Our publications target topics that are relevant to commercial structuring. Our previous articles focused on the new look through company regime, zero rating of land transactions and discussed issues with specific industries, eg retirement homes and Foreign trusts and pre-migration trusts are also covered.
If there are particular areas of interest to you, in the context of commercial structuring, please let us know and we will address it in a forthcoming publication.
Company Structuring Hammered by Taxman Again
The IRD has had another resounding win in the company structuring area. At issue was the choice by a foreign parent company to fund its New Zealand subsidiary by zero interest convertible notes (OCNs). New Zealand's tax rules resulted in the New Zealand subsidiary becoming entitled to a tax deduction for notional interest. The IRD argued that funding the subsidiary in this way was tax avoidance. It won that argument in the High Court – details below.
Foreign owned companies must have a resident agent
Multi-nationals with a New Zealand subsidiary have long benefited from the flexibility around officer representation here. There is presently no requirement for a New Zealand subsidiary to have a local director or other agent. This is proposed to change – details below.
Criminal Liability for Directors
Proposals are afoot for new criminal sanctions to be imposed on directors for breaches of certain directors' duties. Directors have faced criminal liability for some considerable time in relation to capital and debt funding activities (evidenced by the influx of criminal charges against directors of failed finance companies). But these proposed measures add greatly to a director's risk profile. Read on for more.
Removal of the ability to access losses of a qualifying company (QC) (effectively replaced by the "look through" company regime) has in many cases made existing QCs redundant. Some have opted to amalgamate with other group companies. There are traps in doing so however as discussed below.
Is Europe really a basket case?
I recently read an excellent article by a leading economist on the point. In short his answer is yes and that the more problematic countries have no option but to balance their books. The problem has been accentuated by the much reduced US demand for European exports. If you are interested in a description of how the European nations have found themselves in this spot let me know and I will send you the article.
Ownership of Intellectual Property Rights in an IP Holding Company.
How does the efficiency of New Zealand's international freight services impact your business?
The Productivity Commission has released its draft report on its International Freight Services inquiry.