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Income Tax Act 2007

Definitions and related matters - Residence and source in New Zealand

YD 3: Country of residence of foreign companies

You could also call this:

“How to determine a foreign company's home country for tax reasons”

This section explains how to decide which country a foreign company lives in for tax purposes. It’s important for international tax rules.

A company is considered to live in a country if it has to pay income tax there. This can be because the company’s home, where it lives, where it’s run from, or something similar is in that country.

Sometimes, a company might seem to live in more than one country or no country at all. If this happens, you look at where the company was created, where its main office is, where it’s controlled from, or where the people in charge make decisions.

If you still can’t figure out where the company lives after checking all these things, you say it lives where it’s controlled from.

If you’re still not sure, the Commissioner of Inland Revenue will decide where the company lives.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1523139.

Topics:
Money and consumer rights > Taxes
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YD 2: Residence of companies, or

“How a company is determined to be a New Zealand resident for tax purposes”

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YD 3BA: Country of residence of joint trustees, or

“How the country where joint trustees live is determined”

Part Y Definitions and related matters
Residence and source in New Zealand

YD 3Country of residence of foreign companies

  1. This section applies for the purposes of the international tax rules to determine the country in which a foreign company is treated as resident for an accounting period.

  2. The company is treated as resident in a country if, at any time during the accounting period, it is liable to income tax in the country because any of the following is located in the country—

  3. its domicile:
    1. its residence:
      1. its place of management:
        1. any other criterion of a similar nature.

          1. Subsection (4) applies if the application of subsection (2) for an accounting period means that—

          2. the company is resident in 2 or more countries:
            1. the company is not resident in any country.

              1. The company is treated as resident in the country in which—

              2. it is incorporated:
                1. it has its head office:
                  1. it has its centre of management:
                    1. its directors, in their capacity as directors, exercise control of the company, even if the directors’ decision-making also occurs outside the country.

                      1. The company is treated as resident in the country in which its centre of management is located for the accounting period if no 1 country of residence is identified under subsection (4).

                      2. The Commissioner must determine the country of residence if no 1 country of residence is identified under subsection (5).

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                      Notes
                      • Section YD 3(4)(b): amended (with effect on 1 April 2008), on , by section 572(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).