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Goods and Services Tax Act 1985

Interpretation

2A: Meaning of associated persons

You could also call this:

"Who are associated persons: people or companies with a close connection, like family or shared business control"

Illustration for Goods and Services Tax Act 1985

When the Goods and Services Tax Act 1985 talks about associated persons, it means people or companies that have a close connection. You are associated with someone if you have a lot of control or ownership in the same company. This can happen in different ways, such as owning a lot of shares in the company or having the power to make big decisions.

You can also be associated with someone through family ties, like being married, in a civil union, or related by blood or adoption. In some cases, you might be associated with someone because you both have a connection to the same trust or charity. The Act looks at things like voting interests, market value interests, and control of companies to decide if people are associated. You can find more information about what these terms mean in section YA 1 of the Income Tax Act 2007.

If you are a trustee of a trust, you might be associated with someone who benefits from the trust or who has the power to appoint or remove you as trustee. However, there are some exceptions to this rule, such as when the trustee is a charitable or non-profit organisation. You can also be associated with someone if you both have a connection to the same person or company through a chain of relationships. For example, if you are associated with person A, and person A is associated with person B, then you might be associated with person B. But this does not always apply, especially if the connection is through a family relationship.

The Act also explains what it means to be connected by blood relationship, marriage, civil union, or de facto relationship. You can be connected by blood relationship if you are within the second degree of relationship, which means you are closely related. You can be connected by marriage, civil union, or de facto relationship if you are in one of these relationships with someone or with someone who is closely related to them. The Act uses the term "settlor" to describe someone who sets up a trust, and you can find more information about this term in section YA 1 of the Income Tax Act 2007.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM81798.

Topics:
Money and consumer rights > Taxes
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Part 1Interpretation

2AMeaning of associated persons

  1. In this Act, associated persons or persons associated with each other are—

  2. two companies if a group of persons—
    1. has voting interests in each of those companies of 50% or more when added together; or
      1. has market value interests in each of those companies of 50% or more when added together and a market value circumstance exists in respect of either company; or
        1. has control of each of those companies by any other means whatsoever:
        2. a company and a person other than a company if the person has—
          1. a voting interest in the company of 25% or more; or
            1. a market value interest in the company of 25% or more and a market value circumstance exists in respect of the company:
            2. a person, or a branch or division of the person that is treated as a separate person under section 56B, and another branch or division of the person that is treated as a separate person under section 56B:
              1. two persons who are—
                1. connected by blood relationship:
                  1. connected by marriage, civil union or de facto relationship:
                    1. connected by adoption:
                      2. a trustee of a trust and another person (person A), if—
                        1. person A is associated with another person (the relative) under paragraph (c); and
                          1. the relative is associated with the trustee under paragraph (f):
                          2. a partnership and a partner in the partnership:
                            1. a joint venture and a member of the joint venture:
                                1. a trustee of a trust and a person who has benefited or is eligible to benefit under the trust, except if, in relation to a supply of goods and services,—
                                  1. the trustee is a charitable or non-profit body with wholly or principally charitable, benevolent, philanthropic, or cultural purposes and the supply is made in carrying out these purposes; or
                                    1. the person is a charitable or non-profit body with wholly or principally charitable, benevolent, philanthropic, or cultural purposes and the supply enables them to carry out these purposes:
                                    2. a trustee of a trust and a settlor of the trust, except if the trustee is a charitable or non-profit body with wholly or principally charitable, benevolent, philanthropic or cultural purposes:
                                      1. a trustee of a trust and a trustee of another trust if the same person is a settlor of both trusts, except if, in relation to a supply of goods and services,—
                                        1. either trustee is a charitable or non-profit body with wholly or principally charitable, benevolent, philanthropic, or cultural purposes; and
                                          1. the supply is made in, or enables, the carrying out of the charitable, benevolent, philanthropic, or cultural purposes:
                                          2. A trustee of a trust and a person who has a power of appointment or of removal of the trustee, except if the person—
                                            1. holds the power as a provider of professional services; and
                                              1. is subject to a professional code of conduct, and disciplinary process intended to enforce compliance with the code, of an approved organisation as that term is defined in section 3(1) of the Tax Administration Act 1994, for such providers of professional services; and
                                                1. has not benefited from the trust; and
                                                  1. is not eligible to benefit from the trust:
                                                  2. a person (person A) and another person (person B) if—
                                                    1. person B is associated with a third person (person C) under any one of paragraphs (a) to (hb); and
                                                      1. person C is associated with person A under any one of paragraphs (a) to (hb).

                                                      2. For the purpose of subsection (1)(a), group of persons has the meaning set out in section YA 1 of the Income Tax Act 2007.

                                                      3. For the purpose of subsection (1)(a) and (1)(b)—

                                                      4. market value circumstance has the meaning set out in section YA 1 of the Income Tax Act 2007, as if the reference to this Act in paragraph (e) of the definition were to the Goods and Services Tax Act 1985:
                                                        1. market value interest has the meaning set out in paragraph (a) of the definition of market value interest in section YA 1 of the Income Tax Act 2007:
                                                          1. voting interest has the meaning set out in paragraph (a) of the definition of voting interest in section YA 1 of the Income Tax Act 2007.

                                                            1. For the purpose of subsection (1)(a) and (1)(b), if a person (person A) and another person (person B) are associated persons under any of subsection (1)(bb) to (1)(i), person A is treated as holding anything held by person B.

                                                            2. Repealed

                                                            3. For the purpose of subsection (1)(c)—

                                                            4. persons are connected by blood relationship if they are within the second degree of relationship:
                                                              1. persons are connected by marriage, civil union or de facto relationship if one is in a marriage, civil union or de facto relationship with the other or with a person who is connected by blood relationship to the other:
                                                                1. persons are connected by adoption if one has been adopted as the child of the other or as a child of a person who is within the first degree of relationship to the other.

                                                                  1. For the purpose of subsection (1)(g) and (1)(h), settlor has the meaning set out in section YA 1 of the Income Tax Act 2007.

                                                                  2. Subsection (1)(i) does not apply if 2 persons (persons A and B) are both associated with a third person (person C) under subsection (1)(c).

                                                                  Notes
                                                                  • Section 2A: inserted, on (applying on and after 10 October 2000), by section 83(1) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).
                                                                  • Section 2A(1)(bb): inserted, on , by section 141 of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).
                                                                  • Section 2A(1)(c): substituted, on , by section 3(1) of the Goods and Services Tax Amendment Act 2005 (2005 No 9).
                                                                  • Section 2A(1)(c)(iv): repealed, on , by section 211(a) of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).
                                                                  • Section 2A(1)(cb): inserted, on , by section 211(b) of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).
                                                                  • Section 2A(1)(db): inserted (with effect on 30 August 2022), on , by section 122(1) (and see section 122(2) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                                                                  • Section 2A(1)(e): repealed, on , by section 6(1) of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                                                                  • Section 2A(1)(f): substituted, on , by section 145(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                                                                  • Section 2A(1)(g): substituted, on (applying on and after 10 October 2000), by section 61(1) of the Taxation (Beneficiary Income of Minors, Services-Related Payments and Remedial Matters) Act 2001 (2001 No 4).
                                                                  • Section 2A(1)(h): substituted, on , by section 145(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                                                                  • Section 2A(1)(hb): inserted, on , by section 398 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                                                                  • Section 2A(1)(i)(i): amended, on , by section 6(2) of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                                                                  • Section 2A(1)(i)(ii): amended, on , by section 6(2) of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                                                                  • Section 2A(2): amended, on (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
                                                                  • Section 2A(3)(a): amended, on (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
                                                                  • Section 2A(3)(a): amended, on (effective for 2005–06 tax year and later tax years, except when the context requires otherwise), by section YA 2 of the Income Tax Act 2004 (2004 No 35).
                                                                  • Section 2A(3)(b): amended, on (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
                                                                  • Section 2A(3)(c): amended, on (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
                                                                  • Section 2A(4): amended, on , by section 296 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                                                                  • Section 2A(5): repealed, on , by section 3(1) of the Goods and Services Tax Amendment Act 2005 (2005 No 9).
                                                                  • Section 2A(6): amended, on , by section 3(1) of the Goods and Services Tax Amendment Act 2005 (2005 No 9).
                                                                  • Section 2A(6)(b): substituted, on , by section 3(2) of the Goods and Services Tax Amendment Act 2005 (2005 No 9).
                                                                  • Section 2A(7): amended, on (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).