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Income Tax Act 2007

General collection rules - Provisional tax - Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 32: Wholly-owned groups of companies

You could also call this:

“Companies in the same group can share tax payments”

This section talks about how companies that are part of the same group can help each other with their tax payments. If you’re part of a company that has paid more tax than it needs to, you can give some of that extra money to another company in your group that hasn’t paid enough.

You can only do this if both companies are in the same group and are owned by the same people. The company that has paid too much tax can transfer some money to the other company, but only if that other company hasn’t paid enough to cover its tax bill for the year.

You can make this transfer on the day you realise you’ve paid too much, or when the other company has to make its first tax payment - whichever comes later.

If you want to do this, you need to tell the tax office. You have to say which company you’re giving the money to, how much you’re giving, and when you’re doing it. You need to tell them by the time the other company has to do its tax return, or a bit later if the tax office gives you more time.

When you do this, it’s like the other company paid the tax themselves, not you. This helps make sure everyone in the group pays the right amount of tax.

Remember, there are some rules about tax refunds that are more important than this one, so you should check those too.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519904.

Topics:
Money and consumer rights > Taxes
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Part R General collection rules
Provisional tax: Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 32Wholly-owned groups of companies

  1. This section applies for the purposes of the provisional tax rules and Part 7 of the Tax Administration Act 1994 in relation to a company (company A) that is in a tax year part of a wholly-owned group of companies that includes another company (company B). Sections RM 13 to RM 17 (which relate to refunds) override this section.

  2. If, for a tax year, company A has paid an amount that is more than the provisional tax payable for the tax year, the company may transfer some or all of the overpayment to company B to the extent to which the amount of provisional tax paid by company B is less than their residual income tax for the tax year. Company A must notify the Commissioner under subsection (4).

  3. Company A may transfer an amount under subsection (2) on or after the later of—

  4. the day on which company A overpays the provisional tax; or
    1. the day on which the first instalment of provisional tax for the tax year becomes payable by company B.

      1. A notice under subsection (2) must—

      2. name company B, and the amount to be transferred; and
        1. state the date on which the overpayment is treated as transferred to company B; and
          1. be given to the Commissioner within—
            1. the time for providing a return of income for the tax year for company B; or
              1. an extension of time allowed by the Commissioner.

              2. For the purposes of this section,—

              3. a transfer under subsection (2) is treated as made on the date stated in the notice; and
                1. provisional tax transferred by company A to company B is treated as provisional tax paid by company B and not by company A.

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