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New Zealand law explained for everyone

Income Tax Act 2007

Memorandum accounts - Memorandum accounts of consolidated groups

OP 1: Memorandum accounts of consolidated groups

You could also call this:

“How tax records work for groups of companies”

When you’re part of a group of companies that work together (called a consolidated group), the law treats you as if you were one big company. This means that the rules for consolidated groups apply to you.

Your group might need to keep a special record called a memorandum account for the tax year. Sometimes, you can choose to keep one if you want to.

If your group has a memorandum account, it’s separate from the accounts of each company in your group. This means that your group’s account is different from the accounts of the individual companies.

There are some general rules about memorandum accounts that you need to follow. These rules talk about how to use and manage your account.

Your memorandum account will have credits (good things) and debits (not so good things) in it. There are tables that show you what these credits and debits are, when they happen, and which part of the law explains them in more detail.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519410.

Topics:
Money and consumer rights > Taxes
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Part O Memorandum accounts
Memorandum accounts of consolidated groups

OP 1Memorandum accounts of consolidated groups

  1. For the purposes of this Part, a consolidated group is treated as if it were a single company, and subpart FM (Consolidated groups of companies) applies to the consolidated group.

  2. A consolidated group may be—

  3. required to maintain a memorandum account for a tax year; or
    1. entitled to maintain a memorandum account for a tax year.

      1. A consolidated group’s memorandum account is separate from the memorandum account of each company in the consolidated group.

      2. The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to a memorandum account of a consolidated group.

      3. The credits and debits that arise in a memorandum account are listed in tables set out at the end of this subpart. The tables—

      4. state the credits and the debits; and
        1. state the credit dates and debit dates when the credits and debits arise; and
          1. refer to the section that fully defines them, and provides the credit dates and debit dates for each credit and debit.

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