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Telecommunications Act 2001

Structural separation of Telecom - Taxation consequences of structural separation

69XT: Bad debts

You could also call this:

"What happens to unpaid debts when a telecom company changes hands"

Illustration for Telecommunications Act 2001

When a debt is owed to a Telecom company and it is transferred to a Chorus company, you need to consider how this debt is treated for tax purposes. The Income Tax Act 2007 has rules about bad debts, which are debts that will not be paid, and these rules are found in sections CG 3 and DB 31. These rules apply to the Chorus company as if it were the same company as the Telecom company for the period up to the appointed day.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4187736.

Topics:
Money and consumer rights > TaxesBusiness > Industry rules
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69XS: Expenditure or loss incurred, and amounts derived, or

"Working out what a company can claim as expenses or income"

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69XU: Unpaid employment expenditure, or

"Money a company must pay when taking over staff payments from another company"

Part 2AStructural separation of Telecom
Taxation consequences of structural separation

69XTBad debts

  1. Sections CG 3 and DB 31 of the Income Tax Act 2007 apply to a relevant Chorus company in respect of any obligation that is owed to the relevant Telecom company immediately before the appointed day and that vests in the Chorus company, as if the Telecom company and the Chorus company were the same person in respect of the period up to and including the appointed day.

Notes
  • Section 69XT: inserted, on (being the date of separation day, and an Order in Council (SR 2011/302) having been made under section 36), by section 51 of the Telecommunications (TSO, Broadband, and Other Matters) Amendment Act 2011 (2011 No 27).