8.2 22%20Introduction%20to%20Company%20Taxation%202009

8.2 22%20Introduction%20to%20Company%20Taxation%202009 -...

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ACIS 254 6 MAY 2009 LECTURE 22: INTRODUCTION TO COMPANY TAXATION Introduction [NZT 14.1] 1 Why incorporate a company? ............................................................................................ 2 TOPIC 1: Company Tax Systems [NZT 14.2.1] 2 What different systems would be options? ........................................................................ 3 TOPIC 2. Company Formation [NZT 14.1-14.2; MTG 16-010 to 16-100] 3 Remuneration allocated to relatives [NZT 8.6.5] ............................................................... 4 TOPIC 3. Dividends [NZT 14.3.1-14.3.24; MTG 16-550 to 16-785] 4 Inter-Company Dividend Exemption: [NZT 14.3.23; MTG 16-800]. .................................. 5 TOPIC 4. Consolidation [NZT 14.7; MTG 20-010 to 20-080] 6 Why consolidate? .............................................................................................................. 6 Reading: New Zealand Taxation 2009: Chapter 14 Companies Introduction [NZT 14.1] For tax purposes a ‘company’ is defined as any body corporate or other entity that has a legal existence separate from that of its members, whether it is incorporated or created in New Zealand or elsewhere. This definition extends to any company incorporated under the Companies Act 1993 and includes any unit trust, a public or local authority, or Maori authority. The definition is found in section YA 1 ITA 2007. A corporate entity has a unique nature, and there are a number of rules that apply only to companies. These rules differ for different categories of companies. For tax purposes companies are categorised as follows: 1. Widely-Held : a company that has 25 shareholders or more (with associated shareholders counted as one) and is not a closely-held company. Such companies were previously known as public companies. 2. Close Company : a company that has five or fewer natural persons (with any associated natural persons being treated as one) who either hold voting interests, or where a market value circumstance exists, hold market value interests in the company of more than 50%. This does not include a special corporate entity. Such companies were previously called private or proprietary companies. 3. Closely-Held Company : a company that has five or fewer persons (with associated persons treated as one person) who hold direct voting interests or, where a market value circumstance exists, whose direct market value interests in the company is more than 50%. 4. Limited Attribution Company : any building society, co-operative company, listed company, widely held company, or limited attribution foreign company. 1
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5. Limited Attribution Foreign Company : a non-resident company or a company resident in New Zealand that, under a double tax agreement, is treated as not being resident in New Zealand and is not a closely-held company. 6.
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This note was uploaded on 12/23/2009 for the course BCOM ACIS 254 taught by Professor Alistairhodson during the Spring '09 term at Canterbury.

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8.2 22%20Introduction%20to%20Company%20Taxation%202009 -...

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