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Income Tax Act 2007

Income - Income from business or trade-like activities - Exclusions for bodies controlled by local authorities

CB 15C: Council-controlled organisations and other companies

You could also call this:

“Tax exemptions for local authorities and their controlled organisations”

This law is about when certain tax rules don’t apply to local authorities and companies they control. You don’t have to pay tax on some income if you’re a local authority or a company controlled by one. This applies even if someone you work with (called an associated person) is doing activities that might usually be taxed.

The law says this exception applies if you’re a local authority or an organisation controlled by one. It also includes some other groups that work closely with local authorities. The associated person can be the local authority, one of these organisations, or someone else who’s connected to you in a specific way.

If you and the associated person are part of a bigger group of companies, and this law stops some money from being counted as your income, that money won’t be counted as income for the whole group either.

When the law talks about other parts of the tax rules, it provides links to those sections. This helps you find more information if you need it.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7209274.

Topics:
Money and consumer rights > Taxes
Government and voting > Local councils
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Part C Income
Income from business or trade-like activities: Exclusions for bodies controlled by local authorities

CB 15CCouncil-controlled organisations and other companies

  1. Sections CB 9(2), CB 10(2), and CB 11(1)(b)(ii) do not apply to a person (person A) despite the activities of an associated person (person B) if—

  2. person A is a local authority or—
    1. a council-controlled organisation that is linked by ownership or control to the local authority:
      1. an entity referred to in section 6(4)(a) to (ca) of the Local Government Act 2002, that is linked by ownership or control to the local authority:
        1. an entity that is associated with the local authority other than under section YB 14 (Tripartite relationship); and
        2. person B is—
          1. the local authority or an organisation or entity of a kind referred to in paragraph (a)(i) to (iii):
            1. a person that is not associated with person A other than under section YB 14.

            2. If person A and person B are members of a consolidated group, and subsection (1) applies to prevent an amount from being income of person A, the amount is not income of person A under section CV 2 (Consolidated groups: income of company in group).

            Notes
            • Section CB 15C: inserted (with effect on 1 September 2015), on , by section 12 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
            • Section CB 15C(1): amended (with effect on 1 September 2015), on , by section 120 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).