Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Taxation of certain entities - Agents

HD 6: When relationship effectively that of principal and agent

You could also call this:

“When someone else has significant control over your business”

If you run a business in New Zealand, and someone else has a lot of control over your business, the Commissioner might decide that you’re acting like an agent for that other person. This can happen even if the person controlling your business is in another country. If this happens, the Commissioner can treat your business as if it belongs to the person controlling you, and you’re just running it for them.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517390.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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HD 5: Matters between principals and agents, or

“How agents can pay and collect tax on behalf of principals”

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HD 7: Rate and amount of tax, or

“How to calculate tax for agents acting on behalf of others”

Part H Taxation of certain entities
Agents

HD 6When relationship effectively that of principal and agent

  1. If a person who is carrying on business in New Zealand is sufficiently under the control of another person in business, whether in New Zealand or elsewhere, so that the relationship between them is effectively that of principal and agent, the Commissioner may treat the first business as the principal’s business carried on by the agent on behalf of the principal.

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Notes
  • Section HD 6 list of defined terms control: repealed, on , by section 594 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).