EX 37 Grey list company owning New Zealand venture capital company: 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 grey list company at all times after a time when the shares were not listed on a recognised exchange; and

(e)

at all times in the year, the grey list company holds more than 50% of the voting interests in a company resident in New Zealand (the resident company) that, for 12 months or more, has—

(i)

carried on a business in New Zealand; and

(ii)

had in New Zealand more than 50% of the resident company’s assets; and

(iii)

had in New Zealand more than 50% of the resident company’s employees; and

(f)

the year begins less than 10 years after the grey list company first held more than 50% of the voting interests in the resident company; and

(g)

the resident company through a fixed establishment in New Zealand—

(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:

(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, voting interest, year

Compare: 2004 No 35 s EX 33(4)

Section EX 37(d): substituted, on 1 April 2008, by section 388(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section EX 37(e): substituted, on 1 April 2008, by section 388(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section EX 37(e): amended (with effect on 1 April 2008), on 6 October 2009, by section 171(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section EX 37(f): substituted (with effect on 1 April 2008), on 6 October 2009, by section 171(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section EX 37(g)(i): substituted, on 1 April 2008, by section 388(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section EX 37(g)(ii): substituted, on 1 April 2008, by section 388(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section EX 37 list of defined terms voting interest: inserted (with effect on 1 April 2008), on 6 October 2009, by section 171(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).