 (which relate to 25 depreciation): (b) for software acquired before 1 April 1993, is de®ned in section EZ 21 (Adjusted tax value for software acquired before 1 April 1993): (c) in section FO 16 (Amortising property), is de®ned in 30 paragraphs (a) and (b) and sections EE 21 to EE 24 (which relate to depreciation) adverse event deposit is de®ned in section EH 62 (Other de®nitions) adverse event income equalisation account is de®ned in 35 section EH 62 (Other de®nitions) adverse event income equalisation scheme means the scheme referred to in section EH 1(2)(b) (Income equalisation schemes) 2112 Income Tax Part Y cl YA 1 adverse event maximum deposit is de®ned in section EH 61 (Meaning of adverse event maximum deposit) affected associate is de®ned in section GB 48 (De®ned terms for sections GB 45 and GB 46) for the purposes of sections GB 45 and GB 46 (which relate to arrangements involving money 5 not at risk) after-income tax earnings means the after-tax net accounting pro®ts of a company for an accounting year, including extraordinary items and having regard to accounting provi- sions for tax but not statutory liabilities for tax, and dealt with 10 in 1 of the following paragraphs: (a) after-tax net accounting pro®ts calculated under gener- ally accepted accounting practice and detailed in ®nan- cial statements, audited by a chartered accountant (or an accountant of an equivalent professional standard in the 15 country or territory in which the company is resident),Ð (i) on which the accountant has given a standard audit opinion, without quali®cations; or (ii) on which the accountant has given a standard 20 audit opinion containing quali®cations, but only relating to accounting treatments that, in the opinion of the Commissioner, do not materially affect the calculation of amounts of underlying foreign tax credit; or 25 (iii) adjusted, in a manner satisfactory to the Commis- sioner, to eliminate any material effects of accounting treatments about which the account- ant has quali®ed a standard audit opinion; or (b) if there are no ®nancial statements as described in para- 30 graph (a), after-tax net accounting pro®ts calculated under the generally accepted accounting practice (or an equivalent standard for the reporting of net pro®ts in a consistent and non-distorting manner) of the country or territory in which the company is resident and detailed 35 in ®nancial statements, audited by a chartered account- ant (or an accountant of an equivalent professional stan- dard in the country or territory in which the company is resident),Ð (i) on which the accountant has given a standard 40 audit opinion, without quali®cations, to the effect 2113 Part Y cl YA 1 Income Tax that the ®nancial statements represent the income and ®nancial position of the company to the degree of validity normally required in the coun- try or territory in which the company is resident; or 5 (ii) on which the accountant has given a standard audit opinion containing quali®cations, but only relating to accounting treatments that, in
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