Neutrality Efficiency* Certainty and Effectiveness and Fiscal impact simplicity fairness* Compliance costs* Administration costs Option 1: agreed No change - Decreased - costs incurred No change - Increased - No change - methods No change - alternative methods in agreeing methods. incurred in agreeing calculation of tax required to have regard agreed methods methods are not expected to methods. liability expected to to the outcomes under are not expected disturb the Minimal cost of be easier as the the apportionment and to alter the substantive amount maintaining a method. Minimal cost of agreed method can be adjustment rules, to amount of of tax payable. maintaining a method. tailored to the ensure quantity and deduction that Lower cost incurred in specific difficulties. timing of tax is fair and can be claimed. applying a method to Expected lower costs of reasonable. calculate deductions. ensuring compliance. objective Meets objective Meets objective objective Meets objective Option 2: agreed - costs incurred - methods - No change Decreased - No change - Increased - No change No change alternative methods in agreeing methods. incurred in agreeing calculation of tax required to have regard agreed methods methods are not expected to methods. liability expected to to the outcomes under are not expected (including disturb the Minimal cost of be easier as the the apportionment and to alter the industry methods) substantive amount maintaining a method. Minimal cost of agreed method can be adjustment rules, to amount of of tax payable. maintaining a method. tailored to the ensure quantity and deduction that Lower cost incurred in specific difficulties, timing of tax is fair and can be claimed. applying a method to Expected lower costs of across a broader reasonable. calculate deductions. ensuring compliance. group. Meets objective Meets objective Meets objective Meets objective Meets objective Option 3: Status No change - existing No change - high No change - IRD will No change - No change - existing No change - apportionment rules compliance costs continue to monitor calculation of liability apportionment and existing rules quo determine amount of experienced in applying taxpayers’ compliance may be difficult and adjustment ensure would continue deductions. rules. with the rules. complex. correct tax paid at the to apply to correct time. determine the deduction that can be claimed. objective Does not meet objective Meets objective Does not meet Meets objective objective * = Key objective
Neutrality Efficiency* Certainty and simplicity Effectiveness and fairness* Fiscal impact Compliance costs* Administration costs Option 1: agreed methods No change - alternative methods are not expected to disturb the substantive amount of tax payable. Decreased - costs incurred in agreeing methods. Minimal cost of maintaining a method. Lower cost incurred in applying a method to calculate deductions. No change - incurred in agreeing methods. Minimal cost of maintaining a method. Expected lower costs of ensuring compliance. Increased - calculation of tax liability expected to be easier as the agreed method can be tailored to the specific difficulties. No change - methods required to have regard to the outcomes under the apportionment and adjustment rules, to ensure quantity and timing of tax is fair and reasonable. No change - agreed methods are not expected to alter the amount of deduction that can be claimed. objective Meets objective Meets objective objective Meets objective Option 2: agreed methods (including industry methods) No change - alternative methods are not expected to disturb the substantive amount of tax payable. Decreased - costs incurred in agreeing methods. Minimal cost of maintaining a method. Lower cost incurred in applying a method to calculate deductions. No change - incurred in agreeing methods. Minimal cost of maintaining a method. Expected lower costs of ensuring compliance. Increased - calculation of tax liability expected to be easier as the agreed method can be tailored to the specific difficulties, across a broader group. No change - methods required to have regard to the outcomes under the apportionment and adjustment rules, to ensure quantity and timing of tax is fair and reasonable. No change - agreed methods are not expected to alter the amount of deduction that can be claimed. Meets objective Meets objective Meets objective Meets objective Meets objective Option 3: Status quo No change - existing apportionment rules determine amount of deductions. No change - high compliance costs experienced in applying rules. No change - IRD will continue to monitor taxpayers’ compliance with the rules. No change - calculation of liability may be difficult and complex. No change - existing apportionment and adjustment ensure correct tax paid at the correct time. No change - existing rules would continue to apply to determine the deduction that can be claimed. objective Does not meet objective Meets objective Does not meet objective Meets objective * = Key objective
2016-ris-archcrm-bill-04.docx