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Income Tax (Amendment) (No 2) Act 1987

COOK ISLANDS

INCOME TAX AMENDMENT ACT (No 2) 1987

ANALYSIS

Title

1. Short Title
2. Application
3. Interpretation
4. Rebate in respect of low income earners
5. Collector to round off assessments and refunds
6. Part VII Interpretation
7. Withholding tax imposed
8. Prescribed currencies
9. Payment of deductions of withholding tax to Collector
10. Withholding tax to be final in certain cases
11. First Schedule
12. Second Schedule
Schedules

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1987, No. 16

An Act to amend the Income Tax Act 1972.

(19 August 1987

BE IT ENACTED by the Parliament of the Cook Islands in Session assembled and by the authority of the same as follows:

1. Short Title - This Act may be cited as the Income Tax Amendment (No. 2) Act 1987 and shall be read together with and deemed part of the Income Tax Act 1972 (hereinafter referred to as "the principal Act").

2. Application - Sections 4, 5, 11 and 12 shall, except where this Act otherwise provides, apply with respect to the tax on income derived in the income year that commenced on the 1st day of January 1987 and every subsequent year.

3. Interpretation - Section 2 of the principal Act is amended by: -

(i) deleting the definition of "Debenture" as inserted by section 2 of the Income Tax Amendment Act 1987 and substituting therefore the following definition:

""Debenture" means any promissory note, debenture stock, bill of exchange, bond and other negotiable instrument;"

(ii) inserting after the definition "Income year" the following definition.

""Interest" includes payments assimilated to interest, and for the purpose of clarity is deemed to include discounts on bills of exchange promissory notes and other negotiable instruments."

4. Rebate in respect of low income earners - Subsections (1) and (2) of section 45A of the principal Act (as inserted by section 4 of the Income Tax Amendment (No. 2) Act 1980) are repealed and the following subsections substituted:

"(1) Where in any income year a taxpayer has an assessable income of $4,000 or less there shall be allowed from the income tax payable a rebate equal to the amount of such income tax.

(2) Where in any income year a taxpayer has an assessable income greater than $4,000 and less than $4,500 there shall be allowed from the income tax payable a rebate of 4200 diminished by 40 cents for each complete dollar of taxable income which exceeds $4,000."

5. Collector to round off assessments and refunds - Not withstanding any other provision of this Act or any other Act, the Collector may, when issuing any assessment or making any refund, round off the amount assessed of refunded as the case may be to the nearest multiple of 5 cents provided that any amount so rounded off pursuant to this section shall in every case be rounded off in favour of the taxpayer.

6. Part VII Interpretation - Section 103 of the principal Act (as amended by section 5 of the Income Tax Amendment Act 1987) is amended by:

(i) deleting the definition of "borrowing";

(ii) adding to the definition of "person" the words "and includes any other person resident in the Cook Islands for the purposes of section 87";

(iii) deleting the definition of "prescribed currency".

7. Withholding tax imposed - Section 105 of the principal Act (as inserted by section 7 of the income Tax Amendment Act 1987) is amended:

(i) by deleting in subsection (1) the words "a borrowing" and substituting therefore the words "debenture issued by any person resident in the Cook Islands and licensed to carry on banking business pursuant to the provisions the Banking Act 1969."

(ii) by deleting from subsection (1) the words "forty-nine percent (49%) and substituting therefor the words "fifty per cent (50%)";

(iii) by inserting in subsection (2) before the words "In every case" the words "subject to subsection (1)".

(iv) by deleting from subsection (2) the words "(other than interest paid in relation to a borrowing)".

8. Prescribed currencies - Section 105A of the principal Act (as inserted by section 8 of the Income Tax Amendment Act 1987) is repealed.

9. Payment of deductions of withholding tax to Collector - Section 108 of the principal Act (as amended by section 9 of the Income Tax Amendment Act 1987) is amended by deleting subsection (4).

10. Withholding tax to be final in certain cases - Section 110 of the principal Act (as amended by section 10 of the Income Tax Amendment Act 1972) is amended by deleting the words "Provided that nothing contained in this section shall effect the operation of section 61."

11. First Schedule - The First Schedule to the principal Act is amended by repealing Part B and substituting the new Part B set out in the First Schedule to this Act.

12. Second Schedule - (1) The Second Schedule to the principal Act is amended by repealing "Appendix A" and substituting the new Appendix A as set out in the Second Schedule to this Act.

(2) This section shall come into force and apply to all payments made on or after the first day of October 1987.

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This Act is administered in the Inland Revenue Department.

FIRST SCHEDULE

PART B

Rates referred to in Clause 5 of Part B

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SECOND SCHEDULE

APPENDIX A

TAX DEDUCTIONS FROM PAYMENTS FOR WEEKLY PAY PERIOD

For the purposes of this Appendix: ND means no declaration.

SECOND SCHEDULE (Continued)

SECOND SCHEDULE – Continued

SECOND SCHEDULE – Continued