Section YD 5 — Income Tax Act 2007: Apportionment of income derived partly in New Zealand

YD 5 Apportionment of income derived partly in New Zealand When this section applies (1) This section applies when— (a) a person carries on business partly in New Zealand and partly outside New Zealand; or (b) a contract is made in New Zealand and is performed, in whole or in part, by a person outside New Zealand; or (c) a contract is made outside New Zealand and is performed, in whole or in part, by a person in New Zealand. Relationship with source rules (1B) This section does not apply to limit the effect of— (a) any of the source rules in section YD 4 other than those in section YD 4(2) and (3); or (b) the source rules in section YD 4(2) and (3) to the extent to which the income referred to is also income referred to in any source rule other than those in section YD 4(2) and (3). Apportionment (2) The amount of income derived from the business or under the contract, and the amount of expenditure incurred in deriving the income, must be apportioned between New Zealand and sources outside New Zealand to the extent necessary to achieve the result in subsection (3). Necessary effect of apportionment (3) The result of the apportionment, to the extent consistent with subsection (2), must be that the person’s net income or net loss, in relation to the business or contract, is the same as a separate and independent person would have if they were carrying out only the person’s activities in New Zealand and dealing at arm’s length. Defined in this Act: amount , business , gross , income , net loss , New Zealand , Compare: 2004 No 35 s FB 2(1A) Section YD 5(1B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 574(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section YD 5(1B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 574(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section YD 5(3): amended (with effect on 1 April 2008), on 6 October 2009, by section 574(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section YD 5 compare note: amended (with effect on 1 April 2008), on 6 October 2009, by section 574(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).