Section DB 7 — Income Tax Act 2007: Interest: most companies need no nexus with income

DB 7 Interest: most companies need no nexus with income Deduction (1) A company is allowed a deduction for interest incurred. Exclusion: qualifying company (2) Subsection (1) does not apply to a qualifying company. Exclusion: exempt income (3) If a company ( company A ) derives exempt income or another company ( company B ) that is part of the same wholly-owned group of companies derives exempt income, subsection (1) applies to company A only if all the exempt income is 1 or more of the following: (a) dividends; or (b) income exempted under section CW 58 (Disposal of companies’ own shares); or (c) income exempted under section CW 60 (Stake money) and ancillary to the company’s business of breeding. Exclusion: non-resident company (4) If a company is a non-resident company, subsection (1) applies only to the extent to which the company incurs interest in the course of carrying on a business through a fixed establishment in New Zealand. Exclusion: interest related to tax (5) Subsection (1) does not apply to interest for which a person is denied a deduction under section DB 1 . Consolidated groups (6) Section FM 12 (Expenditure when deduction would be denied to consolidated group) may apply to allow a deduction under this section to a company that is part of a consolidated group. Conduit financing arrangements [Repealed] (7) [Repealed] Link with subpart DA (8) This section supplements the general permission and overrides the capital limitation, the exempt income limitation, and the withholding tax limitation. The other general limitations still apply. Defined in this Act: business , capital limitation , company , consolidated group , deduction , dividend , exempt income , exempt income limitation , fixed establishment , general limitation , general permission , income , interest , New Zealand , non-resident company , qualifying company , supplement , wholly-owned group of companies , withholding tax limitation , Compare: 2004 No 35 s DB 7 Section DB 7(7) heading: repealed (with effect on 30 June 2009), on 6 October 2009, pursuant to section 70(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section DB 7(7): repealed (with effect on 30 June 2009), on 6 October 2009, by section 70(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).