Income Tax Act 2007

Avoidance and non-market transactions - Market value substituted

GC 11: Applications for matching treatment

You could also call this:

"Asking to use the same income amount as someone else in a transfer pricing arrangement"

When you are involved in a transfer pricing arrangement, a different amount of money may be used instead. This can happen under section GC 7 or GC 8. The other party can ask the Commissioner to use this new amount for them too. The Commissioner will consider this request if it is fair and reasonable. They will think about any changes made under a double tax agreement. They will also think about other important matters. If the Commissioner agrees, the new amount will be used for the other party. This will affect how their income is calculated, but not their dividends. It will also affect how their net attributable CFC income or loss is calculated if they are a controlled foreign company.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517107.

This page was last updated on 29 January 2026 — View changes

Topics:

Money and consumer rights > TaxesBusiness > Industry rules

GC 10: Compensating arrangement: person receiving more than arm’s length amount, or

"Receiving more than fair market value in a related transaction"

GC 12: Effect on person's withholding obligations, or

"What happens to your tax withholding obligations when your tax is adjusted"

Part GAvoidance and non-market transactions
Market value substituted

GC 11Applications for matching treatment

This section applies when—
an arm’s length amount of consideration is substituted under section GC 7 or GC 8 in relation to a transfer pricing arrangement entered into by a person (the taxpayer); and
the other party to the arrangement or, if the other party is a controlled foreign company (CFC), a person with an income interest in the CFC, applies to the Commissioner within 6 months after an assessment is made for the taxpayer which reflects the substitution; and
the Commissioner considers it is fair and reasonable to apply subsection (2), having regard to an adjustment made under a double tax agreement or any other matter; and
the Commissioner has notified the other party.

The substitution applies for the purposes of the application of this Act to the other party—
excluding the determination of the extent to which the other party has derived or been paid a dividend; and
including, when the other party is a CFC, the calculation of net attributable CFC income or net attributable CFC loss in relation to the other party, and the resultant calculation of the attributed CFC income or an attributed CFC loss or attributed CFC net loss of a person.

Compare

2004 No 35 s GD 13(11)

Notes

Section GC 11 heading: amended, on 2 June 2016, by section 47(1) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
Section GC 11(1)(b): amended, on 2 June 2016, by section 47(2) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
Section GC 11(2)(b): substituted (with effect on 30 June 2009), on 6 October 2009, by section 248(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section GC 11 list of defined terms apply: inserted, on 2 June 2016, by section 47(3) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
Section GC 11 list of defined terms branch equivalent income: repealed (with effect on 30 June 2009), on 6 October 2009, by section 248(2)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section GC 11 list of defined terms branch equivalent loss: repealed (with effect on 30 June 2009), on 6 October 2009, by section 248(2)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section GC 11 list of defined terms net attributable CFC income: inserted (with effect on 30 June 2009), on 6 October 2009, by section 248(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section GC 11 list of defined terms net attributable CFC loss: inserted (with effect on 30 June 2009), on 6 October 2009, by section 248(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section GC 11 list of defined terms notify: inserted, on 2 June 2016, by section 47(3) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).