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Income Tax Act 2007

Treatment of tax losses - Use of tax losses by consolidated groups

ID 1: Treatment of tax losses by consolidated groups

You could also call this:

“How consolidated groups share and use tax losses”

When a group of companies joins together as a consolidated group, their tax losses are treated as if they belong to the whole group, not to individual companies. The rules about using and grouping tax losses apply to the consolidated group as if it were one single company. This includes rules about using losses from one year in a different year.

You can find more information about these rules in the parts of the law called Subparts IA to IC and section IZ 8. These parts explain how tax losses can be used generally and how they can be grouped.

This way of treating tax losses doesn’t apply to groups of companies that are mining companies or mineral miners. They have different rules.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517749.

Topics:
Money and consumer rights > Taxes
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ID 2: Pre-consolidation losses: general treatment, or

“How a company's pre-group losses are used within a consolidated group”

Part I Treatment of tax losses
Use of tax losses by consolidated groups

ID 1Treatment of tax losses by consolidated groups

  1. A tax loss of a consolidated group of companies is treated as the consolidated group’s tax loss, not the tax loss of a company that is part of the consolidated group. Subparts IA to IC (which relate to the general use and grouping of tax losses) and section IZ 8 (Election to use net loss for 2019–20 or 2020–21 year as tax loss in preceding year), as modified by this subpart, apply as if the consolidated group were 1 company.

  2. Nothing in this subpart applies to a consolidated group whose companies are mining companies or mineral miners.

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Notes
  • Section ID 1(1): amended (with effect on 1 April 2020), on , by section 104(1) (and see section 104(2) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section ID 1(1): amended (with effect on 15 April 2020), on , by section 10 of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).
  • Section ID 1(2): amended, on , by section 95(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
  • Section ID 1 list of defined terms mineral miner: inserted, on , by section 95(2) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).