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Nz Taxation

In: Business and Management

Submitted By yuca
Words 611
Pages 3
(a)
Section BB 2 lists down the main obligations that a person must meet under the Income Tax Act 2007. It requires a person to calculate and satisfy income tax liability for each tax year (s BB 2(1) and subpart BC), except for non-filing taxpayers (s BB 2(2)). A person is also required to pay provisional tax (s BB 2(3), and the provisional tax rules), withholding liabilities (s BB 2(4) and subpart BE) and others taxes and payments (s BB 2(5) and subpart BF), if they are liable for any of those.

(b)
Terminal tax is defined in s BC 8(3) as the difference to pay after deducting all available tax credits from a person’s income tax liability.

(c)
Section BD 1(5) defines assessable income as a calculated amount of all income a person earned that does not comprise exempt, excluded or non-residents’ foreign sourced income.

(d)
All income and deductions must be allocated to an income year under sections BD 3 and BD 4. The general rules are that the Act requires income to be allocated to the income year in which it is derived (s BD 3(2)) and deduction to be on the basis of when it is incurred (s BD 4(2)), unless other provisions provide for a different allocation. Income is also treated as being derived when it is credited in the account of a person, or dealt with in their interest or on their behalf (s BD 3(4)). Case law needs to be considered for determining the timing of derivation and incurrence (ss BD 3(3) & BD 4(3)).

(e)
Section BB 2(4) imposes the obligation to comply with withholding liabilities, which are PAYE, RWT, NRWT, FBT ESCT and RSCT as specified in s BE 1.

(f)
The double tax agreement will override domestic income tax law as per Section BH 1(4).

(Total word account for Q1 (g) – 141 words)
(g)
The term permanent place of abode is not just to do with where a person lives, but in a wider sense taking into account social,

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