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Income Tax (Tax Credit for Small Short-term Accommodation Providers) Amendment Act 2020

COOK ISLANDS

Income Tax (Tax Credit for Small Short-term Accommodation Providers) Amendment Act 2020

2020, No. 22

Contents

1 Title
2 Commencement
3 Principal Act
4 New section 186A and cross-heading inserted

An Act to mitigate the economic hardship resulting from measures taken to protect the Cook Islands from COVID-19 (Coronavirus Disease 2019) by providing a tax credit for small short-term accommodation providers for the 2019 income year.

The Parliament of the Cook Islands enacts as follows—

1. Title

This Act is the Income Tax (Tax Credit for Small Short-term Accommodation Providers) Amendment Act 2020.

2. Commencement

This Act comes into force on the day after the date it is assented to by the Queen’s Representative.

3. Principal Act

This Act amends the Income Tax Act 1997 (the principal Act).

4. New section 186A and cross-heading inserted

After section 186, insert:

“Temporary Tax Credit Measures

“186A Tax credit for small short-term accommodation providers

“(1) A small short-term accommodation provider is entitled to a credit against the income tax payable by the provider on the income for the 2019 income year.
“(2) The tax credit applies to the 2019 income year even though the income tax for that year was due for payment on 1 October 2020.
“(3) The credit is limited to the lesser of the following amounts:

• “(a) $2,000:
• “(b) the income tax payable on the income from providing the accommodation.

“(4) If a property is jointly owned, the tax credit must be allocated in proportion to the income returned to each owner from providing the accommodation.
“(5) The tax credit is subject to the following restrictions:

• “(a) it is available only in respect of income tax payable for the 2019 income year:
• “(b) it cannot be transferred to another taxpayer:
• “(c) it is not available as a payment or refund to the taxpayer:
• “(d) any unused portion of the tax credit cannot be claimed in subsequent income years.

“(6) A person claiming the tax credit must complete an application form provided by the Collector of Inland Revenue for the purpose.
“(7) In this section, small short-term accommodation provider means a person who at the end of the 2019 income year provided accommodation that met both of the following criteria:

• “(a) the provider provided accommodation for 10 or fewer people in total, whether in 1 or multiple properties:
• “(b) the accommodation was—
  • “(i) short term accommodation offered at a nightly rate; or
  • “(ii) holiday accommodation.”
    

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

Printed under the authority of the Cook Islands Parliament—2021.