On 15 September 2015, the New Zealand government issued an officials’ issues paper for public comment concerning the tax consequences of the loss grouping regime and the imputation credit regime for dividends.
Issues arise when the two regimes interact where a non-wholly owned profit company is grouped with a loss company. Because less tax is paid, the profit company may not have enough imputation credits to fully impute dividends paid to a minority shareholder, resulting in an extra tax bu…