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Telecommunications Act 2001

Structural separation of Telecom - Taxation consequences of structural separation

69XX: Leased assets

You could also call this:

"Tax rules for telecom companies that lease things"

Illustration for Telecommunications Act 2001

When a Telecom company leases something, like a building, you need to think about tax. The Telecom company and another company, called Chorus, must work out some tax amounts. They do this using rules from the Income Tax Act 2007, especially section EJ 10. You calculate these amounts as if certain days were the start or end of a tax year. The rules apply to the Chorus company for tax years after a certain date, as if the two companies were the same.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4187744.

Topics:
Money and consumer rights > TaxesBusiness > Industry rules
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69XW: Revenue account property, or

"What happens to a Telecom company's property when it splits into different parts?"

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69XY: Finance leases: financial arrangements rules, or

"Rules about renting things for a long time and how it affects tax"

Part 2AStructural separation of Telecom
Taxation consequences of structural separation

69XXLeased assets

  1. For the purposes of the Income Tax Act 2007, for expenditure that a Telecom company incurs as a lessee under a lease that relates to a designated asset and to which section EJ 10 of the Income Tax Act 2007 applies,—

  2. the Telecom company must calculate an amount to be allocated to the vesting year under section EJ 10(3) and (4) of that Act as if the day before the appointed day were the end of the vesting year:
    1. the relevant Chorus company must calculate an amount to be allocated to the vesting year under section EJ 10(3) and (4) of that Act as if the appointed day were the start of the vesting year:
      1. section EJ 10 of that Act applies to the Chorus company for income years after the vesting year as if, in respect of the period up to and including the appointed day, the Telecom company and the Chorus company were the same person.

        Notes
        • Section 69XX: 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).