Section FM 4 — Income Tax Act 2007: Limiting joint and several liability of group companies

FM 4 Limiting joint and several liability of group companies When this section applies (1) This section applies before the nominated company of a consolidated group makes an assessment for the consolidated group for a tax year. Named companies bearing liability (2) Despite section FM 3(5) , the nominated company may ask the Commissioner for approval for 1 or more named companies in the consolidated group to bear the consolidated group’s income tax liability for the tax year. Approval by Commissioner (3) The Commissioner must approve a request under subsection (2) unless limiting the liability to the named companies will significantly prejudice the recovery, or likely recovery, of the income tax liability of the consolidated group for the tax year. Liability limited to named companies (4) For a tax year to which an approval referred to in subsection (3) relates,— (a) only a named company is liable for the income tax liability of the consolidated group, and if more than 1 company is named, the liability is joint and several: (b) section RC 28 (Provisional tax rules and consolidated groups) does not apply to impose on a company other than a named company joint and several liability for provisional tax payable by the consolidated group. When named companies do not meet obligations (5) Despite subsection (4), the joint and several liability of a group company other than a named company is not extinguished to the extent to which— (a) a named company does not meet their income tax liability under this section; and (b) the Commissioner determines that the income tax liability of the consolidated group that is attributable to the taxable income of a company other than a named company is to be recovered from the other company. Defined in this Act: assessment , Commissioner , company , consolidated group , income tax liability , nominated company , pay , provisional tax , tax year , taxable income , Compare: 2004 No 35 s HB 1(3)–(5)