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Income Tax Act 2007

Taxation of certain entities - Qualifying companies (QC)

HA 21: Loss balances not carried forward

You could also call this:

“Loss balances from previous years can't be used when a company becomes a qualifying company”

If you own a company that is not a qualifying company and it becomes a qualifying company in a certain income year, you cannot carry forward any loss balance from previous years. This means you can’t use the rules about general tax losses or losses from attributed controlled foreign companies and foreign investment funds to transfer those losses to the current income year or any future income years. The law that covers this is called ‘subparts IA and IQ’, which are parts of the tax rules that normally allow companies to use past losses to reduce their tax in future years. But for your company becoming a qualifying company, these rules don’t apply anymore.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517182.

Topics:
Money and consumer rights > Taxes
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“This rule about assigning tax losses is no longer used”

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HA 22: Group companies using tax losses, or

“How qualifying companies can share tax losses within a group”

Part H Taxation of certain entities
Qualifying companies (QC)

HA 21Loss balances not carried forward

  1. In an income year in which a company that is not a qualifying company becomes a qualifying company, subparts IA (General rules for tax losses) and IQ (Attributed controlled foreign company net losses and foreign investment fund net losses) do not apply to carry forward a loss balance of the company to the income year or to later income years.

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Notes
  • Section HA 21: amended (with effect on 1 April 2008), on , by section 42 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).