Section FE 22 — Income Tax Act 2007: Notional offshore investment

FE 22 Notional offshore investment When this section applies (1) This section applies for the purposes of section FE 21(14) to determine an amount of notional offshore investment for a New Zealand banking group for an income year. Formula (2) The amount of notional offshore investment is calculated using the formula— (foreign tax credits − threshold) × 12 tax rate × interest rate of return × months. Definition of items in formula (3) In the formula,— (a) foreign tax credits is the total amount of foreign tax credits for the tax year corresponding to the income year claimed as a credit against the income tax liability for the tax year of a member of the group or a person excluded from the group under section FE 35 that does not arise from— (i) attributed CFC income or from FIF income; or (ii) income derived before 1 July 2005. (b) threshold is— (i) the amount set by the Governor-General by Order in Council as the threshold amount for the purposes of this subsection; or (ii) $416,667 multiplied by the number of months beginning on or after 1 July 2005 in the income year that includes that date, if no threshold is set under subparagraph (i): (iii) $5,000,000 if no threshold amount is set under subparagraph (i) or (ii): (c) tax rate is the rate of tax for companies set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) for the tax year corresponding to the income year referred to in subsection (1): (d) interest rate of return is— (i) the percentage amount set by the Governor-General by Order in Council as the interest rate of return for the purposes of this subsection; or (ii) 7%, if no interest rate of return is set under subparagraph (i): (e) months is the number of months beginning on or after 1 July 2005 in the corresponding income year. Defined in this Act: amount , attributed CFC income , corresponding income year , FIF income , income , income tax liability , income year , interest , New Zealand banking group , notional offshore investment amount , tax year , Compare: 2004 No 35 s FG 8G(4) Section FE 22(3)(c): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).