Section EW 32 — Income Tax Act 2007: Consideration for agreement for sale and purchase of property or services, hire purchase agreement, specified option, or finance lease

EW 32 Consideration for agreement for sale and purchase of property or services, hire purchase agreement, specified option, or finance lease When this section applies (1) This section applies when an original party to an agreement for the sale and purchase of property or services, a hire purchase agreement, a specified option, or a finance lease pays or is paid consideration that includes property or services. Value of property or services (2) The value of the property or services is determined by applying subsections (3) to (6) in numerical order until a subsection applies. Lowest price (3) The value of the property or services is the lowest price the parties would have agreed on for the property or services, on the date the agreement, option, or lease was entered into, if payment had been required in full at the time the first right in the property was transferred or the services provided. Two qualifications are— (a) this subsection does not apply to an agreement for the sale and purchase of property or services that is part of another financial arrangement: (b) section EW 34 applies if the consideration is in a foreign currency. Cash price (4) The value of the property or services is the cash price of the property or services to which the agreement, option, or lease relates, as determined by section 5 of the Credit Contracts and Consumer Finance Act 2003, if that Act applies to the agreement, option, or lease. Future or discounted value (5) The value of the property or services is the future value, or the discounted value, or a combination of both the future and discounted values, of the amounts paid or payable on the date on which the first right in the property is transferred or the services are provided, as determined by the Commissioner under a determination under section 90AC(1)(i) of the Tax Administration Act 1994. Determined by Commissioner (6) The value of the property or services is the amount determined by the Commissioner when either party to the arrangement applies to the Commissioner for a specific determination. Both parties must use this amount. Exclusion (7) This section does not apply if the agreement, option, or lease has lapsed or does not proceed. Defined in this Act: agreement for the sale and purchase of property or services , amount , Commissioner , consideration , finance lease , financial arrangement , hire purchase agreement , pay , property , right , specified option , Compare: 2004 No 35 s EW 32