Income tax Dates
Qualifying company requirements
To remain a qualifying company you must meet all these requirements for the entire income year. The company must:
- be a New Zealand resident company for the whole year (and not treated as a non resident due to a double tax agreement)
- have no more than 5 shareholders, unless it is purely a flat-owning company.
The company must not:
- be a unit trust
- be a foreign, look-through or loss attributing qualifying company (LAQC)
- get more than NZ$10,000 in foreign sourced non dividend income each year
- be treated as a non resident under a double tax agreement
- have to pay income tax in any other tax jurisdiction.
Qualifying companies must not have:
- income interests in a controlled foreign company
- interests in foreign investment funds that produce direct income interest of 10% or more.
Shareholders of qualifying companies
Each shareholder must be one of the following:
- a natural person
- another qualifying company
- a trustee of a trust whose beneficiaries are natural people or qualifying companies, and that pays all dividends it gets from the qualifying company to the beneficiaries as income.
Shareholders must personally pay any income tax that the company does not pay. The shareholders will share the company's income tax based on their shares in the company.
Shareholders need to maintain minimum voting interests of at least 50% for the period beginning on 30 March 2017 and ending on the last day of the relevant income year.
Remaining a qualifying company
If there's a change in company shareholding, any new shareholder must choose for the company to remain a qualifying company, if they have not already done so. This is called a re-election.
Re-elections need to be made by shareholders or someone who has enduring power of attorney. No one else can re-elect on behalf of the shareholder.
Members that need to sign the re-election are:
- any new shareholders who have not previously elected into qualifying company status
- shareholders that have regained shares after ceasing to own shares
- any new trustee in a trust shareholder.
There is a 63 day grace period for a company to re-elect. If a shareholder dies, a new shareholder has a 365 day grace period to re-elect after the death.
If we do not receive a re-election form in time then the qualifying company's status is automatically revoked - it stops being a qualifying company. Revocations are backdated to the start of the year where the shareholding change happened. They can apply to later years if we are notified.