EX 36 Venture capital company emigrating to grey list country: 10-year exemption

A person’s rights in a FIF in an income year are not an attributing interest if—

(a)

the rights are a direct income interest; and

(b)

the FIF is a grey list company; and

(c)

the FIF is not an entity described in schedule 25, part B (Foreign investment funds); and

(d)

the person has held shares in the company at all times after a time when—

(i)

the company was resident in New Zealand; and

(ii)

the shares were not listed on a recognised exchange; and

(e)

the company became a grey list company immediately after having, for 12 months or more,—

(i)

carried on business in New Zealand; and

(ii)

had in New Zealand more than 50% of its assets; and

(iii)

had in New Zealand more than 50% of its employees; and

(f)

the year begins less than 10 years after the company became a grey list company; and

(g)

at all times in the year, the company has a fixed establishment in New Zealand; and

(h)

the company through the fixed establishment—

(i)

incurs in the year, expenditure other than interest of at least $1,000,000 or, if less than $1,000,000, at least 25% of the total expenditure, other than interest, incurred by the company in the year; and

(ii)

at all times in the year, engages at least 10 fulltime employees or contractors or, if less than 10, at least 25% of the total number engaged by the company.

Defined in this Act: attributing interest, company, direct income interest, employee, FIF, fixed establishment, grey list company, income year, interest, New Zealand resident, recognised exchange, share, year

Compare: 2004 No 35 s EX 33(3)

Section EX 36(d): amended, on 1 April 2008, by section 387(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section EX 36(e)(i): substituted, on 1 April 2008, by section 387(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section EX 36(h)(i): substituted, on 1 April 2008, by section 387(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section EX 36(h)(ii): substituted, on 1 April 2008, by section 387(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).