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Income Tax Act 2007

Taxation of certain entities - Portfolio investment entities - Requirements

HM 19B: Modified rules for foreign investment zero-rate PIEs

You could also call this:

“Rules for foreign investment funds with zero tax rate”

If you’re a foreign investment zero-rate PIE, you can only earn money from two sources. You can earn foreign-sourced amounts, which means money from outside New Zealand. You can also earn amounts allowed under section HM 55G, but only up to the limit set in section HM 55H.

You’re considered to live in New Zealand for the purposes of section HM 8 if you meet two conditions. First, you need to be a unit trust. Second, you need to have a trustee who lives in New Zealand.

These rules are different from the usual rules in section HM 12, which normally say what kinds of income PIEs can earn.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4020210.

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Part H Taxation of certain entities
Portfolio investment entities: Requirements

HM 19BModified rules for foreign investment zero-rate PIEs

  1. Despite section HM 12, the income derived by a foreign investment zero-rate PIE must consist of no amount other than—

  2. a foreign-sourced amount:
    1. an amount allowable under section HM 55G, as measured under section HM 55H.

      1. A foreign investment zero-rate PIE is resident in New Zealand for the purposes of section HM 8 if it—

      2. is a unit trust; and
        1. has a trustee who is resident in New Zealand.

          Notes
          • Section HM 19B: inserted, on , by section 62 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
          • Section HM 19B(2)(a): amended, on , by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).