Section FO 3 — Income Tax Act 2007: Resident’s restricted amalgamations

FO 3 Resident’s restricted amalgamations What is a resident’s restricted amalgamation? (1) In the amalgamation rules, an amalgamation is a resident’s restricted amalgamation if, at the time of the amalgamation, each of the amalgamating companies and the amalgamated company— (a) is resident in New Zealand; and (b) is not treated under, and for the purposes of, a double tax agreement as resident in another country; and (c) is not a company that derives only exempt income, except income exempt under sections CW 9 and CW 10 (which relate to income from equity); and (d) if the amalgamated company is a qualifying company, it meets the condition in subsection (2); and (e) if the amalgamated company is a loss-attributing qualifying company (LAQC), it meets the condition in subsection (3). Qualifying companies (2) If the amalgamated company is a qualifying company immediately after the amalgamation, each of the amalgamating companies must be a qualifying company at the time of the amalgamation. LAQCs (3) If the amalgamated company is an LAQC immediately after the amalgamation, each of the amalgamating companies must be an LAQC at the time of the amalgamation. Companies deriving exempt income (4) For the purposes of subsection (1)(c), a company that derives only exempt income includes a local authority that is not a council-controlled organisation. Companies opting out (5) Even if they meet the requirements of subsection (1), the companies may choose that the amalgamation will not be treated as a resident’s restricted amalgamation by notifying the Commissioner in the way set out in section 75 of the Tax Administration Act 1994. Defined in this Act: amalgamated company , amalgamating company , amalgamation , amalgamation rules , Commissioner , company , council-controlled organisation , double tax agreement , exempt income , LAQC, local authority , New Zealand , notify , qualifying company , resident in New Zealand , resident’s restricted amalgamation , Compare: 2004 No 35 s OB 1 “ qualifying amalgamation ” Section FO 3(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 68(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).