About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Friday, July 22nd, 4:40PM
rss
Latest Headlines

Controlled foreign company

I have set up a company in the Cayman Islands which sells products over the Internet to customers from all over the world. I do not intend to repatriate any of the profits to New Zealand. Does this company have a New Zealand tax liability? ANSWER

Wednesday, July 18th 2001, 11:46AM

Answer
On the basis that the Cayman Islands company is "controlled" by a New Zealand tax resident, it will be subject to New Zealand tax on its worldwide income. The comprehensive international tax rules provide that the company's income is attributed to its New Zealand shareholders and is subject to tax in New Zealand if the New Zealand resident has an income interest of 10% or more in the company. This regime is known as the controlled foreign company (CFC) regime. If the income interest is less than 10% the foreign investment fund rules will apply.

There are exceptions from these regimes for entities which are resident in certain jurisdictions such as Canada and the United States. If the CFC rules do not apply, for example if the company is moved to the United States (ie, a grey list country), transactions with New Zealand customers are likely to have a source in New Zealand and the resulting profits would be caught in the New Zealand tax net. See s OE 4(1)(a), (q).

It appears that your company will be subject to the CFC regime.

Income Tax Act 1994, ss CG 4(1), OE 4(1)(a), (q).
2001 New Zealand Master Tax Guide, 26-040.

« Forgiveness of debt owed by family trustTax implications of company migrating from New Zealand (Brierley) »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.64 4.75 4.85 4.99
ANZ Special - 4.25 4.35 -
ASB Bank 5.65 4.69 4.75 4.89
ASB Bank Special - 4.25 4.29 4.34
BankDirect 5.65 4.69 4.75 4.89
BankDirect Special - 4.25 4.29 4.34
BNZ - Mortgage One 6.30 - - -
BNZ - Rapid Repay 5.75 - - -
BNZ - Special - 4.25 4.19 4.49
BNZ - Std, FlyBuys 5.69 4.85 4.89 4.99
BNZ - TotalMoney 5.69 - - -
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 6.70 - - -
Credit Union Baywide 5.95 4.99 4.99 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 5.60 4.85 4.90 -
Housing NZ Corp 5.55 4.69 4.75 4.89
HSBC Premier 5.75 4.19 4.19 4.49
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.60 4.39 4.69 4.99
Kiwibank 5.45 4.70 4.75 4.49
Kiwibank - Capped - - - -
Kiwibank - Offset 5.50 - - -
Kiwibank Special - 4.19 4.29 -
Liberty - - - -
Napier Building Society 6.50 5.80 6.70 -
Nelson Building Society 6.10 4.85 4.99 -
NZ Home Loans 5.85 4.69 4.75 4.49
NZ Home Loans - Specials - - - -
Lender Flt 1yr 2yr 3yr
NZ Home Loans - Specials - 4.19 4.29 4.34
Perpetual Trust 7.70 - - -
Resimac 5.34 4.95 4.99 5.05
SBS Bank 5.69 4.75 4.89 4.99
SBS Bank Special - 4.25 4.15 4.55
Sovereign 5.65 4.69 4.75 4.89
Sovereign Special - 4.25 4.29 4.34
The Co-operative Bank 5.45 4.25 4.29 4.49
TSB Bank 5.54 4.75 4.75 4.99
TSB Special - 4.25 4.19 4.59
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 5.75 4.79 4.85 4.99
Westpac - Capped rates - 5.15 5.25 -
Westpac - Offset 5.75 - - -
Westpac Special - 4.25 4.29 4.49
Median 5.75 4.69 4.75 4.89

Last updated: 10 July 2016 11:42am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com