Section RC 31 — Income Tax Act 2007: Consolidated groups using GST ratio method

RC 31 Consolidated groups using GST ratio method Sections RC 8 , RC 9(6) , RC 11 , and RC 15 to RC 19 apply to a consolidated group of companies with the following modifications: (a) if a consolidated group that is eligible to use, or is using, a GST ratio for a tax year is joined by a company, the following subparagraphs apply: (i) if the company joins at the start of the tax year and, as a result, the threshold in section RC 16(2)(a) is exceeded, the group is no longer eligible to use a GST ratio: (ii) if the company joins at the start of the tax year, and the group, allowing for the inclusion of the company, is eligible under section RC 16(1) , the group may use a GST ratio, subject to the recalculation of the ratio under paragraph (c): (iii) if the company joins at some time in the tax year, the group may continue to use a GST ratio for the tax year, as recalculated under paragraph (c), provided the requirements for eligibility other than the threshold in section RC 16(2)(a) are met: (b) if a consolidated group that does not determine provisional tax payable for a tax year using a GST ratio, is joined by a company that is using a GST ratio for the tax year, the group may not start using a GST ratio for this purpose for the tax year: (c) for the purposes of paragraph (a),— (i) the group must recalculate the GST ratio applying for a tax year to include the residual income tax of the company for the preceding tax year and the total taxable supplies of the company for the corresponding income year, applying section RC 8(3) if required; and (ii) the recalculated GST ratio applies to provisional tax payments made for the corresponding income year on or after the date on which the company joins the group: (d) sections RC 17(3) and RC 18(4) or (5) , as applicable, apply to a company that leaves a consolidated group at some time in a tax year. Defined in this Act: company , consolidated group , corresponding income year , GST ratio , pay , provisional tax , residual income tax , tax year , total taxable supplies , Compare: 2004 No 35 s MB 32