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Income Tax Act 2007

Treatment of tax losses - Terminating provisions

IZ 6: Companies’ tax losses for 1990–91 and 1991–92 tax years

You could also call this:

“How companies can use certain tax losses from 1990-1992”

This law is about companies that had tax losses in the 1990-91 or 1991-92 tax years. If you run a company, here’s what you need to know:

If your company had a tax loss in one of these years, you might be able to carry some of it forward to future years. This is possible even if a certain rule (section 188(7B) of the Income Tax Act 1976) would normally stop you from doing this.

To use this special rule, you need to show that the tax loss happened during a specific part of the tax year. You’ll need to give the Commissioner of Inland Revenue good financial statements that show how much of the tax loss happened during that part of the year. These statements need to be fair and reasonable.

This rule applies to the part of the tax year that starts from 8:00 pm New Zealand Standard Time on 30 July 1991. It doesn’t change how the rule works for any time after that.

If you can show all this, then section 188(7B) won’t stop you from carrying forward the part of the tax loss that happened during that specific time.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517887.

Topics:
Money and consumer rights > Taxes
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IZ 5: Companies’ tax losses for tax years before 1991–92 tax year, or

“How companies can use tax losses from before 1991-92”

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IZ 7: Grouping tax losses for tax years before 1981–82 and between 1981–82 and 1991–92, or

“Rules for sharing tax losses between companies from 1981 to 1992”

Part I Treatment of tax losses
Terminating provisions

IZ 6Companies’ tax losses for 1990–91 and 1991–92 tax years

  1. This section applies to a company that has a tax loss for the 1990–91 or 1991–92 tax year and section 188(7B) of the Income Tax Act 1976 would not have applied to prevent some or all of the tax loss being carried forward if regard were had to only part of the relevant tax year.

  2. Section 188(7B) does not apply to prevent the part of the tax loss attributable to the relevant part-period being carried forward under section 188(2).

  3. For the purposes of subsection (2), the company must provide the Commissioner with adequate financial statements relating to the relevant part-period that disclose the amount that would be the tax loss for the relevant part of the tax year, on a fair and reasonable basis of attribution.

  4. In subsection (1), the reference to subsection (7B) applies to the extent to which regard was required to be had to that part of the period starting with 8.00 pm New Zealand Standard Time on 30 July 1991 which falls within the tax year in which the tax loss component arises, and without prejudice to the application of that subsection to the extent to which it required regard to be had to later periods.

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