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Income Tax Act 2007

Taxation of certain entities - Qualifying companies (QC)

HA 30: When elections take effect

You could also call this:

“Choosing when your company becomes a qualifying company”

When you choose to make your company a qualifying company, you need to tell the government about it. This is called making an election. Here’s how it works:

You can pick which year you want your election to start. If you don’t choose a specific year, it will start in the year after you tell the government.

If you’re already a shareholder in a qualifying company and you want to make an election, it starts as soon as the government gets your message.

If your company is brand new and hasn’t had to do a tax return before, you can choose for your election to start in your company’s first year. But you need to tell the government about this when you first let them know about your election. You have to do this within the same time you would normally have to give your first tax return.

Once you make an election, it keeps going until you decide to stop it.

Remember, if you want to know more about how to make an election, you can look at section HA 5. If you want to know when you need to give your first tax return, you can check section 37 of the Tax Administration Act 1994.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517208.

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Part H Taxation of certain entities
Qualifying companies (QC)

HA 30When elections take effect

  1. In a notice of election made under section HA 5, an income year later than the year of notice may be nominated as the year in which the election is to take effect and, if so, the election takes effect at the start of that income year. If no income year is nominated in the notice, the election takes effect at the start of the income year after the year of notice.

  2. If a shareholder makes an election when the company is already a qualifying company, the election takes effect when the Commissioner receives it.

  3. Despite subsection (1), if the company has not previously been required to provide a return of income, the first income year of the company may be nominated as the year in which the election is to take effect, subject to section HA 5(1B). The Commissioner must be advised of this decision in the notice of election to be received within the time allowed by section 37 of the Tax Administration Act 1994 for providing a return for the company’s first income year.

  4. An election remains in effect until revoked.

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Notes
  • Section HA 30(3): amended (with effect on 1 April 2010), on (applying for income years beginning on or after 1 April 2010), by section 75(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).