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Income Tax Amendment Act 2015

COOK ISLANDS

INCOME TAX AMENDMENT ACT 2015

No. 4

Examine and certify by:

Clerk of the Parliament

In the name and on behalf of Her Majesty Queen Elizabeth the Second I hereby assent to this Act this 22^nd day of June, 2015

Queen's Representative

Contents

1 Title
2 Commencement
3 Principal Act amended
4 Section 2 amended
5 Section 42 amended
6 Section 44 amended
7 Section 83 amended
8 Section 98 amended
9 Section 100 amended
10 Section 104 amended
11 Section 112 amended
12 Section 188 amended
13 Section 190 amended
14 Schedule 1 amended
15 New Schedule 2A substituted

Schedule

New Schedule 2A substituted

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An Act to amend the Income Tax 1997

The Parliament of the Cook Islands enacts as follows-

1 Title

This Act is the Income Tax Amendment Act 2015.

2 Commencement

(1) Sections 8 to 11, 14 and 15 of this Act come into force on 1 January 2016.

(2) This rest of this Act comes into force on the day it receives the Queen's Representative's assent.

3 Principal Act amended

This Act amends the Income Tax Act 1997.

4 Section 2 amended

Section 2 is amended by inserting the following definition in its appropriate alphabetical order:

"Cook Islands trust means any trust that is established and administered in the Cook Islands and that is subject to income tax under this Act".

5 Section 42 amended

(1) Section 42(1)(g) is amended by inserting after "charitable trusts" the words "or derived by beneficiaries of such a trust".

(2) Section 42(1) is amended by inserting the following paragraph after paragraph (h):

"(ha) income derived by a person as a beneficiary of a Cook Islands trust;".

6 Section 44 amended

Section 44(2)(b) is repealed.

7 Section 83 amended

Section 83(1) is amended by inserting the following paragraph after paragraph (i):

"(ia) income derived by a trustee of a Cook Islands trust;".

8 Section 98 amended

Section 98 is amended by repealing the definition of withholding income and substituting the following definition:

"withholding income—

(a) means interest, dividends, natural resource amounts, or royalties that are derived from the Cook Islands and paid to a person who is not resident in the Cook Islands; and

(b) includes interest payments paid by a banking company to a person who is resident in the Cook Islands and has not provided the banking company with the person's taxpayer identification number (RMD number); but

(c) does not include any income exempt from income tax under this Act."

9 Section 100 amended

(1) Section 100 is amended by repealing subsection (5) and substituting the following subsection:

"(5) Despite subsection (1), the amount of withholding tax is 30% if the withholding income is interest paid by a banking company to a person who is resident in the Cook Islands and has not provided the banking company with the person's taxpayer identification number (RMD number)."

(2) Section 100 is amended by adding the following subsection:

"(6) Subsection (4) does not apply to withholding tax imposed in accordance with subsection (5)."

10 Section 104 amended

(1) Section 104 is amended by adding the following subsections as subsections (2) to (5):

"(2) A banking company that in a year pays interest on an account that is not liable to withholding tax in accordance with section 100 must, on or before 15 February of the following year, issue the recipient with an interest earnings certificate stating—

(a) the amount of interest paid; and

(b) the income year to which the amount relates.

"(3) A banking company must, on or before 15 February of each year, provide the Revenue Management Division with the following information in respect of each customer to whom the banking company paid interest on an account in the previous year that was not liable to withholding tax in accordance with section 100-

"(a) the amount of interest paid;

"(b) the income year to which the amount relates; and

"(c) the customer's details, including the customer's name and the customer's taxpayer identification number (RMD number).

"(4) The information referred to in subsection (3) must be provided in a form approved by the Collector.

"(5) Subsections (2) to (4) apply to interest paid on or after 1 January 2015."

11 Section 112 amended

(1) Section 112(1)(b) is amended by omitting "." after the word "Collector" and substituting "; or".

(2) Section 112(1) is amended by adding the following paragraphs:

"(a) being a banking company, fails wholly or in part to issue the recipient with an interest earnings certificate in accordance with section 104(2) and (5); or

"(b) being a banking company, fails wholly or in part to provide the Revenue Management Division with information in accordance with sections 104(3) to (5)."

12 Section 188 amended

Section 188 is amended by adding the following subsections:

"(3) This subsection applies if—

(a) a notice of assessment has been issued in respect of any year; and

(b) the Collector subsequently issues an amended notice of assessment (the amended notice); and

(c) there is a delay in issuing the amended notice that, in the Collector's opinion, is due any neglect, default or omission of the taxpayer.

"(4) If subsection (3) applies,—

"(a) the Collector must, when issuing the amended notice, fix a date on which the tax payable under the amended notice, including any increase, is due and payable; and

"(b) the date fixed may be a date before the amended notice is issued."

13 Section 190 amended

Section 190 is amended by repealing subsection (3) and substituting the following subsection:

"(3) In any case in which the Collector fixes a new date for the payment of tax under section 188(2) or (4), the date fixed by the Collector is deemed to be the due date for payment of that tax, including any increase, for the purposes of subsection (1)."

14 Schedule 1 amended

The first item in the second column of the table in clause 3 of Schedule 1 is amended by omitting "18.5 cents" and substituting "17.5 cents".

15 New Schedule 2A substituted

Schedule 2A is repealed and the Schedule 2A set out in the Schedule of this Act is substituted.

_________________

s 15

Schedule

New Schedule 2A substituted

PAYE schedule from 1 January 2016

PacLII Editor's Note: Please see/download the PDF original for the table in the Schedule referred to in section 15.

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This Act is administered by the Revenue Management Division of the Ministry of Finance and Economic Management