You might have read about CFC and/or FIF disclosures when filling out your IR3 form online. A Controlled Foreign Company (CFC) is a company based overseas, in which a resident(s) of New Zealand owns a controlling portion.
CFC FIF disclosure involves letting the IRD know if you hold a controlling interest in a foreign company so that you can be taxed appropriately. This could be relevant to you if you are a New Zealand resident and:
You have total ownership of a foreign company.
Five or fewer New Zealand residents have a controlling interest of more than 50% or control shareholder decision rights.
You have a controlling interest of 40% or more.
If you invest in foreign companies through Hatch, unless you own 50% of total Amazon shares, for example (congratulations if you do), you likely won’t have to worry about having to complete a FIF disclosure.
If you hold an income interest of less than 10% in a foreign company then you are usually exempt from this requirement. Check the list of exemptions on page 20 of the IR461 Guide to FIF PDF.
For more information on CFC FIF disclosure, or to file a CFC disclosure, head to the Inland Revenue website’s section on controlled foreign companies.