Investing into a US limited liability company – New Zealand tax consequences
These five Public Rulings and the accompanying commentary set out the income tax treatment and availability of foreign tax credits or other forms of double taxation relief for New Zealand investors in a United States limited liability company (US LLC) that is taxed on a fiscally transparent basis as a partnership in the US, but as a foreign company in New Zealand. The Rulings demonstrate the respective tax treatments where the interest in the US LLC is classified as under the foreign investment fund (FIF) threshold, a FIF or a controlled foreign company (CFC); where different FIF methods are used and where there is a non-attributing active FIF or CFC.
2014 Delaware Code, § 18-503
Double Taxation Relief (United States of America) Order 1983, arts 1, 22
Income Tax Act 2007, ss BD 3, CB 1, CD 1, CD 3, CD 4 to CD 6, CD 18, CD 36, CQ 1, CQ 2, CQ 4, CQ 5, CQ 6, CW 9, CX 57B, EX 1, EX 14 to EX 17, EX 21B, EX 28 to EX 44, EX 46, EX 50, EX 51, EX 59, subpart FH, HG 2, LJ 1, LJ 2, LJ 4, LK 1, LK 4, LK 5, subpart OE, YA 1 (“company”, “foreign company”, “partnership”, “share”)
Internal Revenue Code (US), §§ 701, 703
Limited Liability Company Act (Delaware), §§ 18-201, 18-502, 18-701
Partnership Law Act 2019, s 8
Tax Administration Act 1994, s 93C
Alliance Group Ltd v CIR [1995] 17 NZTC 12,066 (HC)
Anson v Commissioners for HMRC [2015] UKSC 44
CIR v Albany Food Warehouse [2009] 24 NZTC 23,532 (HC)
Mills v Dowdall [1983] NZLR 154 (CA)