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HA 8B: No CFC income interests or FIF direct income interests of 10% or more
or “Qualifying companies can't have significant foreign company investments”
You could also call this:

“Qualifying companies have a $10,000 limit on foreign non-dividend income”

If you are a qualifying company, you need to be careful about how much foreign non-dividend income you earn in a year. You can’t earn more than $10,000 of this type of income after taking away either the income from financial arrangements or 10% of your total income for the year, whichever is less.

The Governor-General can make a special order to increase this $10,000 limit. This order can start from the beginning of the income year it’s made in, or it can apply to income you earn after the order is made.

If the Governor-General does make an order to change the limit, it’s considered secondary legislation. This means it has to follow certain rules about how it’s published, which you can find in Part 3 of the Legislation Act 2019.

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Next up: HA 10: Nature of LAQC shares

or “Rules for LAQC shares were removed in 2011”
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Part H Taxation of certain entities
Qualifying companies (QC)

HA 9Limit on foreign non-dividend income

  1. The foreign non-dividend income of a qualifying company in an income year must be no more than $10,000 after subtracting the lesser of—

  2. any income under section CC 3 (Financial arrangements); or
    1. 10% of the gross income of the company for the income year.

      1. The Governor-General may make an Order in Council increasing the sum set out in subsection (1). The order may apply—

      2. from the start of the income year in which it is made; or
        1. to amounts of income derived after the date on which the order is made.

          1. An Order in Council under subsection (2) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

          Compare
          Notes
          • Section HA 9(2): amended (with effect on 1 April 2008), on , by section 253(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
          • Section HA 9(3) heading: inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
          • Section HA 9(3): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).