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New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Expenditure specific to certain entities

DV 13: Group companies

You could also call this:

“How to claim expenses for money received from companies in your group”

You might be part of a group of companies that are all owned by the same parent company. This is called a wholly-owned group. If your company gets money from another company in the group, you might be able to claim some expenses related to that money.

You can claim these expenses if three things are true:

  1. Your company gets money from another company in the group in a specific tax year.
  2. There’s no other part of the tax law that lets you claim expenses for getting this money.
  3. If all the companies in your group were actually just one big company, that company would be allowed to claim these expenses.

If all of these things are true, you can claim the expenses in the same year you got the money.

This rule adds to the general permission for claiming expenses and overrides the rule about exempt income. However, you still need to follow all the other general rules about claiming expenses.

Link to section CV 1

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514168.

Topics:
Money and consumer rights > Taxes
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Part D Deductions
Expenditure specific to certain entities

DV 13Group companies

  1. This section applies when,—

  2. in an income year, a company (company A) that is part of a wholly-owned group of companies derives income under section CV 1 (Group companies); and
    1. no other provision of this Act allows company A a deduction for the expenditure it incurs in deriving the income; and
      1. if the wholly-owned group of companies were a single company, the single company would be allowed a deduction for the expenditure that company A incurs in deriving the income.

        1. Company A is allowed a deduction for the expenditure in the income year in which the income is derived.

        2. This section supplements the general permission and overrides the exempt income limitation. The other general limitations still apply.

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