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Technical tax area Ngā tūmomo whakataunga me ngā aratohu

Download interpretation guidelines and interpretation statements

  • Interpretation guidelines discuss the Commissioner's approach to the interpretation of a general area of law where there are also taxation implications. For example, IG009: Employee or independent contractor? assists taxpayers to determine their employment status for tax purposes.
     
  • Interpretation statements set out the Commissioner's view of the taxation laws in relation to a particular set of circumstances in cases when a binding public ruling cannot be issued or is considered to be inappropriate.

The table below lists interpretation guidelines and interpretation statements issued in 2017, other interpretations are sorted by the year in which they were issued.


IS 19/04 - Income tax - distributions from foreign trusts

This interpretation statement discusses the tax treatment of amounts of money and property received by NZ residents from overseas, including by inheritance, that are potentially distributions from trusts. The tax laws are relatively complex when it comes to taxing distributions from trusts and with the advent of global information exchange between revenue authorities, Inland Revenue has increasing access to information about distributions from offshore to NZ residents. The statement will be especially useful for the significant number of migrants to NZ and the many New Zealanders with relatives overseas. The statement covers how to determine if the amounts actually come from a trust (especially when another country has no law of trusts, or the law is different to NZ), whether anything is beneficiary income or a taxable distribution from a foreign trust and when and how the ordering rules in s HC 16 might mean they are treated as taxable distributions when they might not otherwise appear to be. It also considers the law of administration of deceased estates to help determine at what point a trust might arise to make distributions taxable.

Date of issue: 19 December 2019

IS 19/04 - PDF format (406kb | 48 pages)


IS 19/03 - Income tax - exempt income of non-resident entertainers

Where a non-resident entertainer or sportsperson carries out an activity or performance in New Zealand, the income that they earn from that activity or performance will usually be subject to tax in New Zealand. However, in certain circumstances, s CW 20 of the Income Tax Act 2007 provides non-resident entertainers and sportspersons with an exemption. This statement considers s CW 20, and the circumstances in which the exemption will apply. This statement is primarily intended to assist those who are paying non-resident entertainers to decide whether the exemption in s CW 20 applies so that payers do not need to withhold tax from payments made. However, it may also be of assistance to non-resident entertainers who are unsure about whether their income is exempt.

Date of issue: 14 June 2019

IS 19/03 - PDF format (378kb | 22 pages)


IS 19/02 - Income tax - attribution rule for income from personal services

This item makes minor amendments to and replaces IS 18/03 Income Tax – Attribution Rule for Income from Personal Services. The updated item clarifies what income is included in the various threshold tests, and that the $70,000 threshold test includes all sources of the working person’s income (not only personal services income). An example is included to show how this works. Other minor clarifications relate to the associated entity’s income being from the provision of personal services, and also in respect of the relevant depreciable property.

Date of issue: 17 April 2019

IS 19/02 - PDF format (317kb | 24 pages)


IS 19/01 - Income tax – application of schedular payment rules to non-resident directors' fees

IS 19/01 considers when tax must be withheld from directors’ fees paid to non-residents, and discusses when directors’ fees paid to non-residents are considered to have a New Zealand source. It then considers when and how much tax must be withheld and paid to the Commissioner, if withholding is required. The statement has a related operation position – see 'operational positions' in the left-hand menu.

Date of issue: 28 February 2019

IS 19/01 - PDF format (585kb | 29 pages)