Part 9 Special cases

55 Group of companies

(1)

For the purposes of this Act, 2 or more companies (the companies) are eligible to be a group of companies at a time if,—

(a)

at the time and under section IC 3 of the Income Tax Act 2007, the companies—

(i)

are a group of companies:

(ii)

are part of a group of companies:

(iii)

would be a group of companies or part of a group of companies but for 1 or more of the companies being a multi-rate PIE or a look-through company:

(iv)

would be a group of companies or part of a group of companies but for 1 or more of the companies being a listed PIE; and

(b)

the companies,—

(i)

at the time, are each a registered person:

(ii)

in a 12-month period that includes the time, make a total value of taxable supplies to persons other than the companies that is at least 75% of the total value of all supplies made in that period by the companies to persons other than the companies.

(1B)

Despite subsections (1) and (4)(a), a person registered under section 54B may not apply to be a member of a group of companies or for a further company to be a member of a group of companies, if the resulting group would have both resident and non-resident persons as members.

(2)

Where 2 or more companies apply to be members of a group of companies for the purposes of this section, and the Commissioner is satisfied that they are eligible to be members of a group of companies pursuant to subsection (1), they shall be members of a group of companies from the beginning of such taxable period as is determined by the Commissioner.

(3)

In any application made under subsection (2) by 2 or more companies—

(a)

one of the companies shall be nominated to be the representative member; and

(b)

the company nominated under paragraph (a) must be a registered person.

(4)

Where any companies are members of a group of companies, the representative member nominated under subsection (3) may apply to the Commissioner for—

(a)

a further company eligible to be a member of that group of companies to be a member of that group of companies; or

(b)

one of the members of that group of companies to be excluded from that group of companies; or

(c)

another member of the group of companies to be nominated as the representative member, and the member nominated under subsection (3) to no longer be the representative member; or

(d)

that group of companies to no longer be a group of companies for the purposes of this section,—

and the Commissioner shall grant the application from the beginning of such taxable period as is determined by the Commissioner.

(4AA)

[Repealed]

(4A)

The appointment of a specified agent, as defined in section 58(1), does not affect the membership of a group of companies.

(5)

Where any member of a group of companies has ceased to be eligible to be a member of that group, and—

(a)

that member or the representative member of that group of companies notifies the Commissioner of that cessation pursuant to section 53(1)(d); or

(b)

the Commissioner is otherwise satisfied that any member of a group of companies has ceased to be so eligible,—

the Commissioner shall, by notice given to that member or that representative member, terminate that membership from such date as may be specified in the notice.

(6)

For the purposes of this Act, any notice served in accordance with this Act, which is addressed to the representative member of any group of companies shall be deemed to be served on that representative member and on all members of that group of companies.

(7)

Subject to subsection (7B), where any companies are a group of companies for the purposes of this section,—

(a)

any taxable activity carried on by a member of the group shall be deemed to be carried on by the representative member and not to be carried on by any other member of the group; and

(b)

all members of the group shall have the same taxable period pursuant to sections 15 to 15E and the same accounting basis pursuant to section 19 or section 19A; and

(c)

subject to paragraphs (db) and (dc), any taxable supply of goods and services by a member of the group to another member of the group may be disregarded; and

(d)

any other taxable supply of goods and services by a member of the group shall be deemed to be a taxable supply by the representative member; and

(da)

any supply of goods and services, other than a taxable supply, made by a member of the group, shall be deemed to be made by the representative member; and

(dab)

subject to paragraph (c), any supply of goods and services to a member of the group is a supply to the representative member; and

(db)

to the extent that goods and services acquired or produced or applied by any member of a group for the principal purpose of making taxable supplies are applied by the representative member of that group for a purpose other than that of making taxable supplies, that acquisition or production or application of those goods and services shall, for the purposes of section 21(1), be deemed to have been made by the representative member of that group; and

(dc)

to the extent that goods and services acquired or produced on or after 1 October 1986 by any member of a group other than for the principal purpose of making taxable supplies are applied by the representative member of that group for a purpose of making taxable supplies, that acquisition or production of those goods and services shall, for the purposes of section 21E, be deemed to have been made by the representative member of that group; and

(dd)

any statement or other information provided to a member of the group under section 78F shall be deemed to be provided to the representative member; and

(de)

any statement or other information provided by a member of the group under section 78F shall be deemed to be provided by the representative member; and

(e)

any input tax paid or payable by a member of the group shall be deemed to be paid or payable by the representative member; and

(f)

any obligation on any member of the group, other than the representative member, pursuant to section 16, shall be disregarded:

provided that—

(g)

a member of the group is liable jointly and severally with all other members of the group for all tax payable by the representative member for each taxable period, or part of a taxable period, in which the member is part of the group, even if the member is no longer part of the group or a representative member ceases to exist; and

(h)

the provisions of section 24, section 75, and Part 8 shall continue to apply to all such members of the group.

(7B)

Subsection (7), apart from paragraphs (b) and (e) to (h), does not apply to a group of companies in relation to a supply of services that is treated by section 8(4B) as being made in New Zealand.

(8)

If the members of a group of 2 or more registered persons include a person that is not a company or is a limited partnership and the Commissioner is satisfied in relation to the members of the group that—

(a)

one of them controls each of the others; or

(b)

one person controls all of them; or

(c)

2 or more persons carrying on a taxable activity in partnership control all of them,—

the Commissioner may deem those registered persons to be members of a group, and subsections (2) to (7) shall apply as if every reference in the said subsections to a group of companies were a reference to that group, and as if every reference in the said subsections (2) to (7) to companies were a reference to the members of the group.

Section 55(1): substituted (with effect on 1 October 2007), on 19 December 2007, by section 279(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section 55(1)(a): amended, on 1 April 2008, by section 279(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section 55(1)(a)(iii): amended (with effect on 1 April 2011), on 2 November 2012, by section 223(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section 55(1)(a)(iv): added, on 29 August 2011, by section 242 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section 55(1B): inserted, on 1 April 2014, by section 142 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section 55(3): substituted (with effect on 1 October 2001), on 18 December 2006, by section 218(3) of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

Section 55(4): amended, on 18 December 2006, by section 218(6)(b) of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

Section 55(4)(d): amended, on 18 December 2006, by section 218(6)(a) of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

Section 55(4AA): repealed, on 18 December 2006, by section 218(7) of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

Section 55(4A): inserted, on 10 October 2000 (applying on and after 10 October 2000), by section 110(1) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 55(5): amended, on 2 June 2016, by section 195 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).

Section 55(5)(a): substituted, on 23 September 1997, by section 115 of the Taxation (Remedial Provisions) Act 1997 (1997 No 74).

Section 55(7): amended, on 1 January 2005, by section 164(1) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 55(7)(b): amended, on 1 October 2007, by section 295 of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).

Section 55(7)(b): amended, on 1 April 1991, by section 5(7) of the Goods and Services Tax Amendment Act 1991 (1991 No 11).

Section 55(7)(c): substituted, on 22 March 1989 (applying to supplies made on or after 22 March 1989), by section 10(1) of the Goods and Services Tax Amendment Act 1989 (1989 No 8).

Section 55(7)(d): amended, on 1 January 2005, by section 164(2) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 55(7)(da): inserted (with effect on 3 December 1985), on 8 August 1986, by section 29(3) of the Goods and Services Act Amendment Act 1986 (1986 No 43).

Section 55(7)(dab): inserted, on 1 January 2005, by section 164(3) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 55(7)(db): inserted, on 22 March 1989 (applying to supplies made on or after 22 March 1989), by section 10(2) of the Goods and Services Tax Amendment Act 1989 (1989 No 8).

Section 55(7)(db): amended, on 25 November 2003, by section 164(4)(a) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 55(7)(db): amended, on 25 November 2003, by section 164(4)(b) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 55(7)(db): amended, on 25 November 2003, by section 164(4)(c) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 55(7)(dc): inserted, on 22 March 1989 (applying to supplies made on or after 22 March 1989), by section 10(2) of the Goods and Services Tax Amendment Act 1989 (1989 No 8).

Section 55(7)(dc): amended, on 25 November 2003, by section 164(5) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 55(7)(dc): amended, on 10 October 2000 (applying on and after 10 October 2000), by section 110(2) of the Taxation (GST and Miscellaneous Provisions) Act 2000 (2000 No 39).

Section 55(7)(dd): inserted (with effect on 1 April 2011), on 2 November 2012, by section 223(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section 55(7)(de): inserted (with effect on 1 April 2011), on 2 November 2012, by section 223(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section 55(7)(g): replaced, on 30 March 2017, by section 369(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 55(7B): inserted, on 1 January 2005, by section 164(6) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 55(8): amended, on 30 March 2017, by section 369(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section 55(8)(c): amended, on 1 August 1990, by section 14 of the Goods and Services Tax Amendment Act 1990 (1990 No 64).