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FE 30: Ownership interests in companies outside New Zealand group
or “Rules for including foreign companies in a New Zealand group for tax purposes”
You could also call this:

“How to determine your worldwide group if you're a company with high debt but not overseas”

For a year when you earn money, if you’re a company with too much debt but not a company that has too much debt overseas, your worldwide group includes:

You and your New Zealand group for that year.

Your worldwide GAAP group, which includes all non-New Zealanders that must be in your combined financial reports. You can choose which accounting rules to use for this.

Your ultimate non-resident parent, which is a company that owns at least half of you, isn’t excluded from your worldwide group under section FE 32, and no other company owns half of both you and this parent company.

The ultimate non-resident parent’s worldwide GAAP group, which includes the parent and any non-New Zealanders that must be in their combined financial reports.

Any non-New Zealander who isn’t a company but owns at least half of you, and anyone connected to them.

When figuring out who owns what, you need to look at sections FE 38 to FE 41.

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Next up: FE 31B: Worldwide group for excess debt outbound companies

or “Defining the global financial group for companies with high overseas debt”
Next

Part F Recharacterisation of certain transactions
Interest apportionment on thin capitalisation: Worldwide group

FE 31Worldwide group for corporate excess debt entity if not excess debt outbound company

  1. For an income year, for an excess debt entity that is a company and is not an excess debt outbound company, a worldwide group is made up of—

  2. the entity; and
    1. the entity’s New Zealand group for the income year; and
      1. the entity’s worldwide GAAP group, as described in subsection (2); and
        1. the entity’s ultimate non-resident parent, as described in subsection (3); and
          1. the ultimate non-resident parent’s worldwide GAAP group, as described in subsection (4); and
            1. any non-resident that—
              1. is not a company; and
                1. has ownership interests in the entity of 50% or more; and
                2. any person associated with the non-resident referred to in paragraph (f).

                  1. An excess debt entity’s worldwide GAAP group is made up of all non-residents who are required to be included with the entity in the consolidated financial statements under, as the entity chooses,—

                  2. generally accepted accounting practice; or
                    1. an equivalent standard for consistent and non-distorting financial reporting that is—
                      1. set in the country where the ultimate non-resident parent of the parent, as described in subsection (3), resides; or
                        1. applied when preparing the consolidated financial statements of the international group of which the entity is part.

                        2. An excess debt entity’s ultimate non-resident parent is the company that meets the following requirements:

                        3. the company has ownership interests in the entity of 50% or more; and
                          1. the company is not excluded from the entity’s worldwide group under section FE 32; and
                            1. no other company has both—
                              1. an ownership interest in the entity of 50% or more:
                                1. an ownership interest in the company referred to in paragraphs (a) and (b).

                                2. The ultimate non-resident parent’s worldwide GAAP group is made up of—

                                3. the ultimate non-resident parent; and
                                  1. any non-resident who is required to be included with the ultimate non-resident parent in consolidated group accounts under, as the non-resident parent chooses,—
                                    1. the standard referred to in subsection (2)(b)(i), if applicable; or
                                      1. generally accepted accounting practice.

                                      2. In subsection (3), ownership interests are determined under sections FE 38 to FE 41.

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                                      Notes
                                      • Section FE 31 heading: substituted (with effect on 30 June 2009), on , by section 224(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                      • Section FE 31(1): amended (with effect on 30 June 2009), on , by section 224(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                      • Section FE 31(1)(a): substituted (with effect on 30 June 2009), on , by section 224(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                      • Section FE 31 list of defined terms excess debt outbound company: inserted (with effect on 30 June 2009), on , by section 224(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                      • Section FE 31 list of defined terms ownership interest: inserted, on , by section 116(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).