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New Zealand law explained for everyone

Income Tax Act 2007

Income - Income specific to certain entities

CV 1: Group companies

You could also call this:

“How income is treated for companies in the same ownership group”

If you’re part of a company that belongs to a group of companies all owned by the same people, there’s a special rule about money your company gets. Even if the money wouldn’t normally count as income for your company, it might still be treated as income in some cases.

Here’s how it works: Let’s say your company gets some money in a year. Normally, this money wouldn’t be considered income. But if your company is part of a group where all the companies are owned by the same people, you need to think about it differently. You should imagine what would happen if all the companies in your group were actually just one big company. If that imaginary big company would count the money as income, then your company has to treat it as income too.

There’s one exception to this rule. If your company is part of the Kāinga Ora–Homes and Communities group, different rules apply. You can find out more about this exception in section CB 15D.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513087.

Topics:
Money and consumer rights > Taxes
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“Explains that some definitions were removed from the Income Tax Act in 2014”

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CV 2: Consolidated groups: income of company in group, or

“How income is treated for companies in consolidated tax groups”

Part C Income
Income specific to certain entities

CV 1Group companies

  1. An amount that a company derives in an income year and that would not otherwise be income of the company is treated as its income if—

  2. the company is for that income year part of a wholly-owned group of companies; and
    1. had the group of companies been a single company, the amount would have been income of that single company.

      1. Subsection (1) is overridden by section CB 15D (Kāinga Ora–Homes and Communities and wholly-owned group).

      Compare
      Notes
      • Section CV 1(1) heading: inserted (with effect on 1 July 2017), on , by section 134(1) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
      • Section CV 1(2): inserted (with effect on 1 July 2017), on , by section 134(2) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
      • Section CV 1(2): amended (with effect on 1 October 2019), on , by section 190 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).