Section GC 8 — Income Tax Act 2007: Insufficient amount receivable by person

GC 8 Insufficient amount receivable by person Amount receivable (1) If the amount of consideration receivable by a person (the taxpayer ) under a transfer pricing arrangement is less than an arm’s length amount, an amount equal to the arm’s length amount is treated as the amount receivable by the taxpayer for each of the following purposes: (a) the calculation of their income tax liability for a tax year: (b) [Repealed] (c) the determination of the obligation of another person to withhold under Part R (General collection rules) from the amount. Non-resident’s exemption: deduction to payer (2) This section does not apply when— (a) the taxpayer is neither resident in New Zealand nor entering into the arrangement for the purposes of a business carried on in New Zealand through a fixed establishment in New Zealand; and (b) the amount receivable is a deduction of the other party or, in the case of an interest-free loan, would be a deduction but for the application of subpart FE (Interest apportionment on thin capitalisation) if an arm’s length amount of interest were substituted; and (c) the amount receivable is interest, royalties, or an insurance premium to which section YD 8 (Apportionment of premiums derived by non-resident general insurers) applies. Non-resident’s exemption: fixed-rate share dividend (3) This section does not apply if both of the following requirements are met: (a) the taxpayer is neither resident in New Zealand nor entering into the arrangement for the purposes of a business carried on in New Zealand through a fixed establishment in New Zealand: (b) the amount is a dividend receivable on a fixed-rate share. Defined in this Act: amount , arrangement , deduction , dividend , fixed establishment , fixed-rate share , income tax liability , interest , resident in New Zealand , royalty , tax year , taxpayer , transfer pricing arrangement , Compare: 2004 No 35 s GD 13(4), (5) Section GC 8(1)(b): repealed (with effect on 30 June 2009), on 6 October 2009, by section 246(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).