Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Taxation of certain entities - Qualifying companies (QC)

HA 40: Liability for qualifying company election tax

You could also call this:

“Tax payable when a company chooses to become a qualifying company”

When a company decides to become a qualifying company, it needs to pay a special tax called the qualifying company election tax. This tax is related to the change in the company’s status. You can find out how much tax the company needs to pay in section HA 41. The date when the company has to pay this tax is explained in section HA 42.

Sometimes, a company that is not a qualifying company might join together with a qualifying company. This is called amalgamation. If the company that is not a qualifying company stops existing after they join together, the new combined company still needs to pay the qualifying company election tax.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517230.

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Money and consumer rights > Taxes
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“How to work out the tax when your company becomes a qualifying company”

Part H Taxation of certain entities
Qualifying companies (QC)

HA 40Liability for qualifying company election tax

  1. A company that becomes a qualifying company must pay a qualifying company election tax in relation to the change in status, of an amount calculated under section HA 41. The date for payment is set out in section HA 42.

  2. If a company that is not a qualifying company amalgamates with a qualifying company and ends its existence on the amalgamation, the amalgamated company must pay a qualifying company election tax under subsection (1).

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