Section FE 12B — Income Tax Act 2007: Calculations for group for test and apportionment using interest-income ratio

FE 12B Calculations for group for test and apportionment using interest-income ratio Application of rules (1) The rules in this section apply to the calculation, for an entity's New Zealand group or worldwide group, of the following amounts: (a) deductions for interest allowed to the group under sections DB 6 to DB 9 (which relate to deductions for interest), for the purposes of section FE 5(1BB) : (b) the income of the group that is interest, for the purposes of section FE 5(1BB ): (c) the items in the formula for adjusted net profit in section FE 5(1BC) : (d) the items in the formula for interest-income ratio in section FE 5(1E) . Generally accepted accounting practice for consolidation (2) An amount calculated under these rules for an entity's group must be calculated under generally accepted accounting practice for the consolidation of companies for the purposes of eliminating intra-group income, expenses, transactions, and balances. Non-resident member of New Zealand group (3) If a member of a New Zealand group is not resident in New Zealand, the amounts for the member are not included in a consolidation except to the extent that the amounts relate to— (a) the carrying on of business in New Zealand through a fixed establishment in New Zealand: (b) the derivation of income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable. Defined in this Act: business , deduction , double tax agreement , fixed establishment , generally accepted accounting practice , income , interest , New Zealand , New Zealand tax , non-resident passive income , resident in New Zealand , source in New Zealand Section FE 12B: inserted (with effect on 1 July 2009 and applying for income years beginning on or after that date), on 7 May 2012, by section 55(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34). Section FE 12B(3)(b): replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 55(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34). Section FE 12B list of defined terms non-resident passive income : inserted (with effect on 1 July 2011), on 7 May 2012, by section 55(3) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).