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Income Tax Act 2007

Tax credits and other credits - Tax credits relating to attributed controlled foreign company income

LK 13: Use of credits by amalgamated company

You could also call this:

“Unused tax credits can be transferred when companies merge”

When a company joins with another company, it might have some tax credits that it hasn’t used yet. If these credits could have been used by the new combined company or the companies that joined together, they don’t go to waste. The new combined company can use these leftover tax credits in the same year that the companies joined together. This rule applies even if the new combined company was only created when the companies joined. However, the credits must be the kind that could have been used by both the old and new companies. If you want to know more about how tax credits work when they’re more than what you owe in taxes, you can look at section LA 4(1).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518183.

Topics:
Money and consumer rights > Taxes
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LK 12: Treatment of credits when companies amalgamate, or

“How tax credits are handled when companies combine”

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LK 14: Use by amalgamated company of credits carried forward, or

“Merged companies can use leftover tax credits from before joining”

Part L Tax credits and other credits
Tax credits relating to attributed controlled foreign company income

LK 13Use of credits by amalgamated company

  1. This section applies when an amalgamating company ends its existence on a resident’s restricted amalgamation and the company has a tax credit under this subpart that—

  2. has not otherwise been used by the amalgamating company before the date of amalgamation:
    1. if treated as a credit remaining for a tax year under section LA 4(1) (When total tax credit more than income tax liability), could be made available to each of the amalgamated company, unless it is a company incorporated only on amalgamation, and a company that is amalgamated with the amalgamated company.

      1. The tax credit is treated as a credit of the amalgamated company for the tax year in which the amalgamation occurs.

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