EX 46, EX 46, EX 47, EX 46, EX 47,

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Income Tax Act 2007

Timing and quantifying rules - Controlled foreign company and foreign investment fund rules - Calculation of FIF income or loss

EX 48: Default calculation method

You could also call this:

“What happens if you don't choose a way to work out your overseas investment income.”

When you do not choose a way to calculate FIF income or loss from an attributing interest for a period, and sections EX 46, EX 47, EX 47B, and EX 62 do not say which method to use, this section applies. You are treated as having chosen a method to calculate FIF income or loss. You use the fair dividend rate method if it is practical, or the cost method if it is not practical.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515563.

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"The accounting profits method is no longer allowed for calculating FIF income or loss"

Part E Timing and quantifying rules
Controlled foreign company and foreign investment fund rules: Calculation of FIF income or loss

EX 48Default calculation method

  1. This section applies when—

  2. a person does not choose a calculation method to calculate FIF income or loss from an attributing interest for a period; and
    1. sections EX 46, EX 47, EX 47B, and EX 62 do not have the effect of requiring a particular calculation method to be used.

      1. The person is treated as having chosen to use, for the period,—

      2. the fair dividend rate method if it is practical to use it; and
        1. the cost method if it is not practical to use the fair dividend rate method.

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          Notes
          • Section EX 48(1)(b): amended (with effect on 1 July 2018), on , by section 53(1) (and see section 53(2) for application) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
          • Section EX 48(2) heading: replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 33(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
          • Section EX 48(2): replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 33(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
          • Section EX 48 list of defined terms accounting profits method: repealed (with effect on 1 July 2011), on , by section 33(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
          • Section EX 48 list of defined terms comparative value method: repealed (with effect on 1 July 2011), on , by section 33(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
          • Section EX 48 list of defined terms deemed rate of return method: repealed (with effect on 1 July 2011), on , by section 33(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).