Section FM 31 — Income Tax Act 2007: Eligibility rules

FM 31 Eligibility rules When company eligible (1) A company is eligible to form, join, and continue as part of a consolidated group at a particular time if, at the time,— (a) it is resident in New Zealand; and (b) it is not a foreign company; and (c) it is not a company that derives only exempt income, except exempt income under sections CW 9 and CW 10 (which relate to income from equity); and (d) it is incorporated in New Zealand or carrying on a business in New Zealand through a fixed establishment; and (e) it is not, by the law of another country or territory, liable to income tax in that country or territory through domicile, residence, or place of incorporation; and (f) when subsection (2) or (4) applies, it meets the relevant conditions; and (g) subsections (5) and (6) do not apply to it. Restriction when company of certain type (2) Despite subsection (1), if a company that is part of a consolidated group is 1 of the following types of company, all companies in the consolidated group at the time must be the same type as that company: (a) a qualifying company: (b) a mining company. Grandparented consolidated companies (3) The requirements of subsection (1)(d) and (e) do not apply to determine whether a grandparented consolidated company— (a) is eligible to form or join a consolidated group: (b) continues as part of the consolidated group. Non-standard balance date (4) Despite subsection (1), if a company that is part of a consolidated group has a non-standard balance date, all companies in the consolidated group at the time must have the same non-standard balance date. LAQCs (5) A company is not eligible to be part of a consolidated group if it is an LAQC. Anti-avoidance measure (6) A company is not eligible to be part of a consolidated group if, for a purpose of enabling a company to be part of a consolidated group so as to defeat the intent and application of the consolidation rules, the company’s shares— (a) are subject to an arrangement, or to a series of related or connected arrangements; or (b) have rights attaching to them extinguished or altered directly or indirectly by any means. Defined in this Act: arrangement , business , company , consolidated group , consolidation rules , exempt income , fixed establishment , foreign company , grandparented consolidated company , income , income tax , LAQC, mining company , New Zealand , non-standard balance date , qualifying company , resident in New Zealand , share , Compare: 2004 No 35 ss FD 3(b)-(e) , OB 1 “ eligible company ” Section FM 31(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 232(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section FM 31(1)(c): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 67(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34). Section FM 31(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 232(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section FM 31 list of defined terms income tax : inserted (with effect on 1 April 2008), on 6 October 2009, by section 232(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).