Response.pdf

20 April 2020
J B
[FYI request #12500 email]
Dear J B
Thank  you  for  your  request  made  under  the  Official  Information  Act  1982  (the  OIA),
received on 21 March 2020. You requested the following:
Data covering the period since the introduction of the current Foreign Investment
Fund (FIF) in (I believe) 2008, up until the current day.
A. A table broken down by tax year and by marginal income tax bracket, of:
1. the number of taxpayers who reported FIF income.
2. the number of taxpayers who were assessed by the IRD as having FIF income.
3. the self-assessed value of such income.
4. the value assessed by the IRD of such income.
5. Losses made on the FIF investments (this may have to be figured by comparing
the balance on 1 April of one year to the balance on 1 April of the next year).
6. Losses  made  on  the  FIF  investments  allowed  by  the  IRD  to  be  deducted  for
income tax.
7. Losses made on the FIF investments allowed by the IRD to be carried forward
to subsequent tax years.
B. A table giving the above information, but also broken down by the method of
calculating  FIF  income  (FDR,  CV,  etc).  (As  well  as  by  by  tax  year  and  by
marginal income tax bracket.)
Information to be withheld: Questions A1, A3 to A7 and B
Details of FIF calculations are provided on a form that is not held in a database format by
Inland Revenue. Your request for information relating to questions A1, A3 to A7 (inclusive)
and B is refused under section 18 (f) of the OIA, as the information requested cannot be
made available without substantial manual searching through each individual return.
Information being released: Question A2
There  are  yes/no  questions  on  the  parent  Individual  tax  return  (IR3)  and  Income  tax
return Companies (IR4) which indicate whether or not the more detailed disclosures are
required from the taxpayer. These yes/no questions are accessible in database form, and
are provided in the following tables for the tax years ending 31 March 2008 to 31 March
2018 (inclusive). No data is provided for the tax year ending 31 March 2019 as this is not
finalised yet.
The relevant yes/no questions on the IR3 and IR4 tax returns are:
IR3, question 36: Did you at any time during the income year hold rights in a foreign
company,  unit  trust,  superannuation  scheme  or  life  insurance  policy  for  which
disclosure is required?
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Ref: 20OIA1293
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IR4,  question 34: Has the company calculated CFC or FIF income under Question
18?
IR4, question 18: Did the company receive any income from overseas?

I  note that  both  returns  are  asking for  broader  information than  just  FIF income  to  be
disclosed.  The IR3 question is also asking about unit trusts, superannuation schemes and
life  insurance  policies.    The  IR4  question  includes  investments  in  controlled  foreign
companies (CFCs), which in terms of value is arguably a much larger investment category.
In both cases FIF data cannot be separately isolated, and hence the figures in the following
tables form upper bounds on the volumes.

Table  1  below  shows  the  number  of  individuals  who  have  made  a  foreign  investment
disclosure,  by  year  ending  31  March.  This  information  is  based  on  those  taxpayers  who
answered ‘Yes’ to question 36 on the IR3 return.   The data in Table 1 is based on a sample
of individual taxpayers, and is weighted to provide population estimates.

Table 1: Individuals making a Foreign Investment Disclosure* on IR3 Returns
Year ending 31 March
Count
2008
890
2009
460
2010
780
2011
860
2012
780
2013
1,000
2014
1,000
2015
1,020
2016
790
2017
870
2018
940
*Disclosure  includes  foreign  companies,  unit  trusts,  superannuation  schemes,  and  life
insurance policies.

Table 2 below shows the counts from Table 1 by personal income tax bracket based on the
person’s total taxable income in that year, but using the 2019/20 tax scale to define the
thresholds for the table.

Table 2: Number of Individuals with Foreign Investment Disclosure, by year and
marginal tax bracket

Personal Marginal Income Tax Bracket ($)
Year ending
0
1-14,000
14,001-
48,001-
70,001+
Total
31 March
48,000
70,000
2008
        50
         40            230           90            480
  890
2009
        30
         30            120           50            230
  460
2010
        20
         30            260           60            410
  780
2011
        40
         70            230          170            350
  860
2012
        20
         20            250          140            350
  780
2013
        60
         10            300          110            520
1,000
2014
        40
         10            330           80            540
1,000
2015
        30
         40            270         120            560
1,020
2016
        20
         10            220         100            440
790
2017
10
         40            230          130            460
  870
2018
0
20
240
140
540
940
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Ref: 20OIA1293
IN CONFIDENCE

Table  3  below  shows  the  number  of  companies  who  have  made  a  CFC  or  FIF  foreign
investment disclosure. This information is based on those taxpayers who answered ‘Yes’ to
question 34 on the IR4 return.

Table  3:  Number  of  Companies  Making  a  CFC  or  FIF  Foreign  Investment
Disclosure on IR4 Returns
Year ending 31 March
Count
2008
365
2009
253
2010
254
2011
248
2012
251
2013
244
2014
290
2015
299
2016
300
2017
272
2018
292

Right of Review
If  you  disagree  with  my  decision on your  OIA request,  you  can  ask  an  Inland  Revenue
review  officer  to  review  my  decision.  To  ask  for  an  internal  review,  please  email  the
Commissioner of Inland Revenue at: [email address].

Alternatively, under section 28(3) of the OIA, you have the right to ask the Ombudsman
to investigate and review my decision. You can contact the office of the Ombudsman by
email at: [email address].

Thank you for again your request. I trust that the information provided is of assistance to
you.

Yours sincerely

Sandra Watson
Manager, Forecasting and Analysis

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Ref: 20OIA1293
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