Institute of Certified NZ Bookkeepers

ICNZB have been supporting CAANZ for an exemption for certain types of tax transfers from being caught in the AML regime. The exemption is with the Parliamentary Counsel Office for drafting of the legislative instrument.

In a positive development, the DIA, as AML supervisor for the accounting sector, has provided an undertaking that it will not take any enforcement action for non-compliance with the AML / CFT Act 2009 against a tax agent for tax transfers carried out in good faith, for the types of tax transfer that are included in the proposed exemption. We expect this applies to registered bookkeepers also and are getting confirmation from the DIA.

The list of the tax transfers that are included in proposed exemption are

  • Transfers of excess tax within a taxpayer's accounts - section 173L Tax Administration Act 1994 (TAA)
  • Transfers to a company in the same group of companies - section 173M(2)(a) TAA where there is 50% or more commonality of shareholding of commonly owned groups of companies
  • Transfers between shareholder-employees and companies  - section173M(2)(b) and (c) TAA
  • Transfers between partners in the same partnership - section 173M(2)(d) TAA
  • Transfers to relatives as defined for the purposes of section 173M(2)(e) TAA
  • Transfers from a beneficiary to a trustee of the family trust – section 173M(2)(f) TAA
  • Transfers from trustee of family trust to beneficiary - section 173M(3) TAA
  • Transfers from the taxpayer to a tax pooling intermediary - section 173M(2)(fb) TAA
  • Transfers from a company to a shareholder (not being a trust) with at least 25% of the shareholding, and vice versa
  • Transfer from a trustee to a beneficiary where they are the same person but acting in different capacities
  • Transfers from a trust to a company in which the trust has a 100% shareholding and vice versa, or the trust has a majority shareholding with any other shares in the company being held by a shareholder-employee of the company, as that term is defined in section YA 1 of the Income Tax Act 2007, and vice versa
  • Transfers between family trusts where settlors are relatives
  • Transfers from a fund manager to a fund (restricted to fund managers who are licensed under the Financial Markets Conduct Act 2013)
  • Transfers from an agent to a non-resident foreign insurer.

Note: The exemption is in draft and needs to be finalised by the Parliamentary Counsel Office and approved by the Associate Minister of Justice.  While we do not expect the scope or substance of the exemption to change, we cannot guarantee that. 

  • 22 March 2022