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Income Tax Act 2007
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Income Tax Act 2007
| Public Act | 2007 No 97 |
| Date of assent | 1 November 2007 |
Contents
BD 1 Income, exempt income, excluded income, nonresidents' foreign-sourced income, and assessable income
Exclusions for residential land
Exclusions for business premises
CD 33 Payments corresponding to notional distributions of producer boards and co-operative companies
Attributed repatriation calculation rules
Restrictive covenants and exit inducement payments
Matching rules: revenue account property, prepayments, and deferred payments
Avoidance and non-market transactions
Interest apportionment on thin capitalisation
Attributed controlled foreign company income
Foreign investment fund income
Transfers to or from superannuation funds and superannuation schemes
Treatment of amounts when superannuation fund becomes superannuation scheme or vice versa
Treatment of distributions when superannuation fund wound up
Income from business or trade-like activities
CW 1 Forestry companies established by the Crown, Maori owners, and holding companies buying land with standing timber from founders
Income from holding property (excluding equity)
Certain income of transitional resident
Income from living allowances, compensation, and government grants
Income from certain activities
CX 55 Proceeds from certain disposals by portfolio investment entities or New Zealand Superannuation Fund
CX 56 Portfolio investor allocated income and distributions of income by portfolio investment entities
Transactions between companies in consolidated groups
CZ 5 Exempt interest: overseas money lent to government or local or public authority before 29 July 1983
CZ 13 Treatment of units and interests in unit trusts and group investment funds on issue as at 1 April 1996
Financial arrangements adjustments
Matching rules: revenue account property, prepayments, and deferred payments
DB 49 Adjustment for opening values of trading stock, livestock, and excepted financial arrangements
Use of motor vehicle under certain arrangements
DB 56 Expenditure incurred in operating motor vehicle under agreement or arrangement affected by section CX 7
Payments to spouses, civil union partners, or de facto partners
Avoidance and non-market transactions
Attributed controlled foreign company (CFC) loss
Foreign investment fund (FIF) loss
DP 8 Forestry business on land bought from the Crown, Maori owners, or holding company: no deduction
DP 9 Cost of acquiring timber: forestry business on land bought from the Crown, Maori owners, or holding company
Petroleum exploration expenditure
Petroleum development expenditure
DV 14 Amalgamated company: expenditure on improvements for farming, horticultural, aquacultural, and forestry businesses
Valuation of specified livestock
Valuation of non-specified livestock
Valuation of high-priced livestock
Meaning of depreciable property
How amounts of depreciation loss and depreciation recovery income are calculated
Amount of depreciation loss under diminishing value method or straight-line method
Amount of depreciation loss under pool method
EE 25 Depreciation loss for plant variety rights application granted in 2005–06 or later income year
Improvements, items of low value, or items no longer used
Transfers of depreciable property: associated persons and certain amalgamations
Main income equalisation scheme
Adverse event income equalisation scheme
Thinning operations income equalisation scheme
Refunds: general provisions, and tax credits
EH 77 Sections of main income equalisation scheme that apply to thinning operations income equalisation scheme
Research, development, and resulting market development
Meaning of financial arrangement and excepted financial arrangement
Application of financial arrangements rules
Calculation and allocation of income and expenditure over financial arrangement’s term
Consideration when financial arrangement involves property or services
EW 32 Consideration for agreement for sale and purchase of property or services, hire purchase agreement, specified option, or finance lease
Consideration treated as paid to person
Consideration treated as paid by person
Consideration when legal defeasance has occurred
Consideration when anti-avoidance provision applies
Income and deduction provisions specifically related to financial arrangements
Treatment of original share acquired under financial arrangement
Application of financial arrangements rules to cash basis persons
Controlled foreign company (CFC) rules
When is a company a controlled foreign company?
Calculation of person’s control interest
Calculation of person’s income interest
Ten percent threshold and variations in income interest level
Calculation of attributed CFC income or loss
Calculation of branch equivalent income or loss
Change of residence of companies
Ownership measurement concession
Anti-avoidance rule: stapled stock
Foreign investment fund (FIF) rules
What is a foreign investment fund?
Calculation of FIF income or loss
Relationship with other provisions in Act
EX 59 Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method
Cases of entry into and exit from FIF rules
Commissioner’s default assessment power
EY 19 Premium loading formulas: when life insurers not providing life insurance at start of income year
EY 29 Mortality profit formula: when life insurers not providing life insurance at start of income year
EZ 11 Amounts of depreciation recovery income and depreciation loss for part business use up to 2004–05 income year
EZ 12 Amount of depreciation loss for item acquired from associated person on or before 23 September 1997
EZ 13 Annual rate for item acquired on or after 1 April 1993 and before end of person’s 1994–95 income year
EZ 18 Section EZ 17 amount of depreciation loss when items transferred between companies in wholly-owned group before 1 April 1993
EZ 19 Section EZ 17 amount of depreciation loss when person previously exempt from tax acquires item
EZ 23 Economic rate for plant or equipment acquired before 1 April 2005 and buildings acquired before 19 May 2005
Controlled foreign company and foreign investment fund rules
Old financial arrangements rules
EZ 47 Election to continue to treat certain excepted financial arrangements as financial arrangements
EZ 49 Determination of core acquisition price where consideration for property denominated in foreign currency
Exceptions for property transferred on death of person
Debt percentage of New Zealand group
Debt percentage of worldwide group
Determining membership of groups
Measuring ownership interests in companies
Membership and debt percentages of foreign groups
Calculating taxable income for consolidated group returns
Accounting for particular property
Treatment of foreign dividends
Membership of consolidated groups
Forming, joining, or leaving consolidated groups
When membership starts and stops
Treatment of shares, income, expenditure, and bad debts
Property passing to amalgamated company on amalgamation
Treatment of financial arrangements between amalgamating companies
Arrangements involving dividend stripping
Arrangements involving transfer pricing
Arrangements involving tax losses
Arrangements to defeat continuity provisions
Arrangements involving qualifying companies
Arrangements involving controlled foreign companies
Arrangements involving foreign investment funds
Arrangements involving film rights
Arrangements involving petroleum mining
Arrangements involving financial arrangements
Arrangements involving trust beneficiary income
Arrangements involving repatriation of commercial bills
Attribution rule for income from personal services
Arrangements involving restrictive covenants
Arrangements involving fringe benefit tax
Arrangements involving depreciation loss
Arrangements involving imputation rules
Arrangements involving foreign dividends
Arrangements involving Maori authority credits
Arrangements involving family support credits
Arrangements involving money not at risk
Arrangements involving returning share transfers
Disposals of trading stock or similar property
Treatment of profits, dividends, and tax losses
Special tax matters for loss-attributing qualifying companies
Elections: qualifying companies
Elections: loss-attributing qualifying companies
Qualifying company election tax
Effective interests in qualifying companies
Tax treatment of amounts that beneficiaries derive from trusts
Tax treatment of trustee income
Settlors and their liabilities
Treatment of transition situations
Valuation of property, trading stock, and financial arrangements
Rate and payment of income tax
Eligibility requirements: portfolio investment entities and foreign investment vehicles
Becoming and ceasing to be portfolio investment entity
Periods relevant to calculation of portfolio entity tax liability
Allocation of income in some cases
Calculating portfolio entity tax liability
HL 20 Portfolio class taxable income and portfolio class taxable loss for portfolio allocation period
Payment by portfolio tax rate entity of tax for tax year
HL 27 Treatment of portfolio investor allocated loss for zero-rated portfolio investors and investors with portfolio investor exit period
Treatment of losses for entity
Partnerships and joint ventures
Tax loss components carried forward
Tax credits for persons on low incomes
Tax credits for transitional circumstances
Adjustments to certain tax credits
Use of credits in later tax years
Treatment of taxable distributions
Supplementary dividend holding companies
Underlying foreign tax credits
Credits for certain non-resident investment companies
Credits for interest on home vendor mortgages
Credits for savings in special home ownership accounts
Shareholder continuity requirements
Treatment of credits and debits on resident’s restricted amalgamation
Amalgamation of companies in consolidated groups
Imputation credits attached to dividends
Distributions of statutory producer boards and co-operative companies
Tables of credits and debits in memorandum accounts
FDP credits attached to dividends
CTR credits attached to dividends
Table O5: conduit tax relief credits
Table O6: conduit tax relief debits
Companies with branch equivalent tax accounts
Persons with branch equivalent tax accounts
Table O7 branch equivalent tax credits
Table O8 branch equivalent tax debits
Table O9 person's equivalent tax credits
Table O10 person's equivalent tax debits
Companies with policyholder credit accounts
Policyholder credits of PCA company
Policyholder debits of PCA company
Persons with policyholder credit accounts
Policyholder credits of PCA person
Policyholder debits of PCA person
Table O13 policy holder credits
Table O15 person's policyholder credits
Table O16 person's policyholder debits
Maori authority credits attached to distributions
Table O17 Maori authority credits
Table O18 Maori authority debits
Consolidated groups and imputation credit accounts
Imputation credits of consolidated imputation groups
Imputation debits of consolidated imputation groups
Table O19 imputation credits of consolidated imputation groups
Table O20 imputation debits of consolidated imputation groups
Consolidated groups and FDP accounts
FDP credits of consolidated FDP groups
FDP debits of consolidated FDP groups
Table O21 : credits of consolidated FDP groups
Table O22 : FDP debits of consolidated FDP groups
Consolidated groups and CTR credits
CTR credits of consolidated groups
CTR debits of consolidated groups
Consolidated groups’ FDP payments and refunds
Table O23 : conduit tax relief credits of consolidated groups
Table O23 : conduit tax relief debits of consolidated groups
Consolidated groups and branch equivalent tax accounts
Branch equivalent tax credits of consolidated BETA groups
Branch equivalent tax debits of consolidated BETA groups
Table O25 : branch equivalent tax credits of consolidated BETA groups
Table O26 : branch equivalent tax debits of consolidated BETA groups
Consolidated groups and policyholder credit accounts
Policyholder credits of consolidated groups
Policyholder debits of consolidated groups
Payment and withholding obligations
Application of other provisions
Calculating provisional tax liability
Instalments of provisional tax
Requirements for using GST ratio
When persons start or stop paying GST, or change taxable periods
Treatment of groups of companies and amalgamated companies
Attribution rule for income from personal services
PAYE rules and PAYE income payments
Adjustments for certain PAYE income payments
Fringe benefit tax (FBT) rules and fringe benefits
Attributing fringe benefits to employees
Taxable value of fringe benefits
Employer’s superannuation contribution tax (ESCT) rules and employer’s superannuation contributions
Tax on certain withdrawals from superannuation funds
Limits on refunds and transfers
Companies receiving foreign dividends
Persons with policyholder credit accounts
Certain unit trusts and group investment funds
Obligations and treatment of PAYE intermediaries
PAYE intermediaries’ responsibilities
YA 3 Treatment of qualifying company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax
Table Y1 Associated person rules
Voting and market value interests
Voting and market value interests: modifications for continuity provisions
The Parliament of New Zealand enacts as follows:
Part O
Memorandum accounts
Subpart OA—General provisions
Introductory provisions
OA 1 What this Part does
-
This Part provides some rules of general application for recording amounts as credits and debits to a memorandum account.
Defined in this Act: memorandum account,
OA 2 Memorandum accounts
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Types of account in this Part
(1) The following accounts are dealt with in this Part
(a) an imputation credit account, seesubparts OB and OP:
(b) a foreign dividend payment (FDP) account, seesubparts OC and OP:
(c) a conduit tax relief (CTR) account, seesubparts OD and OP:
(d) a branch equivalent tax account, seesubparts OE and OP:
(e) an available subscribed capital (ASC) account, seesubpart OF:
(f) a policyholder credit account, seesubparts OJ and OP:
(g) a Maori authority credit account, seesubpart OK.
Role of accounts
(2) A memorandum account is an account listed in subsection (1) that provides a record of the credits and debits arising in the account.
Tax year
(3) A memorandum account is maintained for a tax year unless a provision in this Part expressly states otherwise.
Tables
(4) The credits and debits that arise in a memorandum account are listed in tables in each of the subparts. The tables—
(a) state the credits and the debits; and
(b) provide the credit dates and the debit dates; and
(c) refer to the section that fully defines the credits and debits, and their credit dates and debit dates.
Determination
(5) The Commissioner may issue a determination under section 104B of the Tax Administration Act 1994 adjusting the amount of a credit or debit, or a credit date or debit date recorded in a memorandum account if the Commissioner considers the amount or date is not correct. The determination may be reviewed in challenge proceedings under Part 8A of that Act.
Defined in this Act: ASC account, branch equivalent tax account, Commissioner, CTR account, FDP account, imputation credit account, Maori authority credit account, memorandum account, policyholder credit account, tax year,
Compare: 2004 No 35 ss ME 1(1), ME 3(1), ME 10(1), (1A)–(1C), ME 15, ME 17(1), ME 20, ME 21(1), ME 22(1), ME 25, ME 26(2), ME 40, MF 1(1), MF 3(1), MF 6, MF 7(1), MF 11(1), MF 12(1), MG 2(1), MG 3(1), MG 12, MG 13(1), MG 14(1), MG 15(1), MI 2(1), (4), MI 3(1), MI 14, MI 17(1), MI 18(1), MJ 1(1), MJ 3(1), MJ 8, MK 1(1), MK 3(1), MK 9
OA 3 General rules for maintaining memorandum accounts
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What this section does
(1) This section sets out the rules that apply in relation to a memorandum account to a person who—
(a) is required to maintain a memorandum account; or
(b) may choose to maintain an account.
Record
(2) A person who maintains a memorandum account must record all credits and all debits that arise in the account as at their credit date or debit date. The credits and debits are listed in provisions in the relevant subpart for each type of memorandum account.
Credit balances
(3) The credit balance recorded in a memorandum account during a tax year or income year, as applicable, is the excess of credits over debits.
Debit balances
(4) The debit balance recorded in a memorandum account during a tax year or income year, as applicable, is the excess of debits over credits.
Defined in this Act: amount, income year, memorandum account, tax year,
Compare: 2004 No 35 ss ME 2, ME 3(1), ME 16, ME 17(1), ME 22(1), ME 26, MF 2, MF 3(1), MF 8, MF 12(1), MG 1, MG 3(1), MG 14(1), MG 15(1), MI 1, MI 3(1), MI 17(1), MI 18(1), MJ 2, MJ 3(1), MK 2, MK 3(1)
OA 4 Certain credits and debits arising only in group accounts
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Certain credits or debits of a consolidated group may arise only in the memorandum account of the consolidated group and not in the memorandum account of a group company. Memorandum accounts of consolidated groups are dealt with in subpart OP (Memorandum accounts of consolidated groups).
Defined in this Act: company, consolidated group, memorandum account,
Compare: 2004 No 35 ss ME 13, ME 28(4), MF 9, MF 11(3), MG 16, MI 19
Credits and debits
OA 5 Credits
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What this section does
(1) This section defines the credits that arise under this Part in a memorandum account.
Imputation credits
(2) A credit is an imputation credit if it is an amount—
(a) set out in any of sections OA 7, OB 4 to OB 29, and OP 7 to OP 27:
(b) described in a row of table O1: imputation credits or table O19: imputation credits of consolidated imputation groups.
FDP credits
(3) A credit is an FDP credit if it is an amount—
(a) set out in any of sections OA 7, OC 6 to OC 12, and OP 56 to OP 63:
(b) described in a row of table O3: FDP credits or table O21: FDP credits of consolidated FDP groups.
CTR credits
(4) A credit is a CTR credit if it is an amount—
(a) set out in any of sections OA 7, OD 5 to OD 9, and OP 81 to OP 86:
(b) described in a row of table O5: CTR credits or table O23: CTR credits of consolidated groups.
Branch equivalent tax credits
(5) A credit is a branch equivalent tax credit if it is an amount,—
-
(a) for a branch equivalent tax account (BETA) company,—
(i) set out in any of sections OA 7 and OE 6 to OE 11:
(ii) described in a row of table O7: branch equivalent tax credits:
-
(b) for a BETA person,—
(i) set out in section OA 7 or OE 19:
(ii) described in a row of table O9: person’s branch equivalent tax credits:
-
(c) for a consolidated BETA group,—
(i) set out in any of sections OA 7 and OP 100 to OP 104:
(ii) described in a row of table O25: branch equivalent tax credits of consolidated BETA groups.
ASC credits
(6) A credit is an ASC credit if it is an amount—
(a) set out in section OA 7 or OF 4:
(b) described in a row of table O11: ASC credits.
Policyholder credits
(7) A credit is a policyholder credit if it is an amount,—
-
(a) for a policyholder credit account (PCA) company,—
(i) set out in any of sections OA 7 and OJ 3 to OJ 7:
(ii) described in a row of table O13: policyholder credits:
-
(b) for a PCA person,—
(i) set out in any of sections OA 7, OJ 14, and OJ 15:
(ii) described in a row of table O15: person’s policyholder credits:
-
(c) for a consolidated group with a policyholder credit account,—
(i) set out in any of sections OA 7 and OP 110 to OP 114:
(ii) described in a row of table O27: policyholder credits of consolidated groups.
Maori authority credits
(8) A credit is a Maori authority credit if it is an amount—
(a) set out in any of sections OA 7 and OK 2 to OK 9:
(b) described in a row of table O17: Maori authority credits.
Defined in this Act: amount, ASC credit, BETA company, BETA person, branch equivalent tax credit, CTR credit, consolidated BETA group, consolidated FDP group, consolidated group, consolidated imputation group, FDP credit, imputation credit, Maori authority credit, memorandum account, PCA company, PCA person, policyholder credit,
OA 6 Debits
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What this section does
(1) This section defines the debits that arise under this Part in a memorandum account.
Imputation debits
(2) A debit is an imputation debit if it is an amount—
(a) set out in any of sections OA 7, OB 30 to OB 59, OP 28 to OP 50, and OZ 3:
(b) described in a row of table O2: imputation debits or table O20: imputation debits of consolidated imputation groups.
FDP debits
(3) A debit is an FDP debit if it is an amount—
(a) set out in any of sections OA 7, OC 13 to OC 26, and OP 64 to OP 77:
(b) described in a row of table O4: FDP debits or table O22: FDP debits of consolidated FDP groups.
CTR debits
(4) A debit is a CTR debit if it is an amount—
(a) set out in any of sections OA 7, OD 10 to OD 19, and OP 87 to OP 94:
(b) described in a row of table O6: CTR debits or table O24: CTR debits of consolidated groups.
Branch equivalent tax debits
(5) A debit is a branch equivalent tax debit if it is an amount,—
-
(a) for a BETA company,—
(i) set out in any of sections OA 7 and OE 12 to OE 16:
(ii) described in a row of table O8: branch equivalent tax debits:
-
(b) for a BETA person,—
(i) set out in any of sections OA 7 and OE 20 to OE 22:
(ii) described in a row of table O10: person’s branch equivalent tax debits:
-
(c) for a consolidated BETA group,—
(i) set out in any of sections OA 7 and OP 105 to OP 108:
(ii) described in a row of table O26: branch equivalent tax debits of consolidated BETA groups.
ASC debits
(6) A debit is an ASC debit if it is an amount—
(a) set out in section OA 7 or OF 5:
(b) described in a row of table O12: ASC debits.
Policyholder debits
(7) A debit is a policyholder debit if it is an amount,—
-
(a) for a PCA company,—
(i) set out in any of sections OA 7 and OJ 8 to OJ 11:
(ii) described in a row of table O14: policyholder debits:
-
(b) for a PCA person,—
(i) set out in any of sections OA 7 and OJ 16 to OJ 18:
(ii) described in a row of table O16: person’s policyholder debits:
-
(c) for a consolidated group with a policyholder credit account,—
(i) set out in any of sections OA 7, OP 115, and OP 116:
(ii) described in a row of table O28: policyholder debits of consolidated groups.
Maori authority debits
(8) A debit is a Maori authority debit if it is an amount—
(a) set out in any of sections OA 7 and OK 10 to OK 18:
(b) described in a row of table O18: Maori authority debits.
Defined in this Act: amount, ASC debit, BETA company, BETA person, branch equivalent tax debit, CTR debit, consolidated BETA group, consolidated FDP group, consolidated group, consolidated imputation group, FDP debit, imputation debit, Maori authority debit, memorandum account, PCA company, PCA person, policyholder debit,
Opening balances
OA 7 Opening balances of memorandum accounts
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Balances carried forward
(1) The opening balance of a memorandum account at the start of a tax year or income year, as applicable, is the closing balance of the account in the previous tax year or income year, as applicable.
Credit date
(2) The credit date or debit date for an opening balance is,—
(a) for an imputation credit account, the first day of the tax year:
(b) for an FDP account, the first day of the tax year:
(c) for CTR account, the first day of the tax year:
-
(d) for branch equivalent tax account—
(i) of a BETA company, the first day of the tax year; or
(ii) of a BETA person, the first day of the income year; or
(iii) of a consolidated BETA group, the first day of the tax year:
(e) for an ASC account, the first day of the tax year:
-
(f) for a policyholder credit account—
(i) of a PCA company, the first day of the tax year; or
(ii) of a PCA person, the first day of the income year; or
(iii) of a consolidated group, the first day of the tax year:
(g) for a Maori authority credit account, the first day of the tax year.
First year
(3) If a consolidated group, company, or person starts a memorandum account during a tax year, no credit for an opening balance arises in the account. But this subsection does not apply—
(a) when the companies of 2 or more consolidated imputation groups choose to combine to form, or to join, an imputation group, for which seesection OP 3(2) (Changes in consolidated imputation groups):
(b) when the companies that are part of an imputation group choose to convert their status to that of a consolidated group that is a consolidated imputation group, for which seesection OP 3(3):
(c) to a resident imputation subgroup associated with a trans-Tasman imputation group, for which seesection OP 4 (Resident imputation subgroups).
Defined in this Act: ASC account, BETA company, BETA person, branch equivalent tax account, company, CTR account, consolidated BETA account, consolidated group, consolidated imputation group, FDP account, imputation credit account, imputation group, income year, Maori authority credit account, memorandum account, PCA company, PCA person, policyholder credit account, resident imputation subgroup, tax year, trans-Tasman imputation group,
Compare: 2004 No 35 ss ME 3(2), ME 10(1A)–(1C), (2), ME 17(2), ME 22(2), ME 26(1), MF 3(2), MF 8(1), MF 12(2), MG 3(2), MG 13(3), MI 3(2), MI 15, MJ 3(2), MK 3(2)
Shareholder continuity requirements
OA 8 Shareholder continuity requirements for memorandum accounts
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When this section applies
(1) This section applies when a company or a consolidated group maintains a memorandum account.
Shareholder continuity requirement
(2) An amount that is a credit in the account may be carried forward from a credit date to a later time only if the company or consolidated group that has the credit maintains a 66% continuity of shareholding under subsection (7) from the credit date to the later time. Subsections (4) and (5) override this subsection.
Continuity
(3) A credit is treated as continuing to exist to the extent to which it is not reduced by an earlier or later debit arising in the account.
Exclusions: ASC accounts and policyholder credit accounts
(4) Subsection (2) does not apply to an ASC account or a policyholder credit account.
Modification: CTR accounts
(5) The general rule in subsection (2) is modified by section OD 16 (CTRA increase in resident shareholding) for CTR accounts.
When continuity lost
(6) For a memorandum account and for a company or consolidated group that maintains the account when the continuity of shareholding required by subsection (7) is lost, a debit arises under the relevant section in each subpart only to the extent to which an unused amount of credit remains in the memorandum account. The relevant sections are—
(a) section OB 41 (ICA debit for loss of shareholder continuity):
(b) section OC 24 (FDPA debit for loss of shareholder continuity):
(c) section OE 15 (BETA debit for loss of shareholder continuity):
(d) section OK 15 (MACA debit for loss of shareholder continuity):
(e) section OP 42 (Consolidated ICA debit for loss of shareholder continuity):
(f) section OP 73 (Consolidated FDPA debit for loss of shareholder continuity):
(g) section OP 108 (Consolidated BETA debit for loss of shareholder continuity).
Shareholder continuity requirement
(7) The shareholder continuity requirement is that, while some or all of the credit still exists, a group of persons must continue to hold—
(a) aggregate minimum voting interests in a company or consolidated group of at least 66%; and
(b) if a market value circumstance exists for a company or, in the case of a consolidated group, a group company, aggregate minimum market value interests in the company or group of at least 66%.
Modifications
(8) The following rules apply for the purposes of subsection (7)
(a) the minimum interest referred to in subsection (7)(a) or (b) of a person must be counted if their interests change after the credit arises; and
(b) a credit retains its separate character and is not treated as part of a credit referred to in section OA 7 in a later tax year; and
-
(c) the amount by which a credit is reduced by an earlier or later debit is found by—
(i) treating debits as reducing credits in the order in which credits arise; and
(ii) counting an amount of a debit only once in the reduction of some or all of a credit; and
(iii) applying any relevant terminating modifications set out in section OZ 4 (Terminating modifications to debits for loss of shareholder continuity) for a credit arising before 1 April 1992.
Defined in this Act: amount, ASC account, branch equivalent tax account, company, CTR account, consolidated group, FDP account, group of persons, imputation credit account, Maori authority credit account, market value circumstance, market value interest, memorandum account, minimum market value interest, minimum voting interest, policyholder credit account, shareholder, tax year, voting interest,
Compare: 2004 No 35 ss ME 5(3), ME 12(1)(h), ME 13(2), (4), MF 4(5), MF 8(4), MG 15(1), MI 5(3)–(7), MI 18(1)(e), (3), (4), MK 5(3), (4)
Treatment of credits and debits on resident’s restricted amalgamation
General provision
OA 9 General treatment of credits and debits on resident’s restricted amalgamation
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When this section applies
(1) This section applies—
(a) on a resident’s restricted amalgamation, in relation to an amalgamated company and a memorandum account, if an amalgamating company ends its existence on the amalgamation and, at the time of the amalgamation, the amalgamating company maintains 1 or more memorandum accounts of the type referred to in sections OA 2(1)(a) to (d), and (f); and
(b) for the purposes of determining whether a credit or debit arises in the same type of account of the amalgamated company.
Treatment of pre-amalgamation credits and debits
(2) A credit or debit recorded in the memorandum account of the amalgamating company before the date of the amalgamation is treated as if it were recorded in the same type of account of the amalgamated company on the date it was recorded in the amalgamating company’s account with effect from the time of the amalgamation.
Treatment of pre-amalgamation period
(3) For the purposes of section OA 8(7)(b) and (8), in determining at a time after the amalgamation whether continuity of shareholding exists for the credit or debit in the memorandum account, the amalgamated company is treated for all times before the amalgamation as if—
(a) it did not separately exist; and
(b) it were instead the amalgamating company, with the same shareholders and option holders.
Avoidance provisions
(4) For the purposes of determining the credits and debits in the memorandum account of an amalgamating company, sections GB 34, GB 40, and GB 41 (which relate to arrangements to defeat the application of certain provisions) apply, modified as necessary.
Defined in this Act: amalgamated company, amalgamating company, consolidated group, memorandum account, resident’s restricted amalgamation, shareholder,
Compare: 2004 No 35 ss ME 29(1)(a), MF 16(1)(a), MG 17(1)(a), MI 13
When companies amalgamate
OA 10 When credits or debits due to amalgamating company but not recorded
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When this section applies
(1) This section applies on a resident’s restricted amalgamation if, at the time of the amalgamation, an amalgamating company maintains—
(a) an imputation credit account:
(b) an FDP account:
(c) a CTR account:
(d) a branch equivalent tax account:
(e) a policyholder credit account.
Credits and debits due
(2) A credit or a debit due to the amalgamating company but not recorded in its memorandum account before the date of amalgamation is recorded in the same type of memorandum account of the amalgamated company. Subsections (3) and (4) override this subsection.
Exclusion: shareholder continuity rules
(3) Subsection (2) does not apply to—
(a) a debit for loss of shareholder continuity in an imputation credit account arising under section OB 41 (ICA debit for loss of shareholder continuity) and described in table O2: imputation debits, row 14 (debit for loss of shareholder continuity):
(b) a debit for an increase in resident shareholding in a CTR account arising under section OD 16 (CTRA increase in resident shareholding) and described in table O6: CTR debits, row 8 (increase in resident shareholding):
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(c) a credit or debit in a branch equivalent tax account arising—
(i) under section OE 10 (BETA credit for loss of shareholder continuity) and described in table O7: branch equivalent tax credits, row 5 (credit for loss of shareholder continuity); and
(ii) under section OE 15 (BETA debit for loss of shareholder continuity) and described in table O8: branch equivalent tax debits, row 5 (debit for loss of shareholder continuity).
Recording in imputation credit account
(4) If the amalgamated company does not maintain a memorandum account referred to in subsection (1)(b), (c), and (e), the credit or debit is recorded in the imputation credit account of the amalgamated company. Seesections OA 11 to OA 13.
Defined in this Act: amalgamated company, amalgamating company, branch equivalent tax account, CTR account, FDP account, imputation credit, imputation credit account, imputation debit, memorandum account, policyholder credit account, resident’s restricted amalgamation,
Compare: 2004 No 35 ss ME 29(1), MF 16(1), MG 17(1), MI 13
OA 11 FDP account on resident’s restricted amalgamation
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When this section applies
(1) This section applies on a resident’s restricted amalgamation if—
(a) an amalgamating company ends its existence on amalgamation; and
(b) at the time of amalgamation, the company maintains an FDP account; and
(c) the amalgamated company does not maintain an FDP account.
Credits and debits due
(2) A credit or a debit due to the amalgamating company for the purposes of the FDP account but not recorded before the date of amalgamation is recorded in the imputation credit account of the amalgamated company, as appropriate,—
(a) under section OB 24 (ICA credit on resident’s restricted amalgamation) as described in table O1: imputation credits, row 22 (credit on resident’s restricted amalgamation); or
(b) under section OB 53 (ICA debit on resident’s restricted amalgamation) as described in table O2: imputation debits, row 26 (debit on resident’s restricted amalgamation).
Defined in this Act: amalgamated company, amalgamating company, FDP account, imputation credit account, resident’s restricted amalgamation,
Compare: 2004 No 35 s MG 17(1)
OA 12 CTR account on resident’s restricted amalgamation
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When this section applies
(1) This section applies on a resident’s restricted amalgamation if—
(a) an amalgamating company ends its existence on amalgamation; and
(b) at the time of amalgamation, the company maintains a CTR account; and
(c) the amalgamated company does not maintain a CTR account.
Credits and debits due
(2) A credit or a debit due to the amalgamating company for the purposes of the CTR account but not recorded before the date of amalgamation, is recorded in the imputation credit account of the amalgamated company, as appropriate,—
(a) under section OB 24 (ICA credit on resident’s restricted amalgamation) as described in table O1: imputation credits, row 22 (credit on resident’s restricted amalgamation); or
(b) under section OB 53 (ICA debit on resident’s restricted amalgamation) as described in table O2: imputation debits, row 26 (debit on resident’s restricted amalgamation).
Defined in this Act: amalgamated company, amalgamating company, CTR account, imputation credit account, resident’s restricted amalgamation,
Compare: 2004 No 35 s MI 13(6)
OA 13 Policyholder credit account on resident’s restricted amalgamation
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When this section applies
(1) This section applies on a resident’s restricted amalgamation if—
(a) an amalgamating company ends its existence on amalgamation; and
(b) at the time of amalgamation, the company maintains a policyholder credit account; and
(c) the amalgamated company does not maintain a policyholder credit account.
Credits and debits due
(2) A credit or a debit due to the amalgamating company for the purposes of the policyholder credit account but not recorded in the account before the date of amalgamation, is recorded in the imputation credit account of the amalgamated company, as appropriate,—
(a) under section OB 24 (ICA credit on resident’s restricted amalgamation) as described in table O1: imputation credits, row 22 (credit on resident’s restricted amalgamation); or
(b) under section OB 53 (ICA debit on resident’s restricted amalgamation) as described in table O2: imputation debits, row 26 (debit on resident’s restricted amalgamation).
Defined in this Act: amalgamated company, amalgamating company, imputation credit account, policyholder credit account, resident’s restricted amalgamation,
Compare: 2004 No 35 s ME 29(1)
Amalgamation of companies in consolidated groups
OA 14 Continuity of shareholding when group companies amalgamate
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What this section does
(1) This section and sections OA 15 to OA 17 apply when all the companies in a consolidated group or consolidated imputation group amalgamate on a resident’s restricted amalgamation, and the amalgamation results in—
(a) the end of the group’s existence; and
(b) the formation of an amalgamated company.
Other company
(2) The amalgamation may include a company that is not part of the consolidated group or consolidated imputation group.
Continuity of shareholding: credits and debits
(3) Subsections (4) and (5) apply for the purposes of determining whether a credit or debit arises in the memorandum account of the amalgamated company that is of the type referred to in section OA 2(1)(a), (b), (d), and (f).
Treatment of pre-amalgamation credits and debits
(4) A credit or debit recorded in the memorandum account of the consolidated group before the date of the amalgamation is treated as if it were recorded in the same type of account of the amalgamated company on the date it was recorded in the consolidated group’s account with effect from the date of amalgamation.
Treatment of pre-amalgamation period
(5) For the purposes of section OA 8(7)(b) and (8), in determining at a time after the amalgamation whether continuity of shareholding exists for the credit or debit in the memorandum account, the amalgamated company is treated for all times before the amalgamation as if—
(a) it did not separately exist; and
(b) it were instead the consolidated group, with the same shareholders and option holders.
Avoidance provisions
(6) For the purposes of determining the credits and debits in the memorandum account of a consolidated group, sections GB 34, GB 40, and GB 41 (which relate to arrangements to defeat the application of certain provisions) apply, modified as necessary.
Defined in this Act: amalgamated company, company, consolidated group, consolidated imputation group, memorandum account, resident’s restricted amalgamation, shareholder, voting interest,
Compare: 2004 No 35 ss ME 29(2)(a), MF 16(2)(a), MG 17(2)(a)
OA 15 When credits or debits due to consolidated group but not recorded
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When this section applies
(1) This section applies on a resident’s restricted amalgamation referred to in section OA 14 when, at the time of the amalgamation, a consolidated group maintains—
(a) an imputation credit account:
(b) an FDP account:
(c) a branch equivalent tax account:
(d) a policyholder credit account.
Credits and debits due
(2) A credit or a debit due to the consolidated group but not recorded in its account before the date of amalgamation is recorded in the same type of memorandum account of the amalgamated company. Subsections (3) and (4) override this subsection.
Exclusion: shareholder continuity rules
(3) Subsection (2) does not apply to—
(a) a debit for loss of shareholder continuity in an imputation credit account arising under section OP 42 (Consolidated ICA debit for loss of shareholder continuity) and described in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity):
(b) a debit for an increase in resident shareholding in a CTR account arising under section OP 91 (Consolidated CTRA increase in resident shareholding) and described in table O24: CTR debits of consolidated groups, row 6 (increase in resident shareholding):
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(c) a credit or debit in a branch equivalent tax account arising—
(i) under section OP 104 (Consolidated BETA credit for loss of shareholder continuity) and described in table O25: branch equivalent tax credits of consolidated BETA groups, row 5 (credit for loss of shareholder continuity); and
(ii) under section OP 108 (Consolidated BETA debit for loss of shareholder continuity) and described in table O26: branch equivalent tax debits of consolidated BETA groups, row 5 (debit for loss of shareholder continuity).
Recording in imputation credit account
(4) If the amalgamated company does not maintain a memorandum account referred to in subsection (1)(b) or (d), the credit or debit is recorded in the imputation credit account of the amalgamated company. Seesections OA 16 and OA 17.
Defined in this Act: amalgamated company, branch equivalent tax account, CTR account, consolidated group, FDP account, imputation credit account, policyholder credit account, resident’s restricted amalgamation, shareholder, voting interest,
Compare: 2004 No 35 ss ME 29(2)(b), MF 16(2)(b), MG 17(2)(b)
OA 16 When FDP account ends on resident’s restricted amalgamation
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When this section applies
(1) This section applies on a resident’s restricted amalgamation referred to in section OA 14 if—
(a) a consolidated group ends its existence on amalgamation; and
(b) at the time of amalgamation, the consolidated group maintains an FDP account; and
(c) the amalgamated company does not maintain an FDP account.
Credits and debits due
(2) A credit or a debit due to the group but not recorded before the date of amalgamation is recorded in the imputation credit account of the amalgamated company, as appropriate,—
(a) under section OB 24 (ICA credit on resident’s restricted amalgamation) as described in table O1: imputation credits, row 22 (credit on resident’s restricted amalgamation); or
(b) under section OB 53 (ICA debit on resident’s restricted amalgamation) as described in table O2: imputation debits, row 26 (debit on resident’s restricted amalgamation).
Defined in this Act: amalgamated company, consolidated group, FDP account, imputation credit account, resident’s restricted amalgamation, shareholder,
Compare: 2004 No 35 s MF 17(2)(b)
OA 17 When policyholder credit account ends on resident’s restricted amalgamation
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When this section applies
(1) This section applies on a resident’s restricted amalgamation referred to in section OA 14 if,—
(a) a consolidated group ends its existence on amalgamation; and
(b) at the time of amalgamation, the consolidated group maintains a policyholder credit account; and
(c) the amalgamated company does not maintain a policyholder credit account.
No policyholder credit account
(2) A credit or a debit due to the group but not recorded before the date of amalgamation is recorded in the imputation credit account of the amalgamated company, as appropriate,—
(a) under section OB 24 (ICA credit on resident’s restricted amalgamation) as described in table O1: imputation credits, row 22 (credit on resident’s restricted amalgamation); or
(b) under section OB 53 (ICA debit on resident’s restricted amalgamation) as described in table O2: imputation debits, row 26 (debit on resident’s restricted amalgamation).
Defined in this Act: amalgamated company, amalgamating company, consolidated group, imputation credit account, policyholder credit account, resident’s restricted amalgamation,
Compare: 2004 No 35 s ME 29(2)
Maximum permitted ratios
OA 18 Calculation of maximum permitted ratios
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When this section applies
(1) This section applies in relation to an imputation credit, an FDP credit, a CTR credit, and a Maori authority credit, for the purposes of the calculation of—
(a) an imputation ratio; and
(b) an FDP ratio; and
(c) a combined imputation and FDP ratio; and
(d) a CTR ratio; and
(e) a combined imputation and CTR ratio; and
(f) a Maori authority credit ratio.
Maximum permitted ratio
(2) A dividend or distribution with a credit attached must not have a ratio for the amount of the credit to the amount of the dividend or distribution that is more than the maximum permitted ratio calculated using the formula—
Definition of item in formula
(3) In the formula, tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for the income year corresponding to the tax year in which the dividend or distribution is paid.
Defined in this Act: amount, basic rate, combined imputation and CTR ratio, combined imputation and FDP ratio, CTR credit, dividend, FDP credit, imputation credit, income tax, income year, Maori authority credit ratio, maximum permitted ratio, tax year,
Compare: 2004 No 35 ss ME 8(1), MG 8(1), MG 10(1), MI 8(1), MK 7(1)
Subpart OB—Imputation credit accounts (ICA)
Introductory provisions
OB 1 General rules for companies with imputation credit accounts
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New Zealand resident
(1) A company that is resident in New Zealand (the imputation credit account (ICA) company) must establish and maintain an imputation credit account for a tax year. Subsections (2) and (3) override this subsection.
Exclusions
(2) A company that is resident in New Zealand is excluded from being an ICA company if it is—
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(a) a company that—
(i) is also resident in another country, except for a company referred to in subsection (3); or
(ii) is acting in the capacity of trustee, not being a company that is a trustee, of a group investment fund to which paragraph (c) of the definition of company in YA 1 (Definitions) applies; or
(iii) has a constitution that prohibits a distribution to a shareholder; or
(iv) derives only exempt income other than income exempt under sections CW 9 to CW 11 (which relate to income from equity); or
(v) under a double tax agreement, is treated as not being resident in New Zealand; or
(b) a Maori authority; or
(c) a local authority; or
(d) a Crown Research Institute; or
(e) a subsidiary of the Accident Compensation Corporation affected by section 266 of the Injury Prevention, Rehabilitation, and Compensation Act 2001, or section 334(1) of the Accident Insurance Act 1998; or
(f) a portfolio tax rate entity.
Exception to subsection (2): Australian resident
(3) Despite being excluded under subsection (2)(a)(i) and (v), a company that is resident in Australia may choose to be an Australian ICA company if it meets the requirements of section OB 2.
Defined in this Act: Australian ICA company, company, Crown Research Institute, double tax agreement, exempt income, group investment fund, ICA company, imputation credit account, income, local authority, Maori authority, New Zealand, portfolio tax rate entity, resident in Australia, resident in New Zealand, shareholder, tax, tax year, trustee,
Compare: 2004 No 35 s ME 1
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OB 2 Australian companies with imputation credit accounts
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When this section applies
(1) This section applies when a company that is resident in both New Zealand and Australia chooses under section OB 1(3) to be an Australian ICA company.
Ineligibility
(2) Despite meeting the residency requirements, a company is not eligible to make an election referred to in subsection (1) if—
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(a) the company—
(i) is a company referred to in section OB 1(2)(a)(ii) to (iv), and (c) to (e); or
(ii) is treated by a double tax agreement as resident in a country other than New Zealand or Australia for a taxation purpose in New Zealand or Australia; or
(b) an earlier election has been revoked by the Commissioner under subsection (7)(b), and the company has not shown the Commissioner that it has taken adequate steps to prevent the grounds of revocation occurring again.
Election, and when status starts
(3) The election is made by notifying the Commissioner, and the company must maintain an imputation credit account from the following date, as applicable:
(a) the first day of the tax year in which the Commissioner is notified:
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(b) for the purposes of section OB 60,—
(i) for a company that is formed or becomes eligible in the tax year, the first day of the tax year in which the Commissioner receives the notice and the Commissioner notifies the company of that date; or
(ii) if subparagraph (i) does not apply, 30 days after the date on which the Commissioner receives the notice.
Joint and several liability
(4) A company that is part of the same wholly-owned group of companies as an Australian ICA company may have joint and several liability with the Australian ICA company for further income tax, civil penalties, and interest under Part 7 of the Tax Administration Act 1994 imposed on the Australian ICA company for a breach by the Australian ICA company of the imputation rules.
Exclusion
(5) Despite subsection (4), no joint and several liability arises if the Australian ICA company is prohibited by an independent regulatory body from being subject to the liability.
Dividend in Australian currency
(6) An Australian ICA company that pays a dividend in Australian currency must make a currency conversion under section OB 60(6).
How status ends
(7) A company ends its status as an Australian ICA company if—
(a) the company becomes ineligible to maintain an imputation credit account; or
(b) the company revokes the election by notifying the Commissioner; or
(c) the Commissioner gives the company notice revoking the election.
When status ends
(8) For the purposes of subsection (7), the company ends its status as an Australian ICA company—
(a) from the day on which the relevant circumstance of ineligibility in subsection (2) applies; or
(b) unless paragraph (c) applies, from the last day of the tax year in which the company or the Commissioner revokes the election; or
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(c) for the purposes of section OB 60,—
(i) when the company notifies the Commissioner, on the date on which the Commissioner receives the notice; or
(ii) on the date set out in the Commissioner’s notice.
Outstanding obligations
(9) A company that stops being an Australian ICA company for a tax year must nevertheless satisfy all obligations that the company had as an Australian ICA company.
Defined in this Act: Australian ICA company, Commissioner, company, dividend, double tax agreement, imputation credit account, imputation rules, income, New Zealand, notice, notify, pay, resident in Australia, resident in New Zealand, tax year, wholly-owned group of companies,
Compare: 2004 No 35 s ME 1A
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OB 3 Imputation credit accounts
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General rules
(1) The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to an imputation credit account of an ICA company.
Consolidated imputation groups
(2) Under section OP 2 (When credits and debits arise only in group accounts), certain credits and debits do not arise in an ICA company’s memorandum account if the company is part of a consolidated imputation group.
Defined in this Act: consolidated imputation group, ICA company, imputation credit account, memorandum account,
Compare: 2004 No 35 s ME 13(1)
Imputation credits
OB 4 ICA payment of tax
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Credit
(1) An ICA company has an imputation credit for an amount of income tax or provisional tax paid. Subsection (3) overrides this subsection.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 2 (payment of tax).
No credit
(3) An ICA company does not have an imputation credit for an amount of—
(a) a transfer from a tax pooling account to a tax account with the Commissioner; or
(b) income tax paid on income derived when the company is not an ICA company; or
(c) income tax paid by a life insurer subject to section EY 48 (Non-resident life insurers with life insurance policies in New Zealand) to satisfy its policyholder base income tax liability; or
(d) income tax paid under sections LA 2 and LE 1 (which relate to tax credits for imputation credits and their use) by crediting an imputation credit; or
(e) income tax paid under sections LA 2 and LF 1 (which relate to tax credits for FDP credits and their use) by crediting a foreign dividend payment (FDP) credit; or
(f) income tax paid by a tax credit under subpart LP (Tax credits for supplementary dividends); or
(g) further income tax applied under section OB 69 to pay income tax or provisional tax; or
(h) income tax paid under section OE 7 (BETA payment of income tax) by crediting a branch equivalent tax credit; or
(i) income tax paid as a trustee, unless paid on category A income of the type described in paragraph (c) of the definition of company in section YA 1 (Definitions).
Credit date
(4) The credit date is the day the tax is paid.
Limitation on credits
(5) No amount may give rise to more than 1 imputation credit.
Defined in this Act: amount, branch equivalent tax account, category A income, Commissioner, company, tax credit, FDP credit, further income tax, ICA company, imputation credit, imputation credit account, income, income tax, life insurer, pay, policyholder base income tax liability, provisional tax, tax account with the Commissioner, tax pooling account, tax year, trustee,
Compare: 2004 No 35 s ME 4(1)(a), (1C), (2)(a)
OB 5 ICA deposit in tax pooling account
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Credit
(1) An ICA company has an imputation credit for an amount provided by it and paid by an intermediary into a tax pooling account.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 3 (deposit in tax pooling account).
Credit date
(3) The credit date is the day the amount is deposited.
Defined in this Act: amount, ICA company, imputation credit, imputation credit account, intermediary, pay, tax pooling account,
Compare: 2004 No 35 s ME 4(1)(ac), (2)(ac)
OB 6 ICA transfer from tax pooling account
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Credit
(1) An ICA company has an imputation credit for an amount that represents an entitlement to funds held in a tax pooling account and transferred by an intermediary to the company’s tax account with the Commissioner or refunded to the company.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 4 (transfer from tax pooling account).
Credit date
(3) The credit date is—
(a) the effective date under sections RP 19 and RP 20 (which relate to transfers from tax pooling account) if the amount is transferred to the company’s tax account with the Commissioner; or
(b) the day the refund is made to the company.
Defined in this Act: amount, Commissioner, ICA company, imputation credit, intermediary, tax account with the Commissioner, tax pooling account,
Compare: 2004 No 35 s ME 4(1)(ad), (2)(ad)
OB 7 ICA payment of further income tax
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Credit
(1) An ICA company has an imputation credit for an amount of further income tax paid under section OB 65 or OB 66.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 5 (payment of further income tax).
Credit date
(3) The credit date is the day the further income tax is paid.
Defined in this Act: amount, further income tax, ICA company, imputation credit, pay,
Compare: 2004 No 35 s ME 4(1)(c), (2)(a)
OB 8 ICA resident withholding tax withheld
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Credit
(1) An ICA company has an imputation credit for resident withholding tax (RWT) that is treated under section RA 9(1)(b) (Treatment of amounts withheld as received) as derived by the company.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 6 (amount of tax withheld for resident passive income).
Credit date
(3) The credit date is the day the amount of tax is withheld.
Defined in this Act: amount, amount of tax, ICA company, imputation credit, resident passive income, resident withholding tax, RWT,
Compare: 2004 No 35 s ME 4(1)(i), (2)(g)
OB 9 ICA dividend derived with imputation credit
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Credit
(1) An ICA company has an imputation credit for the amount of an imputation credit attached to a dividend derived by the company.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 7 (dividend derived with imputation credit).
Credit date
(3) The credit date is the day the dividend is paid to the company.
Defined in this Act: amount, dividend, ICA company, imputation credit, pay,
Compare: 2004 No 35 s ME 4(1)(d), (2)(c)
OB 10 ICA dividend derived with FDP credit
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Credit
(1) An ICA company has an imputation credit for the amount of an FDP credit attached to a dividend derived by the company when it is not a foreign dividend payment account (FDPA) company.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 8 (dividend derived with FDP credit).
Credit date
(3) The credit date is the day the dividend is paid.
Defined in this Act: amount, dividend, FDP credit, FDPA company, ICA company, imputation credit, pay,
Compare: 2004 No 35 s ME 4(1)(e), (2)(c)
OB 11 ICA payment of FDP
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Credit
(1) An ICA company has an imputation credit for an amount of FDP paid when the company is not an FDPA company. Subsection (3) overrides this subsection.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 9 (payment of FDP).
No credit
(3) No credit arises for a liability for FDP that is satisfied under section RG 6 (Using loss balances) by reducing a tax loss.
Credit date
(4) The credit date is the day the FDP is paid.
Defined in this Act: amount, FDP, FDPA company, ICA company, imputation credit, pay, tax loss,
Compare: 2004 No 35 s ME 4(1)(f), (2)(d), (3)
OB 12 ICA transfer from FDP account
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Credit
(1) An ICA company has an imputation credit for an amount equal to the amount of an FDP debit transferred from its FDP account under section OC 18 (FDPA transfer to imputation credit account).
Table references
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 10 (transfer from FDP account). The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 7 (transfer to imputation credit account).
Credit date
(3) The credit date is the day the amount is transferred.
Defined in this Act: amount, FDP account, FDP debit, ICA company, imputation credit,
Compare: 2004 No 35 s ME 4(1)(g), (2)(e)
OB 13 ICA transfer of debit balance on leaving wholly-owned group
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Election
(1) If the requirements of subsections (2) and (3) are met, an ICA company may choose to transfer a debit balance in its imputation credit account when the company stops being part of a wholly-owned group of companies.
Eligibility
(2) The company may make an election under subsection (1) if, at a particular time,—
(a) the company is or has recently been part of a wholly-owned group of companies; and
(b) the company is no longer part of the group, or will shortly no longer be part of the group; and
(c) the company has a debit balance in its imputation credit account; and
(d) the group has a loss balance carried forward from earlier tax years of more than $1,000,000 for the income year before the particular time.
Credit and debit
(3) The company may choose that an amount of no more than the debit balance is—
(a) an imputation credit in its imputation credit account; and
(b) an imputation debit in the imputation credit account of another company in the group after the date on which the company stops being part of the wholly-owned group.
Table references
(4) The imputation credit in subsection (3)(a) is referred to in table O1: imputation credits, row 11 (debit balance on leaving wholly-owned group). The imputation debit in subsection (3)(b) is referred to in table O2: imputation debits, row 17 (debit balance on leaving wholly-owned group).
Form and timing of election
(5) The company must make the election—
(a) in a form that the Commissioner may require; and
(b) with a notice of agreement from the group company in whose account the imputation debit arises under subsection (3)(b); and
(c) before the company stops being part of the wholly-owned group.
Further time
(6) For the purposes of subsection (5)(b), the Commissioner may allow further time in which to provide the notice if the company did not have sufficient information at the time it stops being part of the wholly-owned group.
Credit date
(7) The credit date is the day the company stops being part of the wholly-owned group.
Defined in this Act: amount, Commissioner, company, ICA company, imputation credit, imputation credit account, imputation debit, income year, notice, tax loss, wholly-owned group of companies,
Compare: 2004 No 35 ss ME 4(1)(cb), (2)(bb), ME 9B(1), (2)
OB 14 ICA payment of tax on leaving wholly-owned group
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Credit
(1) An ICA company has an imputation credit for a payment of imputation additional tax that it chooses to pay under section OB 71, excluding an excess tax payment applied under section OB 71(8).
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 12 (payment of tax on leaving wholly-owned group).
Credit date
(3) The credit date is the day the imputation additional tax is paid to the Commissioner.
Defined in this Act: amount, Commissioner, excess tax payment, ICA company, imputation additional tax, imputation credit, pay,
Compare: 2004 No 35 s ME 4(1)(cc), (2)(bc)
OB 15 ICA payment of tax on joining wholly-owned group
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Credit
(1) An ICA company has an imputation credit for a payment of imputation additional tax for which it is liable under section OB 72, excluding an excess tax payment applied under section OB 72(9).
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 13 (payment of tax on joining wholly-owned group).
Credit date
(3) The credit date is the day the imputation additional tax is paid to the Commissioner.
Defined in this Act: amount, Commissioner, excess tax payment, ICA company, imputation additional tax, imputation credit, pay,
Compare: 2004 No 35 s ME 4(1)(cd), (2)(bd)
OB 16 ICA attribution for personal services
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Credit
(1) An ICA company that is not a qualifying company has an imputation credit for an amount equal to 49.25% of the personal services attribution under section GB 29 (Attribution rule: calculation).
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 14 (attribution for personal services).
Credit date
(3) The credit date is the last day of the tax year for which the attribution is made.
Defined in this Act: amount, ICA company, imputation credit, imputation credit account, qualifying company, tax year,
Compare: 2004 No 35 s ME 4(1)(ab), (2)(ab)
OB 17 ICA transfer from policyholder credit account
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Credit
(1) An ICA company has an imputation credit for an amount equal to the amount of a debit under section OJ 9 (PCA transfer to imputation credit account) for a transfer of a credit balance from its policyholder credit account.
Table references
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 15 (transfer from policyholder credit account). The policyholder debit in subsection (1) is referred to in table O14: policyholder debits, row 3 (transfer to imputation credit account).
Credit date
(3) The credit date is the day the amount is transferred.
Defined in this Act: amount, ICA company, imputation credit, policyholder credit account,
Compare: 2004 No 35 s ME 4(1)(j), (2)(h)
OB 18 ICA transfer from ASC account
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Credit
(1) An ICA company has an imputation credit for the transfer of an amount from its available subscribed capital (ASC) account. The amount is calculated under section OF 5(4) (ASCA transfer to imputation credit account).
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 16 (transfer from ASC account).
Credit date
(3) The credit date is the day the amount is transferred.
Defined in this Act: amount, ASC account, ICA company, imputation credit, imputation credit account,
Compare: 2004 No 35 s ME 4(1)(da), (2)(ca)
OB 19 ICA transfer to master fund
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Credit
(1) An ICA company has an imputation credit for the transfer of an amount to a master fund. The amount is calculated using the formula—
expenditure transferred × tax rate.
Definition of items in formula
(2) In the formula,—
(a) expenditure transferred is the amount of expenditure transferred under sections DV 5 to DV 7 (which relate to the expenditure of investment funds) to the company as a master fund:
(b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits).
Table reference
(3) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 17 (transfer to master fund).
Credit date
(4) The credit date is the last day of the tax year corresponding to the income year in which the expenditure is deducted.
Defined in this Act: amount, basic rate, ICA company, imputation credit, imputation credit account, income tax, master fund,
Compare: 2004 No 35 s ME 4(1)(aab), (2)(aab)
OB 20 ICA distribution with Maori authority credit
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Credit
(1) An ICA company has an imputation credit for the amount of a Maori authority credit attached to a distribution received by the company.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 18 (distribution with Maori authority credit).
Credit date
(3) The credit date is the day the distribution is paid.
Defined in this Act: amount, ICA company, imputation credit, Maori authority credit, pay,
Compare: 2004 No 35 s ME 4(1)(ea), (2)(cb)
OB 21 ICA balance of Maori authority credit account
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Credit
(1) An ICA company has an imputation credit for an amount equal to the amount of a Maori authority debit under section OK 18 (MACA final balance) when the Maori authority stops being a Maori authority.
Table references
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 19 (balance of Maori authority credit account). The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 10 (final balance).
Credit date
(3) The credit date is the same as the debit date recorded for the debit under section OK 18.
Defined in this Act: amount, ICA company, imputation credit, Maori authority, Maori authority debit,
Compare: 2004 No 35 s ME 4(1)(k), (2)(k)
OB 22 ICA replacement payment to company under share-lending arrangement
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Credit
(1) An ICA company has an imputation credit for the amount of an imputation credit attached under section OB 64, or treated as attached under section RE 25 (When amount of tax treated as imputation credit) to a replacement payment paid under a share-lending arrangement to the company.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 20 (replacement payment under share-lending arrangement).
Credit date
(3) The credit date is the day the replacement payment is paid.
Defined in this Act: amount, ICA company, imputation credit, pay, replacement payment, share-lending arrangement,
Compare: 2004 No 35 s ME 4(1)(eb), (ec), (2)(cc)
OB 23 ICA credit transfer to company
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Credit
(1) An ICA company has an imputation credit for the amount of an imputation credit shown in a credit transfer notice given to the company.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 21 (credit in credit transfer notice).
Credit date
(3) The credit date is the day the notice is given.
Defined in this Act: amount, credit transfer notice, ICA company, imputation credit,
Compare: 2004 No 35 s ME 4(1)(ed), (2)(cd)
OB 24 ICA credit on resident’s restricted amalgamation
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Credit
(1) An ICA company has an imputation credit for the amount of a credit that arises on or after a resident’s restricted amalgamation in the imputation credit account of the amalgamated company under 1 of the sections listed in subsection (3).
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 22 (credit on resident’s restricted amalgamation).
Sections
(3) The sections are—
(a) section OA 10 (When credits or debits due to amalgamating company but not recorded) for imputation credits in the imputation credit account of an amalgamating company:
(b) section OA 11 (FDP account on resident’s restricted amalgamation) for an FDP credit in the FDP account of an amalgamating company because the amalgamated company does not maintain an FDP account:
(c) section OA 12 (CTR account on resident’s restricted amalgamation) for the conduit tax relief (CTR) credits in the CTR account of an amalgamating company because the amalgamated company does not maintain a CTR account:
(d) section OA 13 (Policyholder credit account on resident’s restricted amalgamation) for a policyholder credit in the policyholder credit account of an amalgamating company because the amalgamated company does not maintain a policyholder credit account:
(e) section OA 14 (Continuity of shareholding when group companies amalgamate) for imputation credits in the imputation credit account of a consolidated imputation group that ends its existence on the amalgamation:
(f) section OA 16 (When FDP account ends on resident’s restricted amalgamation) for an FDP credit in the FDP account of a consolidated FDP group because the amalgamated company does not maintain an FDP account:
(g) section OA 17 (When policyholder credit account ends on resident’s restricted amalgamation) for the policyholder credits in the policyholder credit account of a consolidated group because the company does not maintain a policyholder credit account.
Defined in this Act: amalgamated company, amalgamating company, amount, CTR account, CTR credit, consolidated FDP group, consolidated group, consolidated imputation group, FDP account, FDP credit, ICA company, imputation credit, imputation credit account, policyholder credit, policyholder credit account, resident’s restricted amalgamation,
Compare: 2004 No 35 ss ME 29, MG 17, MI 13
OB 25 ICA reversal of tax advantage arrangement
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When this section applies
(1) This section applies when it is established that an imputation credit in an ICA company’s imputation credit account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.
Credit
(2) The company has an imputation credit for an amount equal to the amount of a debit in the company’s imputation credit account under section OB 54.
Table references
(3) The imputation credit in subsection (2) is referred to in table O1: imputation credits, row 23 (reversal of tax advantage arrangement). The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 27 (tax advantage arrangement).
Credit date
(4) The credit date is the same as the debit date of the debit under section OB 54.
Defined in this Act: amount, arrangement, ICA company, imputation credit, imputation credit account, imputation debit, tax advantage,
Compare: 2004 No 35 s ME 4(1)(h), (2)(f)
OB 26 ICA elimination of double debit
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When this section applies
(1) This section applies when an imputation debit in an ICA company’s imputation credit account under section OB 41 has the effect of cancelling an imputation credit under section OB 5.
Credit
(2) The company has an imputation credit for an amount equal to the amount of the debit referred to in subsection (1), and either—
(a) another debit arises under section OB 34 for a refund of the amount of the deposit on a debit date after the debit date for the debit for loss of shareholder continuity; or
(b) the deposit is taken into account under section RP 19 (Transfers from tax pooling accounts) in determining the balance of the company’s tax account with the Commissioner after the debit date for the debit for loss of shareholder continuity.
Table references
(3) The table references are as follows:
(a) the imputation debit in subsection (1) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity):
(b) the imputation credit in subsection (1) is referred to in table O1: imputation credits, row 3 (deposit in tax pooling account):
(c) the imputation credit in subsection (2) is referred to in table O1: imputation credits, row 24 (elimination of double debit):
(d) the imputation debit in subsection (2)(a) is referred to in table O2: imputation debits, row 6 (refund from tax pooling account).
Credit date
(4) The credit date is the day—
(a) the deposit is refunded; or
(b) the credit arises in the company’s tax account with the Commissioner.
Defined in this Act: amount, Commissioner, ICA company, imputation credit, imputation credit account, imputation debit, shareholder, tax account with the Commissioner,
Compare: 2004 No 35 s ME 4(1A), (2A)
OB 27 ICA non-resident withholding tax withheld
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Credit
(1) An Australian ICA company has an imputation credit for an amount of tax withheld by the payer of non-resident passive income.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 25 (NRWT withheld).
Credit date
(3) The credit date is the day the amount of tax is withheld.
Defined in this Act: amount, amount of tax, Australian ICA company, imputation credit, non-resident passive income, non-resident withholding tax, NRWT,
Compare: 2004 No 35 s ME 4(1B)(a), (2B)(a)
OB 28 ICA payment of amount of tax for schedular payment
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Credit
(1) An Australian ICA company has an imputation credit for an amount equal to the amount of tax for a schedular payment paid to the company as a non-resident contractor.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 26 (amount of tax for schedular payment).
Credit date
(3) The credit date is the day the amount of tax is withheld.
Defined in this Act: amount, amount of tax, Australian ICA company, imputation credit, non-resident contractor, pay, schedular payment,
Compare: 2004 No 35 s ME 4(1B)(b), (2B)(b)
OB 29 ICA payment of schedular income tax
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Credit
(1) An Australian ICA company has an imputation credit for a payment of income tax relating to the company’s schedular income tax liability for income derived under section CR 3, CV 16, or CV 17 (which relate to non-resident insurers, shippers, and film renters).
Table reference
(2) The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 27 (payment of schedular income tax).
Credit date
(3) The credit date is the day the schedular income tax is paid.
Defined in this Act: Australian ICA company, company, imputation credit, income, pay, schedular income,
Compare: 2004 No 35 s ME 4(1B)(c), (2B)(c)
Imputation debits
OB 30 ICA payment of dividend
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Debit
(1) An ICA company has an imputation debit for the amount of an imputation credit attached to a dividend paid by the company.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 2 (payment of dividend).
Debit date
(3) The debit date is the day the dividend is paid.
Arrangement for dividend from another company
(4) Section GB 37 (Arrangements for payment of dividend by other companies) may apply to treat an amount as a debit under this section.
Defined in this Act: amount, dividend, ICA company, imputation credit, imputation debit, pay,
Compare: 2004 No 35 s ME 5(1)(a), (2)(a)
OB 31 ICA allocation of provisional tax
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Debit
(1) An ICA company has an imputation debit for an amount of provisional tax allocated by the company under section RC 32 (Wholly-owned groups of companies) to an underpaid company.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 3 (allocation of provisional tax).
Debit date
(3) The debit date is the day the Commissioner is notified of the allocation.
Defined in this Act: amount, Commissioner, company, ICA company, imputation debit, notify, provisional tax,
Compare: 2004 No 35 s ME 5(1)(d), (2)(d)
OB 32 ICA refund of income tax
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Debit
(1) An ICA company has an imputation debit for the amount of a refund of income tax paid to the company. Subsection (2) overrides this subsection.
No debit
(2) A debit under subsection (1) does not include—
(a) a refund of income tax paid for a period when the company was not an ICA company; or
(b) a refund of income tax paid before a debit arises under section OB 41, but only to the extent to which the amount of the refund is less than the amount of the debit; or
(c) a refund under subpart LP (Tax credits for supplementary dividends) because the supplementary dividend generating the refund was paid before a debit arises under section OB 41, but only to the extent to which the amount of the refund is less than the amount of the debit.
Table references
(3) The table references are as follows:
(a) the imputation debit in subsection (1) is referred to in table O2: imputation debits, row 4 (refund of income tax):
(b) the imputation debit in subsection (2)(b) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity):
(c) the imputation debit in subsection (2)(c) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity).
Part-year ICA company
(4) The amount of the debit that arises if the company is an ICA company for only part of a tax year is an amount calculated using the formula—
Definition of items in formula
(5) In the formula,—
(a) ICA days is the number of days in which the company is an ICA company:
(b) refund is the amount of the refund.
Debit date
(6) The debit date is the day the refund is made.
Defined in this Act: amount, company, ICA company, imputation debit, income tax, pay, shareholder, supplementary dividend, tax year,
Compare: 2004 No 35 s ME 5(1)(e), (2)(e)
OB 33 ICA amount applied to pay other taxes
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Debit
(1) An ICA company has an imputation debit for an amount of overpaid income tax applied to pay an amount due under the Inland Revenue Acts. subsection (3) overrides this subsection.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 5 (amount applied to pay other taxes).
No debit
(3) A debit under subsection (1) does not include an amount of overpaid income tax—
(a) applied to satisfy a liability for income tax or provisional tax; or
(b) relating to income tax paid before an imputation debit arises under section OB 41 (table O2: imputation debits, row 14 (debit for loss of shareholder continuity)), but only to the extent to which the amount of overpaid income tax is no more than the amount of the debit for loss of shareholder continuity.
Debit date
(4) The debit date is the day the amount is applied.
Defined in this Act: amount, ICA company, imputation debit, income tax, Inland Revenue Acts, pay, provisional tax, shareholder,
Compare: 2004 No 35 s ME 5(1)(l), (2)(k)
OB 34 ICA refund from tax pooling account
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When this section applies
(1) This section applies when an ICA company pays an intermediary an amount that gives rise to an imputation credit under the following sections, and the amount is later refunded by the intermediary from the tax pooling account:
(a) section OB 5 (table O1: imputation credits, row 3 (deposit in tax pooling account)); or
(b) section OB 6 (table O1: imputation credits, row 4 (transfer from tax pooling account)).
Debit
(2) The company has an imputation debit for the amount of the refund.
Table reference
(3) The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 6 (refund from tax pooling account).
Debit date
(4) The debit date is the day the refund is made.
Defined in this Act: amount, ICA company, imputation credit, imputation debit, intermediary, pay,
Compare: 2004 No 35 s ME 5(1)(ea), (2)(ea), (eb)
OB 35 ICA transfer within tax pooling account
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When this section applies
(1) This section applies when an ICA company pays an intermediary an amount that gives rise to an imputation credit under the following sections, and the entitlement to the amount is later transferred to another person in the tax pooling account:
(a) section OB 5 (table O1: imputation credits, row 3 (deposit in tax pooling account)); or
(b) section OB 6 (table O1: imputation credits, row 4 (transfer from tax pooling account)).
Debit
(2) The company has an imputation debit for a tax year for the amount of the transfer of the entitlement to funds in the tax pooling account.
Table reference
(3) The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 7 (transfer within tax pooling account).
Debit date for companies other than qualifying companies
(4) The debit date for a company that is not a qualifying company is—
(a) the last day of the previous tax year to the extent of the amount of the debit that is no more than the credit balance in the account on that date; or
(b) the day the refund is made to the extent of the remaining amount of the debit that is no more than the credit balance in the imputation credit account on the day of refund; or
(c) the last day of the previous tax year for the remainder of the debit.
Debit date for qualifying companies
(5) The debit date for a qualifying company is the day the refund is made.
Defined in this Act: amount, ICA company, imputation credit, imputation credit account, imputation debit, intermediary, pay, qualifying company, tax pooling account, tax year,
Compare: 2004 No 35 s ME 5(1)(eb), (2)(ea), (eb)
OB 36 ICA refund of FDP
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Debit
(1) An ICA company has an imputation debit for the amount of a refund of FDP paid to the company when it is not an FDPA company.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 8 (refund of FDP).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, FDP, FDPA company, ICA company, imputation debit, pay,
Compare: 2004 No 35 s ME 5(1)(g), (2)(g)
OB 37 ICA refund of tax credit
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Debit
(1) An ICA company has an imputation debit for the amount of a refund under section LA 6(2)(e) (Remaining refundable credits: PAYE, RWT, and certain other items) paid to the company when it is not an FDPA company.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 9 (refund of tax credit).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, FDPA company, ICA company, imputation debit, pay,
Compare: 2004 No 35 s ME 5(1)(h), (2)(e)
OB 38 ICA overpayment of FDP
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Debit
(1) An ICA company has an imputation debit for an amount of overpaid FDP applied to pay an amount due under the Inland Revenue Acts. This subsection applies only to a company at a time when it is not an FDPA company. subsection (3) overrides this subsection.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 10 (overpayment of FDP).
No debit
(3) The debit does not include an overpayment of FDP applied to satisfy a liability for income tax or provisional tax, or relating to a foreign dividend.
Debit date
(4) The debit date is the day the amount is applied.
Defined in this Act: amount, FDP, foreign dividend, ICA company, imputation debit, income tax, Inland Revenue Acts, pay, provisional tax,
Compare: 2004 No 35 s ME 5(1)(m), (2)(k)
OB 39 ICA transfer for net foreign attributed income
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Transfer of amount
(1) An ICA company that is also an FDPA company and a CTR company has an imputation debit for an amount relating to net foreign attributed income transferred from its imputation credit account to its FDP account as set out in subsection (2).
Debit and credit
(2) The amount transferred is—
(a) an imputation debit in the company’s imputation credit account; and
(b) an FDP credit in the company’s FDP account under section OC 9 (FDPA transfer for net foreign attributed income).
Table references
(3) The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 12 (transfer for net foreign attributed income). The FDP credit in subsection (2) is referred to in table O3: FDP credits, row 6 (transfer for net foreign attributed income).
Methods for calculating amount
(4) The amount transferred must be calculated under method 1 or method 2 as set out in this section.
Two methods
(5) The company must apply—
(a) method 1 set out in subsection (6) if it is an FDPA company and a CTR company for all of the tax year; or
(b) method 2 set out in subsection (7) if the company is not also an FDPA company for all of the tax year and a CTR company for all of the tax year.
Method 1
(6) Under method 1, the company must apply sections LQ 1 to LQ 4 (which relate to credits for conduit tax relief) as if—
(a) the amount transferred were conduit tax relief for the tax year; and
(b) the percentage of resident shareholders were substituted for the item percentage of shareholders in section LQ 1(2) and LQ 2(2); and
(c) the percentage of resident shareholders were calculated by subtracting the item percentage of shareholders from 100%.
Method 2
(7) Under method 2, the company must make the calculation under sections LQ 1 and LQ 2 as if the company were a CTR company and the item percentage of shareholders were 100%.
No transfer
(8) Despite subsection (4), if neither method can be applied, no transfer arises under this section.
Debit dates
(9) The debit date is—
(a) the last day of the tax year for the amount of the debit that is no more than the amount of provisional tax paid before that date for the income year that corresponds with the tax year; and
(b) the day the company files its return of income for the income year for the balance of the debit.
Defined in this Act: amount, CTR company, FDP account, FDP credit, FDPA company, foreign attributed income, ICA company, imputation credit account, imputation debit, income year, provisional tax, resident, return of income, shareholder, tax year,
Compare: 2004 No 35 s ME 5(1)(o), (2)(l), (6), (7)
OB 40 ICA attribution for personal services
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Debit
(1) An ICA company has an imputation debit for an amount of an attribution for personal services equal to the amount of an imputation credit under section OB 16.
Table references
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 13 (attribution for personal services). The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 14 (attribution for personal services).
Accounts adjusted
(3) A debit under subsection (1) is recorded in the imputation credit account only if the company has accounted for an attribution of income under section GB 29 (Attribution rule: calculation).
Debit date
(4) The debit date is the last day of the tax year that falls in the income year for which the company accounts in its financial statements for the attribution of income referred to in subsection (3).
Defined in this Act: amount, financial statements, ICA company, imputation credit, imputation credit account, imputation debit, income, income year, tax year,
Compare: 2004 No 35 s ME 5(1)(ia), (2)(ha)
OB 41 ICA debit for loss of shareholder continuity
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Debit
(1) An ICA company has an imputation debit for the amount equal to the amount of an imputation credit retained in the imputation credit account and unused before the date on which shareholder continuity is lost.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity).
Debit date
(3) The debit date is the day of loss of shareholder continuity.
Avoidance arrangements
(4) Section GB 34 (ICA arrangements for carrying amounts forward) may exclude a company from the application of this section.
Defined in this Act: amount, ICA company, imputation credit, imputation credit account, imputation debit, shareholder,
Compare: 2004 No 35 s ME 5(1)(i), (2)(h)
OB 42 ICA on-market cancellation
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Debit
(1) When an ICA company acquires its shares in an on-market cancellation, it has an imputation debit for an amount calculated using the formula—
Definitions of items in formula
(2) In the formula,—
(a) ASC per share excess is the amount distributed on the on-market cancellation that is more than the amount of the available subscribed capital per share calculated under the ordering rule:
(b) RWT rate is the basic rate set out in schedule 1, part D (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) applying at the time of the acquisition.
Table reference
(3) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 15 (on-market cancellation).
Negative result
(4) If the formula produces a negative result, the debit is treated as zero.
Debit date
(5) The debit date is the day the shares are acquired by the company in the on-market cancellation.
Defined in this Act: amount, available subscribed capital, ICA company, imputation debit, on-market cancellation, ordering rule, RWT, share,
Compare: 2004 No 35 s ME 5(1)(c), (2)(c)
OB 43 ICA breach of imputation ratio
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Debit
(1) An ICA company has an imputation debit for a breach of the benchmark dividend rules in section OB 61(5) for an amount calculated using the formula—
(net dividends × imputation ratio) − attached credits.
Definition of items in formula
(2) In the formula,—
(a) net dividends is the total amount of all dividends paid by the company during the tax year, excluding the amount of imputation credits and FDP credits attached to the dividends:
(b) imputation ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios) for an imputation credit or, if less, the greatest imputation ratio of dividends paid by the company for the tax year:
(c) attached credits is the total amount of all imputation credits attached to dividends paid by the company for the tax year.
Table reference
(3) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 16 (breach of imputation ratio).
Ratio change declaration
(4) A debit under subsection (1) does not arise if the company provides a ratio change declaration under section OB 61(6).
Debit date
(5) The debit date is the last day of the tax year.
Defined in this Act: amount, benchmark dividend, dividend, FDP credit, ICA company, imputation credit, imputation debit, imputation ratio, maximum permitted ratio, tax year,
Compare: 2004 No 35 s ME 5(1)(f), (2)(f)
OB 44 ICA debit on leaving wholly-owned group
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Debit
(1) An ICA company (company A) has an imputation debit for an amount equal to the amount of an imputation debit that another company (company B) chooses under section OB 13 as a debit to company A’s imputation credit account when company B leaves a wholly-owned group of companies.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 17 (debit balance on leaving wholly-owned group).
Debit date
(3) The debit date is the date when the company B stops being part of the wholly-owned group.
Defined in this Act: amount, company, ICA company, imputation credit account, imputation debit, wholly-owned group of companies,
Compare: 2004 No 35 ss ME 5(1)(fb), (2)(fb), ME 9B(2)(a)(i)
OB 45 ICA redemption debit
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Debit
(1) An ICA company has an imputation debit for the amount of a redemption debit.
When redemption debit arises
(2) A redemption debit arises when—
-
(a) a company that is not an Australian ICA company is—
(i) the manager of a unit trust; or
(ii) the trustee or manager of a group investment fund; and
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(b) the company derives a dividend on the redemption or cancellation of—
(i) a unit issued by the unit trust; or
(ii) an interest of an investor in the group investment fund; and
(c) the company has acquired the unit or interest in the ordinary course of its management activities for the unit trust or group investment fund; and
(d) the unit or interest had been acquired by the company on the same terms as those offered to the investors in the unit trust or group investment fund.
Calculating amount
(3) The debit is for the greater of the amounts described in subsections (4) and (6) calculated for the income year in which the company derived the dividend referred to in subsection (2)(b).
First amount
(4) The first amount is calculated using the formula—
credits attached − imputation debits.
Definition of items in formula
(5) In the formula in subsection (4), —
(a) credits attached is the total amount of all imputation credits and FDP credits attached to dividends derived in the circumstances set out in subsection (2) by the company for the income year:
-
(b) imputation debits is the total amount of all imputation debits arising for the income year under—
(i) section OB 41 in the company’s imputation credit account; or
(ii) section OP 42 (Consolidated ICA debit for loss of shareholder continuity) in the imputation credit account of the consolidated imputation group of which the company is part.
Second amount
(6) The second amount is calculated using the formula—
Definition of items in formula
(7) In the formula in subsection (6),—
(a) total dividends is the total amount of all dividends derived in the circumstances set out in subsection (2), including imputation credits and FDP credits attached to the dividends:
(b) taxable income is the taxable income of the company for the income year in which the dividends are derived:
(c) tax liability is the company’s income tax liability for the income year:
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(d) debits is the imputation credits attached to the dividends that have been cancelled by an imputation debit arising during the income year under —
(i) section OB 41 in the company’s imputation credit account; or
(ii) section OP 42 in the imputation credit account of the consolidated imputation group of which the company is part.
Table references
(8) The table references are as follows:
(a) the imputation debit in subsection (1) is referred to in table O2: imputation debits, row 18 (redemption debit):
(b) the imputation debit in subsection (5)(b)(i) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity):
(c) the imputation debit in subsection (5)(b)(ii) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity):
(d) the imputation debit in subsection (7)(d)(i) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity):
(e) the imputation debit in subsection (7)(d)(ii) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity).
Debit date
(9) The debit date is the date on which the company or the group’s nominated company files the return of income for the income year in which the dividend is derived.
Defined in this Act: amount, Australian ICA company, company, consolidated imputation group, dividend, FDP credit, group investment fund, ICA company, imputation credit, imputation credit account, imputation debit, income, income tax, income tax liability, income year, investor, nominated company, return of income, shareholder, tax, taxable income, trustee, unit trust,
Compare: 2004 No 35 s ME 41
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OB 46 ICA transfer from member fund
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Debit
(1) An ICA company has an imputation debit for an amount calculated using the formula—
expenditure transferred × tax rate.
Definition of items in formula
(2) In the formula,—
(a) expenditure transferred is the amount of expenditure transferred under sections DV 5 to DV 7 (which relate to expenditure related to investment funds) by the company, as a member fund, to a master fund:
(b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits).
Table reference
(3) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 19 (transfer from member fund).
Debit date
(4) The debit date is the last day of the tax year corresponding to the income year in which the expenditure is deducted.
Defined in this Act: amount, basic rate, ICA company, imputation debit, master fund, tax year,
Compare: 2004 No 35 s ME 5(1)(ja), (2)(ia)
OB 47 ICA transfer to policyholder credit account
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Election
(1) An ICA company that is also a policyholder credit account (PCA) company may, for a tax year,—
(a) choose to transfer some or all of a credit balance in the company’s imputation credit account to the company’s policyholder credit account; or
(b) be treated as choosing to transfer an imputation credit to the policyholder credit account.
Debit and credit
(2) A credit balance or credit transferred under this section is—
(a) an imputation debit in the company’s imputation credit account; and
(b) a policyholder credit under section OJ 3 (PCA transfer from imputation credit account) in the company’s policyholder credit account.
Table references
(3) The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 20 (transfer to policyholder credit account). The policyholder credit in subsection (2) is referred to in table O13: policyholder credits, row 2 (transfer from imputation credit account).
Method of election
(4) The company makes the election by recording the balance transferred as—
(a) a debit in the company’s imputation credit account; and
(b) a credit in the company’s policyholder credit account.
Election for some credits
(5) The company must make the election no later than the last day of the tax year for an amount of the credit balance that arises in the following circumstances:
(a) the company has adopted a non-standard accounting year; and
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(b) during the tax year the company derives a dividend that gives rise to a credit in the company’s imputation credit account under—
(i) section OB 9 (table O1: imputation credits, row 7 (dividend derived with imputation credit)); or
(ii) section OB 10 (table O1: imputation credits, row 8 (dividend derived with FDP credit)); and
(c) the credit is included in the credit balance because it has not been used, and no loss of shareholder continuity as required by section OA 8 (Shareholder continuity requirements for memorandum accounts) has occurred.
Mandatory transfer for company with non-standard accounting year
(6) Despite the absence of an election during the tax year, a company that has adopted a non-standard accounting year is treated as having chosen at the end of the tax year to transfer the credit described in subsection (7) from the imputation credit account to the policyholder credit account.
Credit
(7) The company is treated as having made an election for a tax year to the extent to which—
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(a) during the tax year, or no later than the end of the accounting year corresponding with the tax year, a credit arises under—
(i) section OB 4 (table O1: imputation credits row 2 (payment of tax)) for a payment of provisional tax; or
(ii) section OB 11 (table O1: imputation credits row 9 (payment of FDP)) for a payment of FDP; and
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(b) during the tax year, the credit has not been cancelled by a later debit arising under—
(i) section OB 32 (table O2: imputation debits row 4 (refund of income tax)) for a refund of provisional tax paid during the accounting year:
(ii) section OB 36 (table O2: imputation debits row 8 (refund of FDP)) for a refund of FDP paid during the accounting year; and
(c) the credit has not been included in a credit balance transferred by an election under subsection (4).
Ordering rule
(8) For the purpose of determining under subsection (7)(b) whether a debit has cancelled a credit, debits are treated as cancelling credits in the order in which the credits arise.
Credit and debit dates
(9) The credit dates and debit dates for the credit balance and credit transferred are—
(a) the day of election for the credit balance transferred under subsection (4); and
(b) the last day of the tax year for a credit that the company is treated as having chosen under subsection (5) to transfer.
Defined in this Act: accounting year, amount, dividend, FDP, FDP credit, ICA company, imputation credit, imputation credit account, imputation debit, income tax, non-standard accounting year, pay, PCA company, policyholder credit, policyholder credit account, provisional tax, shareholder, tax year,
Compare: 2004 No 35 ss ME 5(1)(b), (2)(b), ME 7
OB 48 ICA credit balance when Maori authority credit account starts
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Debit
(1) An ICA company has an imputation debit for a credit balance in the company’s imputation credit account immediately before the company becomes a Maori authority.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 21 (credit balance when Maori authority credit account starts).
Debit date
(3) The debit date is the day before the company becomes a Maori authority.
Defined in this Act: ICA company, imputation credit account, imputation debit, Maori authority,
Compare: 2004 No 35 s ME 5(1)(ka), (2)(ja)
OB 49 ICA replacement payment by company under share-lending arrangement
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Debit
(1) An ICA company has an imputation debit for the amount of an imputation credit attached under section OB 64 to a replacement payment paid by the company under a share-lending arrangement.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 22 (replacement payment under share-lending arrangement).
Debit date
(3) The debit date is the day the replacement payment is paid.
Defined in this Act: amount, ICA company, imputation credit, imputation debit, pay, replacement payment, share-lending arrangement,
Compare: 2004 No 35 s ME 5(1)(ab), (2)(ab)
OB 50 ICA returning share transfer
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Debit
(1) An ICA company has an imputation debit for the amount of an imputation credit attached to a dividend paid to the company as a share user in a returning share transfer that is not a share-lending arrangement.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 23 (returning share transfer).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: amount, dividend, ICA company, imputation credit, imputation debit, pay, returning share transfer, share-lending arrangement, share user,
Compare: 2004 No 35 s ME 5(1)(ac), (2)(ac)
OB 51 ICA credit transfer by company
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Debit
(1) An ICA company has an imputation debit for the amount of an imputation credit attached to a dividend that is paid to the company and shown in a credit transfer notice given by the company.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 24 (credit transfer notice).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: amount, credit transfer notice, dividend, ICA company, imputation credit, imputation debit, pay,
Compare: 2004 No 35 s ME 5(1)(ad), (2)(ac)
OB 52 ICA imputation credit of consolidated imputation group
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When this section applies
(1) This section applies when—
(a) an ICA company that is part of a consolidated imputation group has a credit in its imputation credit account; and
(b) a debit arises in the imputation credit account of the consolidated imputation group that is not cancelled by a credit in the imputation credit account arising before or on the same date as the company’s credit.
Debit
(2) The ICA company has an imputation debit for the amount of the imputation credit that is transferred to the imputation credit account of the consolidated imputation group.
Table reference
(3) The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 25 (credit of consolidated imputation group).
Debit date
(4) The debit date is the day on which the imputation credit is recorded in the imputation credit account of the consolidated imputation group.
Defined in this Act: amount, consolidated imputation group, ICA company, imputation credit, imputation credit account, imputation debit,
Compare: 2004 No 35 s ME 13(3)
OB 53 ICA debit on resident’s restricted amalgamation
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Debit
(1) An ICA company has an imputation debit for the amount of a debit described in subsection (3) that arises on or after a resident’s restricted amalgamation in the account of the amalgamated company under 1 of the sections listed in subsection (3).
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 26 (debit on resident’s restricted amalgamation).
Sections
(3) The sections are—
(a) section OA 10 (When credits or debits due to amalgamating company but not recorded) for imputation debits in the imputation credit account of an amalgamating company:
(b) section OA 11 (FDP account on resident’s restricted amalgamation) for FDP debits in the FDP account of an amalgamating company because the amalgamated company does not maintain an FDP account:
(c) section OA 12 (CTR account on resident’s restricted amalgamation) for the CTR debits in the CTR account of an amalgamating company because the amalgamated company does not maintain a CTR account:
(d) section OA 13 (Policyholder credit account on resident’s restricted amalgamation) for the policyholder debits in the policyholder credit account of an amalgamating company because the amalgamated company does not maintain a policyholder credit account:
(e) section OA 14 (Continuity of shareholding when group companies amalgamate) for imputation debits in the imputation credit account of a consolidated imputation group that ends its existence on the amalgamation:
(f) section OA 16 (When FDP account ends on resident’s restricted amalgamation) for FDP debits in the FDP account of a consolidated group because the amalgamated company does not maintain an FDP account:
(g) section OA 17 (When policyholder credit account ends on resident’s restricted amalgamation) for the policyholder debits on the policyholder credit account of a consolidated group because the amalgamated company does not maintain a policyholder credit account.
Defined in this Act: amalgamated company, amalgamating company, amount, consolidated group, consolidated imputation group, CTR account, CTR debit, FDP account, FDP debit, ICA company, imputation credit account, imputation debit, policyholder credit account, policyholder debit, resident’s restricted amalgamation,
Compare: 2004 No 35 ss ME 29, MG 17, MI 13
OB 54 ICA tax advantage arrangement
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Debit
(1) An ICA company has an imputation debit for the amount of a debit for a tax advantage arrangement determined under section GB 36 (Reconstruction of imputation arrangements to obtain tax advantage).
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 27 (tax advantage arrangement).
Debit date
(3) The debit date is the last day of the tax year in which the debit for the tax advantage arrangement is determined.
Defined in this Act: amount, arrangement, ICA company, imputation debit, tax advantage, tax year,
Compare: 2004 No 35 s ME 5(1)(j), (2)(i)
OB 55 ICA retrospective imputation credit
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Debit
(1) An ICA company has an imputation debit for an imputation credit that is retrospectively attached to a non-cash dividend under section OB 62.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 28 (retrospective imputation credit).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: ICA company, imputation credit, imputation debit, non-cash dividend, pay,
Compare: 2004 No 35 s ME 6(4)(a)
OB 56 ICA final balance
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Debit
(1) An ICA company has an imputation debit for a credit balance in the imputation credit account when the company stops being an ICA company.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 29 (final balance).
Debit date
(3) The debit date is the day the company stops being an ICA company.
Defined in this Act: ICA company, imputation credit account, imputation debit,
Compare: 2004 No 35 s ME 5(1)(k), (2)(j)
OB 57 ICA refund of NRWT
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Debit
(1) An Australian ICA company has an imputation debit for an amount of a refund of NRWT that gave rise to an imputation credit under section OB 27.
Table references
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 30 (refund of NRWT). The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 25 (NRWT withheld).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, amount of tax, Australian ICA company, imputation credit, imputation debit, NRWT,
Compare: 2004 No 35 s ME 5(1A)(a), (2A)
OB 58 ICA refund of amount of tax for schedular payment
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Debit
(1) An Australian ICA company has an imputation debit for the amount of a refund of an amount of tax for a schedular payment that gave rise to an imputation credit under section OB 28.
Table references
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 31 (refund of amount of tax for schedular payment). The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 26 (amount of tax for schedular payment).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, amount of tax, Australian ICA company, imputation credit, imputation debit, pay, schedular payment,
Compare: 2004 No 35 s ME 5(1A)(b), (2A)
OB 59 ICA refund of schedular income tax
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Debit
(1) An Australian ICA company has an imputation debit for the amount of a refund of schedular income tax that gave rise to an imputation credit under section OB 29.
Table references
(2) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 32 (refund of schedular income tax). The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 27 (payment of schedular income tax).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, Australian ICA company, imputation credit, imputation debit, pay,
Compare: 2004 No 35 s ME 5(1A)(c), (2A)
Imputation credits attached to dividends
OB 60 Imputation credits attached to dividends
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Attaching imputation credits
(1) When an ICA company pays a dividend, it may attach an imputation credit to the dividend. Section OB 63 overrides this section.
Retrospective attachment
(2) The ICA company may determine that an imputation credit is retrospectively attached to a dividend in the circumstances described in section OB 62
Imputation ratio for dividend
(3) A dividend with an imputation credit attached has an imputation ratio calculated using the formula—
Definition of items in formula
(4) In the formula in subsection (3),—
(a) credit attached is the amount of the imputation credit attached to the dividend:
(b) net dividend paid is the amount of the dividend paid, excluding the amount of the imputation credit and FDP credit attached.
Maximum permitted ratio
(5) A dividend with an imputation credit attached must not have an imputation ratio that is more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).
Conversion of AUD dividend
(6) A dividend paid in Australian currency by an Australian ICA company must be converted into New Zealand currency, calculated using the formula—
Australian dollar value × exchange rate.
Definition of items in formula
(7) In the formula in subsection (6),—
(a) Australian dollar value is the amount of the dividend in Australian dollars:
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(b) exchange rate is the close of trading spot exchange rate for the Australian dollar on—
(i) the day the dividend is declared if that day is no more than 3 months before the dividend is paid; or
(ii) the day the dividend is paid if that day is more than 3 months after the dividend is declared.
Defined in this Act: amount, Australian ICA company, close of trading spot exchange rate, dividend, FDP credit, ICA company, imputation credit, imputation ratio, income year, maximum permitted ratio, pay, tax year,
Compare: 2004 No 35 ss ME 1B, ME 6, ME 8(1), (2)
OB 61 ICA benchmark dividend rules
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When this section applies
(1) This section applies when an ICA company pays a dividend on more than 1 occasion during a tax year. Subsection (2) overrides this subsection.
Exclusions
(2) This section does not apply to the following dividends:
(a) a dividend that is the subject of an election by a statutory producer board under sections OB 73 to OB 75:
(b) a dividend that is the subject of an election by a co-operative company under sections OB 78 to OB 80:
(c) a dividend paid when the company is not an ICA company.
Benchmark dividend
(3) The first dividend of the tax year is the benchmark dividend.
Same imputation ratio
(4) The imputation ratio of a dividend paid after the benchmark dividend must be the same as the imputation ratio of the benchmark dividend.
Breach of imputation ratio
(5) A breach of subsection (4) gives rise to an amount of an imputation debit under section OB 43 (table O2: imputation debits, row 16 (breach of imputation ratio)) calculated using the formula in section OB 43(1).
Ratio change declaration
(6) An ICA company may notify the Commissioner that the dividend is not part of an arrangement to obtain a tax advantage by providing a ratio change declaration stating that the dividend is not part of an arrangement to which sections GB 35 and GB 36 (which relate to imputation arrangements to obtain tax advantage) apply. The company must provide the declaration before the dividend is paid, or by a later date if the Commissioner allows. For the purposes of this subsection, the dividend must not be part of an arrangement to obtain a tax advantage. This subsection overrides subsection (5).
Consolidated imputation group
(7) This section applies, modified as necessary, to a consolidated imputation group as if it were a single company.
Group debit
(8) Under section OP 2(2) (When credits and debits arise only in group accounts), a breach of an imputation ratio alternatively gives rise to an imputation debit under section OP 43 (Consolidated ICA breach of imputation ratio) (table O20: imputation debits of consolidated imputation groups, row 17 (breach of imputation ratio)) if the company is part of a consolidated imputation group.
Treatment of group dividends
(9) In the application of this section to a consolidated imputation group, a dividend paid between group companies is disregarded.
Defined in this Act: arrangement, benchmark dividend, Commissioner, company, consolidated imputation group, co-operative company, dividend, ICA company, imputation debit, imputation ratio, notify, pay, statutory producer board, tax advantage, tax year,
Compare: 2004 No 35 ss ME 8(2), (3), ME 14(2)
OB 62 Retrospective attachment of imputation credits
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When this section applies
(1) This section applies in relation to a dividend arising from a transfer pricing arrangement or under subpart FL (Emigration of resident companies) when—
(a) an ICA company pays a non-cash dividend whose amount is later adjusted under section GC 7 or GC 8 (which relate to transfer pricing arrangements):
(b) an emigrating company that was an ICA company immediately before the time of emigration and is treated under section FL 2 (Treatment of emigrating companies and their shareholders) as paying a distribution to shareholders.
Imputation credits attached retrospectively
(2) The company may attach retrospectively an imputation credit to the dividend or distribution, as applicable.
Limit for ICA company
(3) The amount of all imputation credits attached retrospectively by a company referred to in subsection (1)(a) during a tax year must not be more than the lesser of—
(a) the credit balance of the company’s imputation credit account at the end of the tax year in which the dividend is paid; or
(b) the credit balance of the company’s imputation credit account at the end of each of the tax years in the period that runs from the tax year of payment of the dividend to the tax year in which the credit is attached retrospectively under subsection (1).
Limit for emigrating company
(4) The amount of all imputation credits attached retrospectively by a company referred to in subsection (1)(b) must be no more than the credit balance of the company’s imputation credit account immediately before the time of emigration.
When subsection (6) applies
(5) Subsection (6) applies if—
(a) a company provides a company dividend statement and issues a shareholder dividend statement for a non-cash dividend at the time it retrospectively attaches an imputation credit; and
(b) the adjustment under section GC 7 or GC 8 results in a payment of income tax; and
(c) the attachment of the imputation credit would otherwise result in a liability for imputation penalty tax.
New credit date
(6) The credit date for the imputation credit arising for the payment of the income tax referred to in subsection (5)(b) is the day on which the non-cash dividend is paid, and the company is excused a breach of section 69 of the Tax Administration Act 1994 for not filing a correct annual ICA return through the retrospective attachment of an imputation credit.
Statements still required
(7) A company that does not meet the requirement of subsection (5)(a) remains liable to—
(a) provide a company dividend statement; and
(b) issue a shareholder dividend statement for the non-cash dividend and the retrospective attachment of an imputation credit.
When subsection (9) applies
(8) Subsection (9) applies when an amount of tax paid by an emigrating company is attributable to income derived before the time of emigration or to the application of subpart FL.
Amount of tax paid by emigrating company
(9) The amount of tax referred to in subsection (8) is treated for the purposes of this subpart as paid immediately before the time of emigration if—
(a) the company determines to attach an imputation credit to a dividend; and
(b) the imputation credit is not less than the amount of tax; and
(c) the company notifies the Commissioner when providing the company dividend statement.
Defined in this Act: amount, amount of tax, annual ICA return, arrangement, Commissioner, company dividend statement, dividend, emigrating company, ICA company, imputation credit, imputation credit account, imputation penalty tax, income, income tax, non-cash dividend, notify, pay, shareholder, shareholder dividend statement, tax year, time of emigration,
Compare: 2004 No 35 s ME 6
OB 63 Australian dividends
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No credits attached
(1) Despite section OB 60(1), an ICA company must not attach an imputation credit to a dividend if—
(a) the Income Tax Assessment Act 1997 (Aust) applies to the payment of the dividend by the company; and
(b) the dividend is paid in relation to a share that is, or forms part of, a debt interest under that Act; and
(c) the payment of the dividend is included in the company’s return of income to the Australian Federal Commissioner of Taxation.
Exclusion: groups of companies
(2) Subsection (1) does not apply in relation to a share issued before 21 July 2005 if, when the dividend is paid, the shareholder and the ICA company—
(a) are not part of the same group of companies:
(b) are part of the same wholly-owned group of companies and not resident in New Zealand.
Exclusion: reasons for acquisition of shares
(3) Subsection (1) does not apply in relation to a share issued before 21 July 2005 if—
(a) the shareholder and the ICA company are part of the same group of companies; and
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(b) the shareholder acquired the share—
(i) as part of a sharebroking business:
(ii) as an investment held by the shareholder as part of an insurance business:
(iii) as security for a loan given as part of a business of lending money:
(iv) as a trustee for a beneficiary who is not a company that is part of the same group of companies as the shareholder:
(v) for a reason that does not include the fact that the shareholder and the ICA company were part of the same group of companies.
Defined in this Act: business, company, dividend, group of companies, ICA company, imputation credit, pay, resident in New Zealand, share, shareholder, trustee, wholly-owned group of companies,
Compare: 2004 No 35 s ME 6(1B)–(1D)
OB 64 Replacement payments
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Attaching credits
(1) On making a replacement payment, a share user under a share-lending arrangement may attach an imputation credit to the payment.
Amount of credit
(2) The amount of the imputation credit must be equal to or less than the amount of any imputation credit attached to a dividend relating to the replacement payment that is received by the share user before the replacement payment is made.
Defined in this Act: amount, dividend, imputation credit, pay, replacement payment, share-lending arrangement, share user,
Compare: 2004 No 35 s ME 6B
Further income tax
OB 65 Further income tax for ICA closing debit balance
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Liability
(1) An ICA company is liable to pay further income tax for a debit balance in the company’s imputation credit account at the end of a tax year.
Exclusion
(2) An imputation debit arising under section OB 46 (table O2: imputation debits, row 19 (transfer from member fund)) is disregarded when determining under subsection (1) if the company has a debit balance at the end of a tax year.
Due date
(3) The company must pay the further income tax to the Commissioner no later than 20 June following the end of the tax year.
Defined in this Act: Commissioner, company, further income tax, ICA company, imputation credit account, imputation debit, pay, tax year,
Compare: 2004 No 35 s ME 9(1), (1A), (2)
OB 66 Further income tax when company stops being ICA company
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Liability
(1) An ICA company is liable to pay further income tax for a debit balance in the company’s imputation credit account when the company stops being an ICA company.
Due date
(2) The company must pay the further income tax to the Commissioner by the day the company stops being an ICA company.
Paramount section
(3) A company that stops being an ICA company on the last day of a tax year is liable to pay further income tax under this section and not under section OB 65.
Defined in this Act: Commissioner, company, further income tax, ICA company, imputation credit account, pay, tax year,
Compare: 2004 No 35 s ME 9(3)
OB 67 Reduction of further income tax
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Debit at previous year-end
(1) An ICA company’s liability for further income tax under sections OB 65 and OB 66 may be reduced under subsection (2) if—
(a) a debit balance existed in the company’s imputation credit account at the end of a tax year; and
(b) the credits that arise in the account in the following tax year totals less than the debit balance; and
(c) the company notifies the Commissioner.
Amount of reduction
(2) The liability is reduced by the amount that is the debit balance for the tax year less the total amount of credits for the following tax year.
Qualifying companies
(3) The liability of an ICA company that is a qualifying company for further income tax under sections OB 65 and OB 66 may be reduced under subsection (4) if an imputation debit arises under section OB 32 (table O2: imputation debits, row 4 (refund of income tax)) in the company’s imputation credit account before the end of the tax year for which the liability arises.
Amount of reduction
(4) The liability of the qualifying company for further income tax at the end of the tax year referred to in subsection (3) is reduced by an amount calculated using the formula—
refunds − credits.
Definition of items in formula
(5) In the formula,—
(a) refunds is the total amount of all refunds of income tax paid to the company before the debit balance creating the liability for further income tax referred to in subsection (3) arises:
(b) credits is the total amount of all credits to the company’s imputation credit account for the period that runs from the tax year in which the first refund was received to the time the calculation is made.
Defined in this Act: amount, Commissioner, further income tax, ICA company, imputation credit account, imputation debit, imputation rules, income tax, notify, pay, qualifying company, tax year,
Compare: 2004 No 35 s ME 9(7)–(9)
OB 68 Income tax paid satisfying liability for further income tax
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Election
(1) On meeting the requirements of subsection (2), an ICA company that is liable for further income tax may choose to satisfy the liability through a payment of income tax.
Requirements
(2) The company must pay the income tax—
(a) after the end of the tax year in which the relevant debit balance arises; and
(b) for an income year corresponding to the tax year in which the company is an ICA company.
Payment credited
(3) The payment of income tax satisfies the company’s liability to pay further income tax.
When treated as paid
(4) The further income tax is treated as paid on the date on which the Commissioner receives the payment of income tax.
Defined in this Act: Commissioner, further income tax, ICA company, income tax, income year, pay, tax year,
Compare: 2004 No 35 s ME 9(5A), (8), (9)
OB 69 Further income tax paid satisfying liability for income tax
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Election
(1) An ICA company that pays further income tax may choose to treat the payment as satisfying a liability of the company to pay income tax or provisional tax.
ICA company status
(2) The liability for income tax or provisional tax referred to in subsection (1) must be for an income year corresponding to a tax year in which the company is an ICA company.
Alternative for consolidated imputation group
(3) A company that is part of a consolidated imputation group may choose that the payment under subsection (1) satisfies a group liability for income tax or provisional tax that arises at or after the time of payment.
When treated as paid
(4) The liability for income tax or provisional tax is treated as paid on the day on which the further income tax is paid.
Australian ICA company
(5) An Australian ICA company may choose to convert a payment of further income tax into a tax loss of an amount calculated under subsection (7). Subsection (6) overrides this subsection.
Requirement
(6) The election under subsection (5) may be made only if no possibility exists that the further income tax can be credited against a future income tax liability of the company.
Tax loss
(7) For the purposes of subsection (5), the amount of the tax loss for the payment of further income tax is calculated using the formula—
Definition of items in formula
(8) In the formula,—
(a) further income tax paid is the amount of further income tax paid that is not credited against an income tax liability:
(b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) at the time the further income tax is paid.
Benefit of the loss
(9) For the purposes of subsection (5), the company may choose that the tax loss is attributed to itself or to another company that is part of the same wholly-owned group of companies.
When loss is attributed
(10) The tax loss referred to in subsection (5) is a loss for the income year corresponding to the tax year in which the company paid the further income tax.
Defined in this Act: amount, Australian ICA company, basic rate, consolidated imputation group, further income tax, ICA company, income tax, income tax liability, income year, pay, provisional tax, tax loss, tax year, wholly-owned group of companies,
Compare: 2004 No 35 ss ME 9(5), (5B), ME 13(6)
OB 70 Application of other provisions
-
When it is appropriate for the purposes of this section, the other sections of this Act and the Tax Administration Act 1994—
(a) apply to further income tax as if they addressed further income tax and not income tax; and
(b) apply, modified as necessary, to ensure their application to further income tax rather than income tax; and
(c) do not override the imputation rules or section 101 of the Tax Administration Act 1994.
Defined in this Act: further income tax, imputation rules, income tax,
Compare: 2004 No 35 s ME 9(6)
Imputation additional tax
OB 71 Imputation additional tax on leaving wholly-owned group
-
When this section applies
(1) This section applies in a tax year when—
(a) a company (company A) stops being part of a wholly-owned group of companies because of a change in the ultimate owner of the company; and
(b) the company has a debit balance in its imputation credit account; and
(c) the loss balance carried forward from the previous tax year for companies in the group is more than $1,000,000.
Election to pay imputation additional tax
(2) At the time company A stops being part of the wholly-owned group, it may choose to reduce or eliminate the debit balance by paying imputation additional tax of an amount no greater than the debit balance but, in dealing with the liability, it may transfer some or all of the debit balance under subsection (3) or choose to use its excess entitlement under subsection (4), or a combination of both.
Debit balance
(3) Company A may choose to transfer under section OB 44 some or all of a debit balance in the company’s imputation credit account to another company (company B) in the same wholly-owned group. An imputation additional tax liability remains for the amount of the debit balance that is not transferred.
Payment of tax
(4) Company A may choose to use the amount of the excess entitlement described in subsection (5) as follows:
(a) company A may choose to treat company B as having paid provisional tax or income tax but only to the extent to which the amount is no more than the excess entitlement:
(b) company A may choose to use the amount of the excess entitlement under subsection (2) against the liability for imputation additional tax but only to the extent to which the amount is no more than the amount referred to in paragraph (a).
Amount of excess entitlement
(5) Company A’s excess entitlement at the time it stops being part of the wholly-owned group is 1 of the following amounts:
-
(a) zero, if the credit balance of its imputation credit account at the time is equal to or more than—
(i) the amount in the tax pooling account provided by or for the benefit of company A that is more than its liability to pay income tax or provisional tax at the time; or
(b) the total of the amounts referred to in paragraph (a)(i) and (ii) if no credit balance exists at the time; or
(c) the excess of the credit balance over the total of the amounts referred to in paragraph (a)(i) and (ii), if paragraph (b) does not apply.
Due date
(6) If company A chooses to pay imputation additional tax under subsection (2), it must pay the amount to the Commissioner no later than the 20th day of the month following the month in which company A stops being part of the group.
Joint liability
(7) Company A and all companies in the group are jointly liable for a payment of imputation additional tax under subsection (6). A payment of imputation additional tax does not satisfy any other liability of company A or the group.
Payment by excess tax
(8) Company A, or another company in the wholly-owned group, may choose to apply an excess tax payment to satisfy company A’s liability.
Form of election
(9) An election under this section must follow the form of an election under section OB 13(5).
Defined in this Act: amount, Commissioner, company, excess tax payment, imputation additional tax, imputation credit account, income tax, income tax liability, pay, provisional tax, tax loss, tax pooling account, tax year, ultimate owner, wholly-owned group of companies,
Compare: 2004 No 35 s ME 9B
OB 72 Imputation additional tax on joining wholly-owned group
-
Liability
(1) An ICA company to which subsection (2) applies may be liable for imputation additional tax under—
(a) subsection (3) as the company’s first liability under this section; or
(b) subsection (5) as the company’s second liability under this section.
Liable company
(2) The company is 1 to which all of the following apply:
(a) the company is or was recently part of a wholly-owned group of companies (the former group); and
(b) the company has or will soon join a different wholly-owned group of companies (the new group); and
(c) the former group has a loss balance carried forward from an earlier tax year of more than $1,000,000 for the tax year before the income year corresponding to the tax year in which the company changes groups.
First liability
(3) The company is liable for imputation additional tax if, at a particular time,—
(a) a debit balance exists in the company’s imputation credit account; and
(b) an imputation debit arose when the company was part of the former group; and
(c) the imputation additional tax liability of the company has not been paid under section OB 71 by the company or another company in the former group.
Amount of liability
(4) The amount of the imputation additional tax liability under subsection (3) is equal to the amount of the imputation debit at the time the company becomes part of the new group.
Second liability
(5) The company is liable for an amount of imputation additional tax equal to the excess entitlement determined under subsection (6).
Excess entitlement
(6) The company’s excess entitlement at a particular time is 1 of the following amounts:
-
(a) zero, if the credit balance of the company’s imputation credit account at the time is equal to or more than—
(i) the amount in the tax pooling account provided by or for the benefit of the company that is more than the company’s liability to pay income tax or provisional tax at the time; or
(ii) the company’s entitlement to a refund under sections RM 2, and RM 4 to RM 6 (which relate to refunds of excess tax); or
(b) the total of the amounts referred to in paragraph (a)(i) and (ii) if no credit balance exists at the time; or
(c) the excess of the credit balance over the total of the amounts referred to in paragraph (a)(i) and (ii), if paragraph (b) does not apply.
Due date
(7) The imputation additional tax must be paid to the Commissioner no later than the 20th day of the month following the month in which the company stops being part of the former group.
Joint liability
(8) The company and all companies in the new group are jointly liable for the imputation additional tax. A payment of imputation additional tax does not satisfy any other liability of the company or the new group.
Payment by excess tax
(9) For a liability under subsections (3) and (5), the company or another company in the new group may choose to satisfy the liability by applying an excess tax payment in discharging it.
Defined in this Act: amount, Commissioner, company, excess tax payment, ICA company, imputation additional tax, imputation credit account, imputation debit, income tax liability, income year, pay, provisional tax, tax loss, tax pooling account, tax year, wholly-owned group of companies,
Compare: 2004 No 35 s ME 9C
Distributions of statutory producer boards and co-operative companies
OB 73 Statutory producer boards attaching imputation credits to cash distributions
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Election
(1) On meeting the requirements of subsection (2), a statutory producer board that is an ICA company may choose, for an income year, to attach an imputation credit to a cash distribution paid to a member of the producer board.
Requirements
(2) The producer board may make an election under subsection (1) if—
(a) the distribution is made to all persons who were members of the board at a time in the income year; and
(b) the board proposes to pay the distribution based on 1 of the factors set out in subsection (3); and
(c) the board would, in the absence of this section, have a deduction for some or all of the distribution, whether as an association rebate under subpart HE (Mutual associations) or under some other provision of this Act.
Methods
(3) The amount of the distribution must be based on 1 of the following methods of determination, as applicable, for an income year:
(a) all payments for a member’s produce transactions during the income year as a proportion of total payments for all members’ produce transactions during the income year; or
(b) all levies payable by a member for the income year as a proportion of total levies payable by members for the income year; or
(c) another method of determination approved by the Commissioner.
Total credits attached
(4) The total amount of imputation credit attached to the distribution is calculated using the formula—
Definition of items in formula
(5) In the formula in subsection (4),—
(a) total net dividend is the total amount of the distribution excluding the amount of imputation credit:
(b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for the income year.
Member’s credits
(6) The amount of a member’s share of an imputation credit attached under subsection (4) is calculated using the formula—
Definition of items in formula
(7) In the formula in subsection (6),—
(a) member’s distribution is the amount of the member’s share of the distribution excluding the amount of imputation credit:
(b) total distribution is the amount of the total distribution paid excluding the amount of imputation credit:
(c) total imputation credit attached is total amount of imputation credit attached to the distribution calculated under subsection (4).
When producer board chooses not to have deduction
(8) If a producer board chooses to treat a distribution as a dividend, it is denied a deduction for the amount of the distribution under section DV 18 (Statutory producer boards and co-operative companies).
Defined in this Act: amount, association rebate, basic rate, Commissioner, deduction, dividend, ICA company, imputation credit, income tax, income year, levy, member, pay, produce transactions, statutory producer board,
Compare: 2004 No 35 ss ME 30, ME 31
OB 74 Statutory producer boards attaching imputation credits to notional distributions
-
Election
(1) A statutory producer board that is an ICA company may choose, for an income year, to attach an imputation credit to a notional distribution, as a result of which a member derives a dividend of an amount calculated under section OB 75(2). Subsections (2) and (8) override this subsection.
All members
(2) A statutory producer board may make an election under subsection (1) only if the distribution is made to all persons who were members of the producer board at a time in the income year.
Methods
(3) The producer board may determine that the amount of an imputation credit attached to a notional distribution is based on—
(a) produce transactions, and calculated under subsection (5) for each member; or
(b) members’ levies, and calculated under subsection (7) for each member; or
(c) a combination of paragraphs (a) and (b); or
(d) some other method of determination approved by the Commissioner.
Produce transactions
(4) The amount of an imputation credit attached to a member’s distribution that is based on produce transactions is calculated using the formula—
Definition of items in formula
(5) In the formula in subsection (4),—
(a) member’s payments is the total amount of all payments to or by a member for the member’s produce transactions during the income year:
(b) total payments is all payments to or by all members for produce transactions during the income year:
(c) credit attached is the amount of imputation credit attached to the distribution.
Members’ levies
(6) An imputation credit attached to a member’s distribution that is based on members’ levies is calculated using the formula—
Definition of items in formula
(7) In the formula in subsection (6),—
(a) member’s levies is the total amount of all levies payable by a member to the producer board for the income year:
(b) total levies is total amount of all levies payable by all members to the producer board for the income year:
(c) credit attached is the amount of imputation credit attached to the distribution.
Commissioner’s determination
(8) The Commissioner may apply subsections (4) to (7) to determine the amount of the imputation credit to be treated as attached to a member’s distribution if the Commissioner considers that the producer board’s application of subsections (3) to (7) does not result in a fair and reasonable allocation of an amount of imputation credit to a member having regard to—
(a) the produce transactions of the producer board; and
(b) the levies payable to the producer board; and
(c) any other relevant factor.
Defined in this Act: amount, Commissioner, dividend, ICA company, imputation credit, income year, levy, member, pay, produce transactions, statutory producer board,
Compare: 2004 No 35 s ME 32
OB 75 Statutory producer boards’ notional distributions that are dividends
-
Dividend derived
(1) A notional distribution to which section OB 74 applies that has an imputation credit attached is a dividend under section CD 13 (Notional distributions of producer boards and co-operative companies) derived by a member.
Calculation of amount
(2) The amount of the dividend is calculated using the formula—
Definitions of items in formula
(3) In the formula,—
(a) credit attached is the amount of imputation credit attached to the member’s distribution:
(b) tax rate is the basic rate of income tax for companies set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for the income year.
When derived
(4) The member derives the dividend on the date the statutory producer board chooses under section OB 74 to make a notional distribution.
Returns and information
(5) For the purposes of this section, the producer board must—
(a) include the details of the dividend with the return of income filed for the tax year corresponding to the income year in relation to which the distribution was made; and
(b) retain relevant information to enable the Commissioner to determine whether a later distribution is not a dividend under section CD 26(3) or CD 33(1) (which relate to capital distributions on liquidation or emigration and payments that correspond to notional distributions).
Defined in this Act: amount, basic rate, Commissioner, company, dividend, imputation credit, income tax, income year, member, pay, return of income, statutory producer board, tax year,
Compare: 2004 No 35 s ME 33
OB 76 Statutory producer boards attaching FDP credits
-
FDP credits attached
(1) A statutory producer board that is an FDPA company may choose, for an income year, to attach an FDP credit to a cash distribution or a notional distribution. An FDP credit may be attached in conjunction with an imputation credit.
Application of provisions
(2) Sections OB 73 to OB 75 and OB 77 apply, modified as necessary, to the producer board, the distribution, and the FDP credit.
Both credits at once
(3) A producer board may choose to attach both an imputation credit and an FDP credit as part of 1 distribution.
Defined in this Act: FDP credit, FDPA company, imputation credit, income year, statutory producer board,
Compare: 2004 No 35 s ME 34
OB 77 When and how statutory producer board makes election
-
Timing of election
(1) A statutory producer board may make an election under section OB 73, OB 74, or OB 76 in relation to a distribution either—
(a) after the income year in relation to which the distribution is made; but
(b) no later than 6 months after the end of the income year in relation to which the distribution is made.
Notice
(2) A producer board must notify the Commissioner of an election referred to in subsection (1) no later than the time allowed for the statutory producer board to file a return of income for the tax year corresponding to the income year in relation to which the distribution is made.
Defined in this Act: Commissioner, dividend, income year, return of income, statutory producer board, tax year,
Compare: 2004 No 35 s ME 30(3), (4)
OB 78 Co-operative companies attaching imputation credits to cash distributions
-
Election
(1) On meeting the requirements of subsection (2), a co-operative company that is an ICA company may choose, for an income year, to attach an imputation credit to a cash distribution paid to the company’s shareholders.
Requirements
(2) A co-operative company may make an election under subsection (1) if—
(a) the distribution is made to all persons who were shareholders of the company at a time during the income year; and
(b) the distribution is based on the proportion for the income year in which the payments to or by a shareholder for their produce transactions are of total payments to or by all shareholders for all produce transactions; and
(c) the company would, in the absence of this section, have a deduction for some or all of the distribution, whether as an association rebate under subpart HE (Mutual associations) or some other provision of this Act; and
(d) no other election for a cash distribution is made for the income year.
Total credit attached
(3) The total amount of imputation credit attached to the distribution is calculated using the formula—
Definition of items in formula
(4) In the formula in subsection (3),—
(a) total net dividend is the total amount of the distribution excluding the amount of imputation credit:
(b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for the income year.
Shareholder’s credit
(5) The amount of a shareholder’s share of the imputation credit attached as described in subsection (3) is calculated using the formula—
Definition of items in formula
(6) In the formula in subsection (5),—
(a) shareholder’s distribution is the amount that is the shareholder’s share of the distribution, excluding the amount of imputation credit:
(b) total distribution is the amount of the total distribution paid, excluding the amount of imputation credit:
(c) total imputation credit attached is the total amount of imputation credit attached to the distribution calculated under subsection (3).
When co-operative company chooses not to have deduction
(7) If a co-operative company chooses to treat a distribution as a dividend, it is denied a deduction under section DV 18 (Statutory producer boards and co-operative companies). The company must notify the Commissioner of an election under this subsection under section OB 82(3) for the election to be effective.
Defined in this Act: amount, association rebate, basic rate, Commissioner, co-operative company, deduction, dividend, ICA company, imputation credit, income tax, income year, Maori authority, notify, pay, produce transactions, shareholder,
Compare: 2004 No 35 ss ME 35, ME 36
OB 79 Co-operative companies attaching imputation credits to notional distributions
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Election
(1) On meeting the requirements of subsection (2), a co-operative company that is an ICA company may choose, for an income year, to attach an imputation credit to a notional distribution, as a result of which a member derives a dividend of an amount calculated under section OB 80.
Requirements
(2) A co-operative company may make an election under subsection (1) if—
(a) the distribution is made to all persons who were shareholders of the company at a time during the income year; and
(b) no other election to pay a notional distribution is made for the income year.
Shareholder’s credits
(3) The amount of a shareholder’s share of an imputation credit attached to a notional distribution is calculated using the formula—
Definition of items in formula
(4) In the formula,—
(a) produce payments is the amount of all payments to or by the shareholder for the shareholder’s produce transactions during the income year:
(b) total payments is the amount of all payments to or by shareholders for produce transactions during the income year:
(c) credit attached is the amount of imputation credit attached to the distribution.
Defined in this Act: amount, co-operative company, dividend, ICA company, imputation credit, income year, member, pay, produce transactions, shareholder,
Compare: 2004 No 35 s ME 37
OB 80 Co-operative companies’ notional distributions that are dividends
-
Dividends
(1) A notional distribution referred to in section OB 79 that has an imputation credit attached is a dividend under section CD 13 (Notional distributions of producer boards and co-operative companies) derived by a shareholder of the co-operative company.
Amount
(2) The amount of a shareholder’s dividend is calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) credit attached is the amount of imputation credit attached to the shareholder’s distribution:
(b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) for the income year.
When derived
(4) The shareholder derives the dividend on the date the co-operative company chooses under section OB 79 to make a notional distribution.
Defined in this Act: amount, basic rate, co-operative company, dividend, imputation credit, income tax, income year, shareholder,
Compare: 2004 No 35 s ME 38
OB 81 Co-operative companies attaching FDP credits
-
Election
(1) A co-operative company that is an FDPA company may choose, for an income year, to attach an FDP credit to a cash distribution. The FDP credit may be attached in conjunction with an imputation credit.
Application of provisions
(2) Sections OB 78 to OB 80 and section 64 of the Tax Administration Act 1994 apply, modified as necessary, to the co-operative company, the distribution, and the FDP credit.
Both credits at once
(3) A co-operative company may choose to attach both an imputation credit and an FDP credit as part of 1 distribution.
Defined in this Act: co-operative company, FDP credit, FDPA company, imputation credit, income year,
Compare: 2004 No 35 s ME 39
OB 82 When and how co-operative company makes election
-
One a year
(1) A co-operative company may make an election under section OB 78, OB 79, or OB 81 in relation to a distribution for—
(a) only 1 cash distribution during the income year:
(b) only 1 notional distribution during the income year.
Timing
(2) A co-operative company may make an election referred to in subsection (1)—
(a) after the income year in relation to which the distribution is made; but
(b) no later than 6 months after the end of the income year in relation to which the distribution is made.
Notice
(3) A co-operative company must notify the Commissioner of an election referred to in subsection (1)(a) no later than the time allowed for the company to file a return of income for the tax year corresponding to the income year in relation to which the distribution is made.
Defined in this Act: Commissioner, co-operative company, income year, notify, return of income, tax year,
Compare: 2004 No 35 s ME 35
Tables of credits and debits in memorandum accounts
| How to use these tables |
| Each row of a table describes— |
| (a) the credits or debits that may arise in a memorandum account during a tax year; and |
| (b) the credit date or debit date when the credit or debit arises. |
| A more detailed description of the credits or debits is contained in the section noted in the last column. |
Table O1—imputation credits
| Row | Imputation credit | Credit date | Further defined |
|---|---|---|---|
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | Provisional tax and income tax paid | day of payment | section OB 4 |
| 3 | Deposit into tax pooling account | day of payment | section OB 5 |
| 4 | Tranfser from tax pooling account | day of credit | section OB 6 |
| 5 | Payment of further income tax | day of payment | section OB 7 |
| 6 | Amount of tax withheld for resident passive income | day on which amount is withheld | section OB 8 |
| 7 | Imputation credit attached to dividend derived | day on which dividend is paid | section OB 9 |
| 8 | FDP credit attached to dividend derived when not FDPA company | day on which dividend is paid | section OB 10 |
| 9 | Payment of FDP when not FDPA company | day of payment | section OB 11 |
| 10 | Transfer from FDP account | day of payment | section OB 12 |
| 11 | Transfer of debt balance when company leaves wholly-owned group | day on which company leaves group | section OB 13 |
| 12 | Additional income tax payable when company leaves wholly-owned group | day of payment | section OB 14 |
| 13 | Additional income tax when company joins wholly-owned group | day of payment | section OB 15 |
| 14 | Attribution for personal services if company is not attributing company | 31 March | section OB 16 |
| 15 | Transfer from policyholder credit account | day of transfer | section OB 17 |
| 16 | Transfer from ASC account | day of transfer | section OB 18 |
| 17 | Transfer from master fund by company | day of transfer | section OB 19 |
| 18 | Maori authority credit attached to day of distribution | day of distribution | section OB 20 |
| 19 | Transfer of balance of Maori authority credit account | day of transfer | section OB 21 |
| 20 | Replacement money paid under share-lending arrangement | day of payment | section OB 22 |
| 21 | Imputation credit shown in crdit transfer notice | day on which notice is given | section OB 23 |
| 22 | Imputation credit, FDP credit, or policyholder credit on resident's restricted amalgamation | credit date in account of amalgamating company | section OB 24 |
| 23 | Reversal of debt for tax advantage arrangement | debit date of debit | section OB 25 |
| 24 | Eliminating debit for loss of shareholder continuity cancelling tax pooling account deposit that is refunded or credited | day of refund or credit | section OB 26 |
| 25 | Amount of tax withheld by Australian ICA company for non-resident passive inncome | day on which amount is withhheld | section OB 27 |
| 26 | Amount of tax withheld from schedular payment to Australian ICA company | day on which amount is withheld | section OB 28 |
| 27 | Schedular income tax paid bby Australian ICA companyy | day of payment | section OB 29 |
Table O2—imputation debits
| Row | Imputation debit | Debit date | Further defined |
|---|---|---|---|
| 1 | Opening debt balance | 1 April | section OA 7 |
| 2 | Imputation credit attached to dividend paid | day of payment | section OB 30 |
| 3 | Allocation of provisional tax | day of notice of allocation | section OB 31 |
| 4 | Refund of income tax | day of refund | section OB 32 |
| 5 | Overpaid income tax applied to meet another tax liability | day of application | section OB 33 |
| 6 | Refund from tax pooling account | day of refund | section OB 34 |
| 7 | Transfer of entitlement to another person in tax pooling account | set out in section OB 35 | section OB 35 |
| 8 | Refund of FDP when not FDPA company | day of refund | section OB 36 |
| 9 | Refund of tax credit | day of refuned | section OB 37 |
| 10 | Overpaid FDP applied to satisfy liability when not FDPA company | day of application | section OB 38 |
| 11 | Overpaid income tax or FDP applied to satisfy pre-imputation income tax when not FDPA company | day of application | section OZ 3 |
| 12 | Transfer to FDP account on account of net foreign attributed income for income year | 31 March or when tax return filed | section OB 39 |
| 13 | Attribution for personal service | 31 March | section OB 40 |
| 14 | Debit for loss of shareholder continuity | day of loss of continuity | section OB 41 |
| 15 | Debit for on-market cancellation | day of acquisition | section OB 42 |
| 16 | Debit for breach of imputation ratio | 31 march | section OB 43 |
| 17 | Transfer for debit balance when company leaves wholly-owned group | day on which company leaves group | section OB 44 |
| 18 | Redemption debit for unit trust or group investment fund for income year | day on which return of income for income year is filed | section OB 45 |
| 19 | Transfer from member fund to master fund | 31 March | section OB 46 |
| 20 | Transfer to company's policyholder credit account | set out in section OB 47 | section OB 47 |
| 21 | Credit balance when Maori authority credit account starts | day of becoming Maori authority | section OB 48 |
| 22 | Credit attached to replacement payment paid by company under share-lending arrangement | day of payment | section OB 49 |
| 23 | Credit attached to dividend paid to company shown in returning share trannsfer | day of payment | section OB 50 |
| 24 | Credit attached to dividend paid to company shown in credit transfer notice | day of payment | section OB 51 |
| 25 | Credit that is also credit to imputation credit account of consolidated imputation group | credit date for imputation credit | section OB 52 |
| 26 | Imputation debit, FDP debit, or policyholder debit in account of amalgamating company | debit date in account of amalgamating company | section OB 53 |
| 27 | Debit for tax advantage arrangement | last day of tax year in which tax arrangement began | section OB 54 |
| 28 | Retrospective attachment of imputation credit to non-cash dividend | day of payment of dividend | section OB 55 |
| 29 | Final balance whenwhen ICA company status ends | day of cessation | section OB 56 |
| 30 | Refund of amount of tax for non-resident passive income to Australian ICA company | day of refund | section OB 57 |
| 31 | Refund of amount of tax for schedular payment to Australian ICA company | day of refund | section OB 58 |
| 32 | Refund of schedular income tax to Australian ICA company | day of refund | section OB 59 |
Subpart OC—Foreign dividend payment accounts (FDPA)
Introductory provisions
OC 1 General rules for companies with FDP accounts
-
FDPA company
(1) A company resident in New Zealand may choose to become a foreign dividend payment account (FDPA) company. This subsection does not apply to a portfolio tax rate entity.
FDP accounts
(2) An FDPA company must maintain a foreign dividend payment (FDP) account for a tax year. The account is a record of FDP credits and FDP debits that arise in the account during the tax year.
Main credit
(3) An FDPA company has an FDP credit for an amount of FDP paid under subpart RG (Payments for foreign dividends (FDP)) when the company derives a dividend from a non-resident company.
Main debit
(4) An FDPA company has an FDP debit for the amount of an FDP credit attached to a dividend paid to the company’s shareholders.
Treatment of FDP credit by shareholder
(5) The amount of an FDP credit attached to a dividend derived by a shareholder is included in the amount of the dividend under section CD 15 (Tax credits linked to dividends).
Refunds
(6) When a dividend with an FDP credit attached is derived by a non-resident or by a person who is resident and the dividend is exempt income of the person, they are entitled to a refund under section LF 8 (Credits for persons who are non-resident or who receive exempt income).
Shareholder continuity requirements
(7) The carrying forward of a credit in a company’s FDP account is subject to the shareholder continuity requirements of section OA 8 (Shareholder continuity requirements for memorandum accounts).
Imputation credits
(8) If a company does not choose to become an FDPA company, a payment of FDP on a dividend derived from a non-resident company is accounted for under the imputation rules under section OB 11 (ICA payment of FDP).
Defined in this Act: amount, assessable income, company, dividend, exempt income, FDP account, FDP credit, FDP debit, FDPA company, imputation rules, income, non-resident company, pay, portfolio tax rate entity, resident in New Zealand, shareholder, tax year,
Compare: 2004 No 35 ss CD 9, LD 9, ME 4(1)(e), (f), MG 2(1), (3), MG 4(1)(a), (b), MG 5(3)
OC 2 FDP accounts
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General rules apply
(1) The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to the FDP account of an FDPA company.
Consolidated groups
(2) Under section OP 54 (When credits and debits arise only in consolidated FDP group accounts), certain credits and debits do not arise in the account if the company is part of a consolidated group.
Defined in this Act: consolidated group, FDP account, FDPA company, memorandum account,
Compare: 2004 No 35 s MG 16(1), (4)
OC 3 Choosing to become FDPA company
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Election
(1) A company that chooses to become an FDPA company must notify the Commissioner of the election no later than 21 days after the date of the election or by a later date if the Commissioner allows.
Effect of election
(2) An FDPA company must maintain the FDP account referred to in section OC 1(2) from the date of election.
Defined in this Act: Commissioner, company, FDP account, FDPA company, notify,
Compare: 2004 No 35 s MG 2(2), (3)
OC 4 When company chooses to stop being FDPA company
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Election
(1) An FDPA company may choose to stop being an FDPA company.
When election made
(2) An FDPA company may make an election under subsection (1) only in a tax year that is later than the tax year in which the company chooses under section OC 3 to become an FDPA company.
When company’s status ends
(3) The company ends its status as an FDPA company from the first day of the tax year after the tax year in which the election referred to in subsection (2) is made but only if the company—
(a) files an annual FDPA return for the year of election in the time allowed by section 71 of the Tax Administration Act 1994; and
(b) pays further FDP, if any, under section OC 30 or OC 31 for the year of election.
Defined in this Act: amount, annual FDPA return, FDP, FDPA company, further FDP, pay, tax year,
Compare: 2004 No 35 s MG 2(4), (5)
OC 5 When company emigrates
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Status ends
(1) If an emigrating company is an FDPA company immediately before the time of emigration, its status as an FDPA company ends at the time of emigration.
Further payments and returns
(2) The company referred to in subsection (1) must—
(a) file an annual FDPA return for the tax year in which the company becomes non-resident; and
(b) pay any further FDP payable under sections OC 30 to OC 34 for the tax year.
Defined in this Act: annual FDPA return, emigrating company, FDPA company, further FDP, non-resident, pay, tax year, time of emigration,
Compare: 2004 No 35 s MG 2(6), (7)
FDP credits
OC 6 FDPA payment of FDP
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Credit
(1) An FDPA company has an FDP credit for an amount of FDP paid, including an amount of further FDP paid under section OC 34. Subsection (3) overrides this subsection.
Table references
(2) The FDP credits in subsection (1) are referred to in table O3: FDP credits, rows 2 (payment of FDP) and 3 (payment of further FDP).
No credit
(3) The company does not have a credit for FDP paid—
(a) under section RG 6 (Using loss balances) by reducing a tax loss; and
(b) for a conduit tax relief (CTR) debit referred to in section OD 23(2)(d) to (f) (FDP payable for CTR debits).
Credit date
(4) The credit date is the day the FDP is paid.
Defined in this Act: amount, CTR debit, FDP, FDP account, FDPA company, FDP credit, further FDP, pay, tax loss,
Compare: 2004 No 35 ss MG 4(1)(a), (c), (2)(a), (3), MI 10(2)
OC 7 FDPA dividend derived with FDP credit
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Credit
(1) An FDPA company has an FDP credit for the amount of an FDP credit attached to a dividend derived by the company.
Table reference
(2) The FDP credit in subsection (1) is referred to in table O3: FDP credits, row 4 (dividend derived with FDP credit).
Credit date
(3) The credit date is the day the dividend is paid.
Defined in this Act: amount, dividend, FDP credit, FDPA company, pay,
Compare: 2004 No 35 s MG 4(1)(b), (2)(b)
OC 8 FDPA payment of FDP for transfer from CTR account
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Credit
(1) An FDPA company has an FDP credit for the amount of a payment of FDP under section OD 23(2)(a) (FDP payable for CTR debits).
Table reference
(2) The FDP credit in subsection (1) is referred to in table O3: FDP credits, row 5 (payment of FDP for transfer from conduit account).
Credit date
(3) The credit date is the last day of the tax year.
Defined in this Act: amount, FDP, FDP credit, FDPA company, pay, tax year,
Compare: 2004 No 35 s MG 4(1)(bb), (2)(bb)
OC 9 FDPA transfer for net foreign attributed income
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Credit
(1) An FDPA company has an FDP credit for an amount equal to the amount of the imputation debit under section OB 39 (ICA transfer for net foreign attributed income).
Table references
(2) The FDP credit in subsection (1) is referred to in table O3: FDP credits, row 6 (transfer for net foreign attributed income). The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 12 (transfer for net foreign attributed income).
Credit date
(3) The credit date is the same as the debit date recorded for the debit in the imputation credit account.
Defined in this Act: amount, FDP credit, FDPA company, imputation credit account, imputation debit,
Compare: 2004 No 35 s MG 4(1)(ba), (2)(ba)
OC 10 FDPA payment of FDP for conduit debit balance
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Credit
(1) An FDPA company has an FDP credit for the amount of a payment of FDP under section OD 23(2)(b), (c), or (g) (FDP payable for CTR debits).
Table reference
(2) The FDP credit in subsection (1) is referred to in table O3: FDP credits, row 7 (payment of FDP for conduit debit balance).
Credit date
(3) The credit date is the day the FDP is paid.
Defined in this Act: amount, FDP, FDP account, FDP credit, FDPA company, pay,
Compare: 2004 No 35 s MG 4(1)(bc), (2)(bc)
OC 11 FDPA credit transfer to company
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Credit
(1) An FDPA company has an FDP credit for the amount of a credit shown in a credit transfer notice given to the company.
Table reference
(2) The FDP credit in subsection (1) is referred to in table O3: FDP credits, row 8 (credit transfer).
Credit date
(3) The credit date is the day the notice is given.
Defined in this Act: amount, credit transfer notice, FDP credit, FDPA company,
Compare: 2004 No 35 s MG 4(1)(bd), (2)(bd)
OC 12 FDPA reversal of tax advantage arrangement
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When this section applies
(1) This section applies when it is established that an FDP credit in an FDPA company’s FDP account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.
Credit
(2) The company has an FDP credit for an amount equal to the amount of a debit in the company’s FDP account under section OC 25.
Table references
(3) The FDP credit in subsection (2) is referred to in table O3: FDP credits, row 9 (reversal of tax advantage arrangement). The FDP debit in subsection (2) is referred to in table O4: FDP debits, row 14 (tax advantage arrangement).
Credit date
(4) The credit date is the same as the debit date recorded for the debit.
Defined in this Act: amount, FDP account, FDP credit, FDPA company, tax advantage,
Compare: 2004 No 35 s MG 4(1)(d), (2)(d)
FDP debits
OC 13 FDPA payment of dividend
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Debit
(1) An FDPA company has an FDP debit for the amount of an FDP credit attached to a dividend paid by the company.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 2 (payment of dividend).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: amount, dividend, FDP credit, FDP debit, FDPA company, pay,
Compare: 2004 No 35 s MG 5(1)(a), (2)(a)
OC 14 FDPA refund of FDP
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Debit
(1) An FDPA company has an FDP debit for the amount of a refund of FDP paid to the company. Subsection (3) overrides this subsection.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 3 (refund of FDP).
No debit
(3) The company does not have a debit for the amount of—
(a) a refund to the extent to which it refunds FDP paid before a debit arises under section OC 24 (table O4: FDP debits, row 13 (debit for loss of shareholder continuity)); or
(b) a refund of FDP paid under section OD 25 (Refunds on transfers to CTR account).
Debit date
(4) The debit date is the day the refund is made.
Defined in this Act: amount, FDP, FDP account, FDP debit, FDPA company, pay,
Compare: 2004 No 35 s MG 5(1)(d), (2)(d)
OC 15 FDPA overpayment of FDP
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Debit
(1) An FDPA company has an FDP debit for the amount of an overpayment of FDP that is applied to pay an amount due under the Inland Revenue Acts. Subsection (3) overrides this subsection.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 4 (overpayment of FDP).
No debit
(3) The company does not have a debit for the amount of an overpayment of FDP—
(a) that is applied to satisfy a liability for FDP; or
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(b) that—
(i) relates to a payment of FDP before an FDP debit arises under section OC 24 (table O4: FDP debits, row 13 (debit for loss of shareholder continuity)); and
(ii) is no more than the debit for loss of shareholder continuity.
Debit date
(4) The debit date is the day the amount is applied.
Defined in this Act: amount, FDP, FDP debit, FDPA company, Inland Revenue Acts, pay, shareholder,
Compare: 2004 No 35 s MG 5(1)(k), (2)(i)
OC 16 FDPA refund of tax credit
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Debit
(1) An FDPA company has an FDP debit for the amount of refund under section LA 6(2)(e) (Remaining refundable credits: PAYE, RWT, and certain other items) to the company.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 5 (refund of tax credit).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, FDP debit, FDPA company,
Compare: 2004 No 35 s MG 5(1)(e), (2)(d)
OC 17 FDPA credit transfer by company
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Debit
(1) An FDPA company has an FDP debit for the amount of an FDP credit attached to a dividend paid by the company and shown in a credit transfer notice given by the company.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 6 (credit transfer).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: amount, credit transfer notice, dividend, FDP credit, FDP debit, FDPA company, pay,
Compare: 2004 No 35 s MG 5(1)(ab), (2)(ab)
OC 18 FDPA transfer to imputation credit account
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Election
(1) An FDPA company may choose for a tax year to transfer some or all of a closing credit balance in the company’s FDP account to the imputation credit account of—
(a) the company; or
(b) an imputation group of which the company is part.
Debit and credit
(2) The amount transferred is—
(a) an FDP debit in the company’s FDP account; and
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(b) an imputation credit under, as applicable,—
(i) section OB 12 (ICA transfer from FDP account) in the company’s imputation credit account; or
(ii) section OP 18 (Consolidated ICA transfer from group company’s FDP account) in the imputation credit account of the consolidated imputation group.
Table references
(3) The table references are as follows:
(a) the FDP debit in subsection (2)(a) is referred to in table O4: FDP debits, row 7 (transfer to imputation credit account):
(b) the imputation credit in subsection (2)(b)(i) is referred to in table O1: imputation credits, row 10 (transfer from FDP account):
(c) the imputation credit in subsection (2)(b)(ii) is referred to in table O19: imputation credits of consolidated imputation groups, row 13 (transfer from group company’s FDP account).
Method of election
(4) The company makes the election by recording the credit balance transferred as—
(a) a debit in the company’s FDP account; and
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(b) a credit in the imputation credit account of—
(i) the company; or
(ii) the imputation group.
CTR companies
(5) Despite subsection (1), an FDPA company that is also a CTR company may not choose to make the transfer.
Debit date
(6) The debit date is the last day of the tax year.
Defined in this Act: amount, CTR company, consolidated imputation group, FDP, FDP account, FDP debit, FDPA company, imputation credit, imputation credit account, imputation group, tax year,
Compare: 2004 No 35 ss MG 5(1)(c), (2)(c), MG 11
OC 19 FDPA transfer to CTR account
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Debit
(1) An FDPA company has an FDP debit for an amount transferred when a credit balance in the company’s FDP account is treated under subsections (2) and (3) as transferred to the company’s CTR account. The amount of the debit is the smaller of the credit balance and debit balance in subsection (2).
When debit arises
(2) The debit for the transfer arises when—
(a) a credit balance exists in the company’s FDP account immediately before the end of the tax year; and
(b) a debit balance exists in the company’s CTR account immediately before the end of the tax year.
Determining balances
(3) For the purposes of subsection (2), —
(a) the credit balance in the FDP account is found by including an FDP credit under section OC 9; and
(b) the debit balance in the CTR account is found by including a CTR credit under section OD 5 (CTRA tax credit for conduit tax relief); and
(c) the debit balance and the credit balance are determined immediately before a transfer under this section is made.
Amount of debit and credit
(4) The smaller of the debit balance or the credit balance referred to in subsection (2) becomes—
(a) the FDP debit transferred; and
(b) the CTR credit under section OD 6 (CTRA transfer from FDP account).
Table references
(5) The table references are as follows:
(a) the FDP debit in subsection (1) is referred to in table O4: FDP debits, row 8 (transfer to CTR account):
(b) the FDP credit in subsection (3)(a) is referred to in table O3: FDP credits, row 6 (transfer for net foreign attributed income):
(c) the CTR credit in subsection (3)(b) is referred to in table O5: CTR credits, row 2 (tax credit for conduit tax relief):
(d) the FDP credit in subsection (4)(a) is referred to in table O4: FDP debits, row 8 (transfer to CTR account):
(e) the CTR credit in subsection (4)(b) is referred to in table O5: CTR credits, row 3 (transfer from FDP account).
Debit date
(6) The debit date is the last day of the tax year.
Defined in this Act: amount, CTR account, CTR credit, FDP account, FDP credit, FDP debit, FDPA company, foreign attributed income, income tax, tax year,
Compare: 2004 No 35 ss MG 5(1)(ca), (2)(ca), MI 6(1)
OC 20 FDPA transfer to policyholder credit account
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Election
(1) An FDPA company that is also a policyholder credit account (PCA) company may, for a tax year,—
(a) choose to transfer some or all of a credit balance in the company’s FDP account to its policyholder credit account; or
(b) be treated as choosing to transfer a credit in the FDP account to the policyholder credit account.
Debit and credit
(2) The credit balance or the amount of the credit transferred is—
(a) an FDP debit; and
(b) a policyholder credit under section OJ 4 (PCA transfer from FDP account).
Method of election
(3) The FDPA company makes the election by recording the amount transferred as—
(a) a debit in the FDP account; and
(b) a credit in the policyholder credit account.
Scope of election
(4) If the credit balance in subsection (1)(a) includes an FDP credit under section OC 7, the company must make the election under subsection (1) no later than the end of the tax year in which the debit date for the transfer of the FDP credit occurs.
Mandatory transfer
(5) In the absence of an election under subsection (1)(a), an FDPA company is treated as having chosen to transfer a credit balance that includes an FDP credit under section OC 6 during the tax year when the FDP credit has not been cancelled by a later FDP debit under section OC 14 before the end of the company’s accounting year corresponding to the tax year.
Cancellation order
(6) For the purposes of subsection (5), debits are treated as reducing credits in the order in which the credits arise.
Table references
(7) The table references are as follows:
(a) the FDP debit in subsection (2)(a) is referred to in table O4: FDP debits, row 9 (transfer to policyholder credit account):
(b) the policyholder credit in subsection (2)(b) is referred to in table O13: policyholder credits, row 3 (transfer from FDP account):
(c) the FDP credit in subsection (4) is referred to in table O3: FDP credits, row 4 (dividend derived with FDP credit):
(d) the FDP credit in subsection (5) is referred to in table O3: FDP credits, row 2 (payment of FDP):
(e) the FDP debit in subsection (5) is referred to in table O4: FDP debits, row 3 (refund of FDP).
CTR companies
(8) Despite subsection (1), an FDPA company that is also a CTR company may not choose to make the transfer.
Credit and debit dates
(9) The credit dates and the debit dates for the credit balance and the credits transferred are—
(a) the day of election for the credit balance transferred at the company’s election under subsection (1); and
(b) the last day of the tax year for a credit that the company is treated under subsection (5) as having chosen to transfer.
Defined in this Act: accounting year, amount, CTR company, dividend, FDP, FDP account, FDP credit, FDP debit, FDPA company, pay, PCA company, policyholder credit, policyholder credit account, tax year,
Compare: 2004 No 35 ss MG 5(1)(b), (2)(b), MG 7
OC 21 FDPA transfer to group account
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Debit
(1) An FDPA company has an FDP debit for an amount equal to the amount of an FDP credit under section OP 59 (Consolidated FDPA group company’s credit) for the transfer of a credit to the FDP account of the consolidated group of which the company is part.
Table references
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 10 (transfer to group account). The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 5 (group company’s credit).
Debit date
(3) The debit date is the same as the credit date recorded in the consolidated group’s FDP account.
Defined in this Act: amount, consolidated group, FDP account, FDP credit, FDP debit, FDPA company,
Compare: 2004 No 35 s MG 16(3)
OC 22 FDPA breach of FDP ratio
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Debit
(1) An FDPA company has an FDP debit for a breach of the benchmark dividend rules in section OC 28(4) for an amount calculated using the formula—
net dividends × FDP ratio − credits attached.
Definition of items in formula
(2) In the formula,—
(a) net dividends is the total amount of all dividends paid by the company during the tax year, excluding imputation credits and FDP credits attached to the dividends:
(b) FDP ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios) or, if it is less, the greatest FDP ratio of dividends paid by the company during the tax year:
(c) credits attached is the total amount of all FDP credits attached to dividends paid by the company during the tax year.
Table reference
(3) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 11 (breach of FDP ratio).
Ratio change declaration
(4) A debit under subsection (1) does not arise if the FDPA company provides a ratio change declaration under section OC 28(6).
Debit date
(5) The debit date is the last day of the tax year.
Defined in this Act: amount, benchmark dividend, dividend, FDP account, FDP credit, FDP debit, FDP ratio, FDPA company, imputation credit, pay, tax year,
Compare: 2004 No 35 ss MG 5(1)(f), (2)(e), MG 8(4)
OC 23 FDPA breach of FDP ratio by PCA company
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Debit
(1) An FDPA company has an FDP debit for a tax year for an amount described in subsection (2) when—
(a) the company is also a PCA company; and
(b) the company is not also a CTR company; and
(c) during the tax year the company pays a dividend with an FDP credit attached; and
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(d) the dividend does not result from an election by—
(i) a statutory producer board under sections OB 73 to OB 75 (which relate to producer boards’ notional distributions); or
(ii) a co-operative company under sections OB 78 to OB 80 (which relate to co-operative companies’ notional distributions); and
(e) a positive amount exists for the total amount of the company’s policyholder income and policyholder net loss for the tax year under the policyholder base calculation for each tax year of the FDP reference period; and
(f) the shareholder FDP ratio for the FDP reference period is more than the policyholder FDP ratio.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 12 (breach of FDP ratio by PCA company).
Amount of debit
(3) The amount of the debit is—
(a) the maximum deficit debit if the credit balance in the FDP account at the end of the tax year, but before the debit arises, is more than the maximum deficit debit; or
(b) the reduced deficit debit if paragraph (a) does not apply.
Consolidated group
(4) This section applies, modified as necessary, to a consolidated group with a policyholder credit account as if the group were a single company. In the application of this section to the group,—
(a) the definition of the item total credits in the definition of policyholder FDP ratio in section OC 37(3) is read as referring to a transfer under section FM 30(3) and (4) (Application of certain provisions to consolidated groups) to the group’s policyholder credit account; and
(b) a dividend paid between group companies is disregarded.
Debit date
(5) The debit date is the last day of the tax year.
Defined in this Act: amount, company, CTR company, consolidated group, co-operative company, dividend, FDP, FDP account, FDP credit, FDP debit, FDP ratio, FDP reference period, FDPA company, income tax, maximum deficit debit, PCA company, policyholder base, policyholder credit account, policyholder FDP ratio, policyholder income, policyholder net loss, reduced deficit debit, shareholder, shareholder FDP ratio, statutory producer board, tax year,
Compare: 2004 No 35 ss MG 5(1)(g), (2)(e), MG 8B, MG 16A(1B)
OC 24 FDPA debit for loss of shareholder continuity
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Debit
(1) An FDPA company has an FDP debit for the amount equal to the amount of an FDP credit retained in the FDP account and unused before the date on which shareholder continuity is lost.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 13 (debit for loss of shareholder continuity).
Debit date
(3) The debit date is the day of loss of shareholder continuity.
Avoidance arrangements
(4) Section GB 41 (FDPA arrangements for carrying amounts forward) may apply to treat a company as not meeting the requirements of this section.
Defined in this Act: amount, FDP account, FDP credit, FDP debit, FDPA company, shareholder,
Compare: 2004 No 35 s MG 5(1)(i), (2)(g), (3), (4)
OC 25 FDPA tax advantage arrangement
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Debit
(1) An FDPA company has an FDP debit for the amount of a debit for a tax advantage arrangement determined under sections GB 35 and GB 36 (which relate to imputation arrangements to obtain tax advantage).
Table reference
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 14 (tax advantage arrangement).
Debit date
(3) The debit date is the last day of the tax year in which the tax advantage arrangement began.
Defined in this Act: amount, arrangement, FDP debit, FDPA company, tax advantage, tax year,
Compare: 2004 No 35 s MG 5(1)(h), (2)(f)
OC 26 FDPA final balance
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Debit
(1) An FDPA company has an FDP debit for a credit balance in the FDP account when the company stops being an FDPA company.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 15 (final balance).
Debit date
(3) The debit date is the day the company stops being an FDPA company.
Defined in this Act: FDP account, FDP debit, FDPA company,
Compare: 2004 No 35 s MG 5(1)(j), (2)(h)
FDP credits attached to dividends
OC 27 FDP credits attached to dividends
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Attaching FDP credits
(1) When an FDPA company pays a dividend, it may attach an FDP credit to the dividend. Subsection (2) overrides this subsection.
Exclusion
(2) Subsection (1) does not apply to an FDPA company that is also a CTR company.
FDP ratio for dividend
(3) A dividend with an FDP credit attached has an FDP ratio calculated using the formula—
Definition of items in formula
(4) In the formula,—
(a) credit attached is the amount of FDP credit attached to the dividend:
(b) net dividends is the amount of dividends paid, excluding imputation credits and FDP credits.
Maximum permitted ratio
(5) A dividend with an FDP credit attached must not have an FDP ratio that is more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).
Defined in this Act: amount, company, CTR company, dividend, FDP, FDP account, FDP credit, FDP ratio, FDPA company, imputation credit, maximum permitted ratio, pay,
Compare: 2004 No 35 ss MG 6, MG 8(1), (2)
OC 28 FDPA benchmark dividend rules
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When this section applies
(1) This section applies when an FDPA company pays a dividend on more than 1 occasion during a tax year. Subsection (2) overrides this subsection.
Exclusions
(2) This section does not apply to a dividend that is the subject of an election by—
(a) a statutory producer board under sections OB 73 to OB 75 (which relate to statutory boards’ notional distributions); and
(b) a co-operative company under sections OB 78 to OB 80 (which relate to co-operative companies’ notional distributions).
Benchmark dividend
(3) The first dividend of the tax year is the benchmark dividend.
Same FDP ratio
(4) The FDP ratio of a dividend paid after the benchmark dividend must be the same as the FDP ratio of the benchmark dividend.
Breach of FDP ratio
(5) A breach of subsection (4) gives rise to an FDP debit under section OC 22 (table O4: FDP debits, row 11 (breach of FDP ratio)) for an amount calculated using the formula in section OC 22(1).
Ratio change declaration
(6) An FDPA company may notify the Commissioner that the dividend is not part of an arrangement to obtain a tax advantage by providing a ratio change declaration stating that the dividend is not part of an arrangement to which sections GB 35 and GB 36 (which relate to imputation arrangements to obtain tax advantage) apply. The company must provide the declaration before the dividend is paid, or by a later date if the Commissioner allows. For the purposes of this subsection, the dividend must not be part of an arrangement to obtain a tax advantage. This subsection overrides subsection (5).
Consolidated group
(7) This section applies, modified as necessary, to a consolidated group as if it were a single company.
Group debit
(8) Under section OP 54 (When credits and debits arise only in consolidated FDP group accounts), a breach of an FDP ratio alternatively gives rise to an FDP debit under section OP 72 (Consolidated FDPA breach of FDP ratio) (table O22: FDP debits of consolidated group, row 10 (breach of FDP ratio)) if the company is part of a consolidated group.
Treatment of group dividends
(9) In the application of this section to a consolidated group, a dividend paid between group companies is disregarded.
Defined in this Act: amount, arrangement, benchmark dividend, Commissioner, company, consolidated group, co-operative company, dividend, FDP, FDP debit, FDP ratio, FDPA company, pay, statutory producer board, tax advantage, tax year,
Compare: 2004 No 35 ss MG 8(2), (3), MG 16A(1)
OC 29 FDP credits and imputation credits attached to dividends
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Attaching combined credits
(1) When an FDPA company pays a dividend, it may attach both an FDP credit and an imputation credit to the dividend.
Combined ratio
(2) A dividend with combined credits attached has a combined imputation and FDP ratio calculated using the formula—
Definition of items in formula
(3) In the formula in subsection (2),—
(a) combined credits attached is the total amount of FDP credits and the imputation credits attached to the dividend:
(b) net dividends is the amount of dividends paid, excluding the amount of FDP credits and the imputation credits.
Maximum permitted ratio
(4) A dividend with combined credits attached must not have a combined imputation and FDP ratio that is more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).
Breach of combined ratio breach
(5) A breach of the maximum ratio referred to in subsection (4) gives rise to an excess credit amount that is calculated using the formula—
net dividends × (combined ratio − maximum ratio).
Definition of items in formula
(6) In the formula in subsection (5),—
(a) net dividends is the amount of dividends paid, excluding FDP credits and the imputation credits:
(b) combined ratio is the combined imputation and FDP ratio of the dividend:
(c) maximum ratio is the maximum combined imputation and FDP ratio permitted under subsection (4).
Defined in this Act: amount, basic rate, combined imputation and FDP ratio, company, dividend, excess credit amount, FDP credit, FDP ratio, FDPA company, imputation credit, income tax, income year, maximum permitted ratio, pay, tax year,
Compare: 2004 No 35 s MG 10
Further FDP
OC 30 Payment of further FDP for closing debit balance
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Liability
(1) An FDPA company or consolidated FDP group is liable to pay further FDP for a closing debit balance in the FDP account of the company or the group.
Due date
(2) The company must pay the further FDP to the Commissioner no later than the 20 June following the end of the tax year.
Application of other provisions
(3) When it is appropriate for the purposes of this section, the other sections of this Act and the Tax Administration Act 1994—
(a) apply to further FDP as if they addressed further FDP and not income tax; and
(b) apply, modified as necessary, to ensure their application to further FDP rather than income tax; and
(c) do not override the FDP rules or section 103 of the Tax Administration Act 1994.
Defined in this Act: amount, Commissioner, company, consolidated FDP group, FDP account, FDP rules, FDPA company, further FDP, income tax, pay, tax year,
Compare: 2004 No 35 s MG 9(1), (2), (6)
OC 31 Payment of further FDP when company no longer New Zealand resident
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Liability
(1) An FDPA company is liable to pay further FDP for a debit balance in the company’s FDP account when the company stops being resident in New Zealand.
Due date
(2) The company must pay the further FDP to the Commissioner by the day the company stops being resident in New Zealand.
Paramount section
(3) A company to which this section applies that stops being an FDPA company on the last day of a tax year is liable for further FDP under this section and not under section OC 30.
Application of other provisions
(4) Section OC 27(3) applies to the treatment of further FDP under this section.
Defined in this Act: Commissioner, FDP account, FDP rules, FDPA company, further FDP, pay, resident in New Zealand, tax year,
Compare: 2004 No 35 s MG 9(3)
OC 32 Reduction of further FDP
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Debit at previous year-end
(1) An FDPA company’s liability for further FDP under section OC 30 or OC 31 may be reduced under subsection (2) if—
(a) a debit balance existed in the company’s FDP account at the end of a tax year; and
(b) a credit that arises in the account in the following tax year is less than the debit balance; and
(c) the company notifies the Commissioner.
Amount of reduction
(2) The liability is reduced by the amount that is the debit balance for the tax year less the total amount of credits for the following tax year.
Defined in this Act: amount, Commissioner, FDP account, FDP credit, FDPA company, further FDP, notify, tax year,
Compare: 2004 No 35 s MG 9(7), (8)
OC 33 FDP paid satisfying liability for further FDP
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Election
(1) On meeting the requirements of subsection (2), an FDPA company that is liable for further FDP may choose to satisfy the liability through a payment of FDP.
Requirements
(2) The company must pay the FDP—
(a) after the end of the tax year in which the relevant debit balance arises; and
(b) for an income year corresponding to a tax year in which the company is an FDPA company.
Payment credited
(3) The payment of FDP satisfies the company’s liability to pay further FDP.
When treated as paid
(4) The further FDP is treated as paid on the date the Commissioner receives the payment of FDP.
Defined in this Act: Commissioner, company, FDP, FDPA company, further FDP, income year, pay, tax year,
Compare: 2004 No 35 s MG 9(4), (5A)
OC 34 Further FDP paid satisfying liability for FDP
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Election
(1) A company that pays further FDP may choose to treat the payment as satisfying a liability of the company to pay FDP.
FDPA company status
(2) The liability referred to in subsection (1) must be for an income year that corresponds with a tax year in which the company is an FDPA company.
Alternative for consolidated group
(3) A company that is part of a consolidated FDP group may choose that the payment under subsection (1) satisfies a group liability for FDP owed by another group company when or after the payment is made.
Defined in this Act: company, consolidated FDP group, FDP, FDPA company, further FDP, income year, pay, tax year,
Compare: 2004 No 35 ss MG 9(5), MG 16(6)
Some definitions
OC 35 Meaning of FDP reference period
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When this section applies
(1) This section applies for the purposes of sections OC 23 and OC 36 to OC 39.
Meaning
(2) FDP reference period, for an FDPA company, means the period comprising the tax year and the longest period of consecutive tax years in which the FDPA company did not pay a dividend with an FDP credit attached that—
(a) starts on or after the debit date for the debit; and
(b) ends on the last day of the tax year that falls before the tax year in which the dividend referred to in section OC 23(1)(c) is paid.
Defined in this Act: dividend, FDP credit, FDPA company, pay, tax year,
Compare: 2004 No 35 ss MG 8B(4), OB 1 DWP reference period
OC 36 Meaning of maximum deficit debit
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When this section applies
(1) This section applies for the purposes of section OC 23.
Meaning
(2) Maximum deficit debit means the amount calculated using the formula—
(shareholder ratio − policyholder ratio) × net result × (1 − tax rate).
Definition of items in formula
(3) In the formula,—
(a) shareholder ratio is an FDPA company’s shareholder FDP ratio for the FDP reference period:
(b) policyholder ratio is the company’s policyholder FDP ratio for the FDP reference period:
(c) net result is the amount of the company’s policyholder income less its policyholder net losses for the FDP reference period under the policyholder base calculation for each tax year:
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(d) tax rate is the basic rate of income tax set out in—
(i) schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) if the company is not a Maori authority; or
(ii) schedule 1, part A, clause 7 if the company is a Maori authority.
Defined in this Act: amount, basic rate, FDP reference period, income tax, Maori authority, policyholder base, policyholder FDP ratio, policyholder income, policyholder net loss, shareholder FDP ratio, tax year,
Compare: 2004 No 35 ss MG 8B(4), OB 1 maximum deficit debit
OC 37 Meaning of policyholder FDP ratio
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When this section applies
(1) This section applies for the purposes of sections OC 23 and OC 36.
Meaning
(2) Policyholder FDP ratio means the ratio of credits to the underlying amount that is calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) total credits is the total policyholder credits under section OJ 4 (PCA transfer from FDP account) (table O13: policyholder credits, row 3 (transfer from FDP account)) in an FDPA company’s policyholder credit account during the FDP reference period:
(b) net result is the amount of the company’s policyholder income less the amount of policyholder net losses for the FDP reference period under the policyholder base calculation for each tax year:
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(c) tax rate is the basic rate of income tax set out in—
(i) schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) if the company is not a Maori authority; or
(ii) schedule 1, part A, clause 7 if the company is a Maori authority.
Defined in this Act: amount, basic rate, FDP reference period, FDPA company, income tax, Maori authority, policyholder base, policyholder credit, policyholder credit account, policyholder income, policyholder net loss, tax year,
Compare: 2004 No 35 ss MG 8B(4), OB 1 policyholder DWP ratio
OC 38 Meaning of reduced deficit debit
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When this section applies
(1) This section applies for the purposes of section OC 23.
Meaning
(2) Reduced deficit debit means the amount calculated for a tax year using the formula—
Definition of items in formula
(3) In the formula,—
(a) balance is the credit balance in an FDPA company’s FDP account at the end of the previous tax year:
(b) FDPC is the total amount of all FDP credits attached to dividends paid by the company during the FDP reference period:
(c) dividends is the total amount of all dividends paid by the company during the FDP reference period:
(d) PCAC is the total amount of policyholder credits under section OJ 4 (PCA transfer from FDP account) (table O13: policyholder credits, row 3 (transfer from FDP account)) in the company’s policyholder credit account during the FDP reference period:
(e) net result is the amount of the company’s policyholder income less the amount of policyholder net losses for the FDP reference period under the policyholder base calculation for each tax year:
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(f) tax rate is the basic rate of income tax set out in—
(i) schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) if the company is not a Maori authority; or
(ii) schedule 1, part A, clause 7 if the company is a Maori authority.
Defined in this Act: amount, basic rate, dividend, FDP account, FDP credit, FDP reference period, FDPA company, income tax, Maori authority, pay, policyholder base, policyholder credit, policyholder credit account, policyholder income, policyholder net loss, tax year,
Compare: 2004 No 35 ss MG 8B(4), OB 1 reduced deficit debit
OC 39 Meaning of shareholder FDP ratio
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When this section applies
(1) This section applies for the purposes of sections OC 23 and OC 36.
Meaning
(2) Shareholder FDP ratio means the ratio of the credits to the underlying amount that is calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) credits attached is the total amount of all FDP credits attached to dividends paid by an FDPA company during the FDP reference period:
(b) total dividends is the total amount of all dividends paid by the company during the FDP reference period.
Defined in this Act: amount, dividend, FDP credit, FDP reference period, pay,
Compare: 2004 No 35 ss MG 8B(4), OB 1 shareholder DWP ratio
Table O3: FDP credits
| Row | FDP credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | FDP paid | day of payment | section OC 6 |
| 3 | Further FDP paid | day of payment | section OC 6 |
| 4 | FDP credit attached to dividend derived | day on which dividend is paid | section OC 7 |
| 5 | FDP paid on transfer from conduit tax relief account | 31 March | section OC 8 |
| 6 | Transfer from imputation credit account on account of net foreign attributed income for income year | debit date in imputation credit account | section OC 9 |
| 7 | FDP paid for debit balance in company's conduit tax relief account | day of payment | section OC 10 |
| 8 | FDP credit attached to dividend and shown in credit transfer notice | day on which notice is given | section OC 11 |
| 9 | Reversal of debt for tax advantage arrangement | debit date of debit | section OC 12 |
Table O4: FDP debits
| Row | FDP debit | Debit date | Further defined |
|---|---|---|---|
| 1 | Opening debit balance | 1 April | section OA 7 |
| 2 | FDP credit attached to dividend paid | day of payment | section OC 13 |
| 3 | Refund of FDP | day of refund | section OC 14 |
| 4 | Overpaid FDP applied to satisfy tax liability | day of application | section OC 15 |
| 5 | Refund of tax credit | day of refund | section OC 16 |
| 6 | FDP credit attached to dividend and shown in credit transfer notice | day of payment | section OC 17 |
| 7 | Transfer of closing credit balance to companyy's imputation credit account | 31 March | section OC 18 |
| 8 | Transfer of credit balance to company's conduit tax relief account | 31 March | section OC 19 |
| 9 | Transfer of credit balance to company's policyholder credit account | set out in section 20 | section OC 20 |
| 10 | Transfer of credit to group FDP account | credit date under in group account | section OC 21 |
| 11 | Debit for breach of FDP ratio | 31 march | section OC 22 |
| 12 | Breach of FDP ratio by FDPA company that is also PCA company | 31 March | section OC 23 |
| 13 | Debit for loss of shareholder continuity | day of loss of continuity | section OC 24 |
| 14 | Debit for tax advantage arrangement | last day of tax year in which arrangement began | section OC 25 |
| 15 | Final balance when FDPA company status ends | day of cessation | section OC 26 |
Subpart OD—Conduit tax relief accounts (CTRA)
Introductory provisions
OD 1 General rules for companies with CTR accounts
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CTR company
(1) A foreign dividend payment account (FDPA) company may choose to become a conduit tax relief (CTR) company.
CTR account
(2) A CTR company must maintain a CTR account for a tax year. The account is a record of CTR credits and CTR debits that arise in the account during the tax year.
Credits
(3) Credits to the account include the amount of a tax credit calculated under section LQ 1 or LQ 2 (which relate to tax credits for conduit tax relief) in relation to the income tax imposed on foreign attributed income and the proportion that non-resident shareholders have to total shareholders. Section RG 7 (Reduction of payments for conduit tax relief) applies to reduce the amount of foreign dividend payment (FDP) payable for a foreign dividend.
Debits
(4) Debits to the account include the amount of a CTR credit attached to a dividend paid to the company’s non-resident shareholders.
Group accounts
(5) A consolidated group must maintain a group CTR account if a group company is a CTR company.
Resident shareholder continuity requirements
(6) The carrying forward of a credit in the company’s CTR account is subject to the resident shareholder continuity requirements of section OD 16.
Defined in this Act: amount, amount of tax, CTR account, CTR company, CTR credit, CTR debit, consolidated group, dividend, FDP, FDPA company, foreign attributed income, income tax, non-resident, non-resident passive income, pay, shareholder, tax credit, tax year,
Compare: 2004 No 35 ss MI 2(1), (4), MI 4(1)(a), MI 5(1)(a), MI 14(1), NG 9(1)(a)
OD 2 CTR accounts
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General rules
(1) The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to the CTR account of a CTR company.
Credits and debits of consolidated groups
(2) Under section OP 79 (When credits and debits arise only in CTR group accounts), certain credits and debits do not arise in the account if the company is part of a consolidated group.
Defined in this Act: CTR account, CTR company, consolidated group, memorandum account,
Compare: 2004 No 35 ss MI 2(4), MI 19(1), (5)
OD 3 Choosing to become CTR company
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Notifying Commissioner
(1) An FDPA company that chooses to become a CTR company must notify the Commissioner of its election no later than the day on which the company is required to file a return of income for the income year that corresponds to the tax year in which the election is made.
Effect of election
(2) A CTR company must maintain the CTR account referred to in section OD 1(2) from—
(a) the first day of the tax year in which the company makes the election; or
(b) the day the Commissioner is notified for the purposes of sections LQ 5, OC 27, OD 20, and RG 7 (which relate to credits attached to dividends).
Defined in this Act: Commissioner, company, CTR account, CTR company, FDPA company, income year, notify, return of income, tax year,
Compare: 2004 No 35 s MI 2(1)–(3)
OD 4 When company stops being CTR company
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Election
(1) A company stops being a CTR company—
(a) by election under subsection (2); or
(b) when the company stops being an FDPA company under section OC 4 (When company chooses to stop being FDPA company).
When election made
(2) A CTR company may make an election under subsection (1)(a) only in a tax year that is later than the tax year in which the company chooses under section OD 3 to become a CTR company.
When company’s status ends
(3) The company ends its status as a CTR company from the first day of the tax year after the tax year in which the election referred to in subsection (1)(a) is made but only if the company—
(a) files an annual imputation credit account (ICA) return for the year of election in the time allowed by section 69 of the Tax Administration Act 1994; and
(b) pays further FDP, if any, under section OD 23 or OD 24 for the year of election.
Continuation of account
(4) The company must continue to maintain its CTR account to the end of the year of election.
Defined in this Act: annual ICA return, company, CTR account, CTR company, FDPA company, further FDP, tax year,
Compare: 2004 No 35 s MI 2(5)–(7)
CTR credits
OD 5 CTRA tax credit for conduit tax relief
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Credit
(1) A CTR company has a CTR credit for a tax year for the amount of a tax credit allowed to the company under section LQ 1 or LQ 2 (which relate to conduit tax relief) for an income year corresponding to the tax year. The amount of the credit is calculated under subsection (3).
Calculating amount of credit
(2) Having determined the amount of its tax credit for a tax year, a CTR company must apportion that amount to calculate the amount of the credit using the formula—
Definition of items in formula
(3) In the formula,—
(a) FDP last day credit is the part of the amount of the FDP credit arising in the company’s FDP account on the last day of the tax year under section OB 39(1) (ICA transfer for net foreign attributed income) for which the date is set out in subsection (9)(a) of that section:
(b) total FDP credit is the total amount under section OC 9 (FDPA transfer for net foreign attributed income):
(c) amount of tax credit is the amount of the tax credit under section LQ 1 or LQ 2.
Table references
(4) The CTR credit in subsection (1) is referred to in table O5: CTR credits, row 2 (tax credit for conduit tax relief). The FDP credit in subsection (3)(b) is referred to in table O3: FDP credits, row 6 (transfer for net foreign attributed income).
Credit dates
(5) The credit date is—
(a) the last day of the tax year corresponding with the income year for which the tax credit is allowed for the amount of the credit calculated under subsection (3); and
(b) the day the company files its return of income for the income year for the balance of the credit.
Defined in this Act: amount, CTR company, CTR credit, FDP account, FDP credit, foreign attributed income, income tax, income year, return of income, tax credit, tax year,
Compare: 2004 No 35 s MI 4(1)(a), (2)(a)
OD 6 CTRA transfer from FDP account
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Credit
(1) A CTR company has a CTR credit for an amount equal to the amount of an FDP debit under section OC 19 (FDPA transfer to CTR account) for a transfer to the CTR account.
Table references
(2) The CTR credit in subsection (1) is referred to in table O5: CTR credits, row 3 (transfer from FDP account). The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 8 (transfer to CTR account).
Credit date
(3) The credit date is the last day of the tax year.
Defined in this Act: amount, CTR account, CTR company, CTR credit, FDP account, FDP debit, tax year,
Compare: 2004 No 35 ss MI 4(1)(e), (2)(e), MI 6(1)
OD 7 CTRA dividend derived with CTR credit
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Credit
(1) A CTR company has a CTR credit for the amount of a CTR credit attached to a dividend derived by the company.
Table reference
(2) The CTR credit in subsection (1) is referred to in table O5: CTR credits, row 4 (dividend derived with CTR credit).
Credit date
(3) The credit date is the day the dividend is paid.
Defined in this Act: amount, CTR company, CTR credit, dividend, pay,
Compare: 2004 No 35 s MI 4(1)(c), (2)(c)
OD 8 CTRA reduction of FDP
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Credit
(1) A CTR company has a CTR credit for the amount of a reduction of FDP allowed to the company under section RG 7 (Reduction of payments for conduit tax relief) for a dividend derived during the tax year.
Table reference
(2) The CTR credit in subsection (1) is referred to in table O5: CTR credits, row 5 (reduction of FDP).
Credit date
(3) The credit date is the due date for payment of FDP under section RG 7.
Defined in this Act: amount, CTR company, CTR credit, dividend, FDP, pay, tax year,
Compare: 2004 No 35 s MI 4(1)(b), (2)(b)
OD 9 CTRA reversal of tax advantage arrangement
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When this section applies
(1) This section applies when it is established that a CTR credit in a CTR company’s CTR account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.
Credit
(2) The company has a CTR credit for an amount that equals the amount of the debit in the company’s CTR account under section OD 18.
Table references
(3) The CTR credit in subsection (2) is referred to in table O5: CTR credits, row 6 (reversal of tax advantage arrangement). The CTR debit in subsection (2) is referred to in table O6: CTR debits, row 10 (tax advantage arrangement).
Credit date
(4) The credit date is the same as the debit date for the debit.
Defined in this Act: amount, arrangement, CTR account, CTR company, CTR credit, CTR debit, tax advantage,
Compare: 2004 No 35 s MI 4(1)(d), (2)(d)
CTR debits
OD 10 CTRA payment of dividend
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Debit
(1) A CTR company has a CTR debit for the amount of a CTR credit attached to a dividend paid by the company.
Table reference
(2) The CTR debit in subsection (1) is referred to in table O6: CTR debits, row 2 (payment of dividend).
Debit date
(3) The debit date is the day of payment.
Defined in this Act: amount, CTR company, CTR credit, CTR debit, dividend, pay,
Compare: 2004 No 35 s MI 5(1)(a), (2)(a)
OD 11 CTRA transfer to FDP account
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Debit
(1) A CTR company has a CTR debit for an amount transferred when a credit balance in the company’s CTR account is treated under subsections (2) and (3) as transferred to the company’s FDP account. The amount of the debit is the smaller of the credit balance and debit balance as set out in subsection (2).
When debit arises
(2) The debit for the transfer referred to in subsection (1) arises when—
(a) a credit balance exists in the company’s CTR account immediately before the end of the tax year; and
(b) a debit balance exists in the company’s FDP account immediately before the end of the tax year.
Finding balances
(3) For the purposes of subsection (2),—
(a) the credit balance in the CTR account is found by including a CTR credit under section OD 5 when the credit date for the credit is the last day of the tax year; and
(b) the debit balance in the FDP account is found by including an FDP credit under section OC 9 (FDPA transfer for net foreign attributed income) for the tax year; and
(c) the credit balance and the debit balance are determined immediately before the transfer under subsection (1) is made.
Amount of debit and credit
(4) The smaller of the credit balance and the debit balance becomes—
(a) a CTR debit:
(b) an FDP credit under section OC 8 (FDPA payment of FDP for transfer from CTR account).
Table references
(5) The table references are as follows:
(a) the CTR debit in subsection (1) is referred to in table O6: CTR debits, row 3 (transfer to FDP account):
(b) the CTR credit in subsection (3)(a) is referred to in table O5: CTR credits, row 2 (tax credit for conduit tax relief):
(c) the FDP credit in subsection (3)(b) is referred to in table O3: FDP credits, row 6 (transfer for net foreign attributed income):
(d) the CTR debit in subsection (4)(a) is referred to in table O6: CTR debits, row 3 (transfer to FDP account):
(e) the FDP credit in subsection (4)(b) is referred to in table O3: FDP credits, row 5 (payment of FDP for transfer from CTR account).
Debit date
(6) The debit date is the last day of the tax year.
Defined in this Act: amount, CTR account, CTR company, CTR credit, CTR debit, FDP account, FDP credit, tax year,
Compare: 2004 No 35 ss MI 5(1)(i), (2)(h), MI 6(2)
OD 12 CTRA transfer to group account
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Debit
(1) A CTR company has a CTR debit for an amount equal to the amount of a CTR credit under section OP 84 (Consolidated CTRA group company’s credit) for a transfer of a credit to the CTR account of the consolidated group of which the company is part.
Table references
(2) The CTR debit in subsection (1) is referred to in table O6: CTR debits, row 4 (transfer to group account). The CTR credit in subsection (1) is referred to in table O23: CTR credits of consolidated groups, row 5 (group company’s credit).
Debit date
(3) The debit date is the day of transfer.
Defined in this Act: amount, CTR account, CTR company, CTR credit, CTR debit, consolidated group,
Compare: 2004 No 35 s MI 5(1)(j), (2)(i)
OD 13 CTRA adjustment for conduit tax relief
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Debit
(1) A CTR company has a CTR debit for the amount of an adjustment under section FF 7(8) (Surplus to foreign dividends).
Table reference
(2) The CTR debit in subsection (1) is referred to in table O6: CTR debits, row 5 (adjustment for conduit tax relief).
Debit date
(3) The debit date is the day the company files a return of income for the tax year corresponding to the income year in which the adjustment occurred.
Defined in this Act: amount, CTR account, CTR company, CTR debit, income year, return of income, tax year,
Compare: 2004 No 35 s MI 5(1)(b), (2)(b)
OD 14 CTRA break in shareholding chain for group company
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Debit
(1) A CTR company that is part of a wholly-owned group has a CTR debit for an amount arising in the circumstances set out in subsections (2) and (3).
When debit arises
(2) A debit under subsection (1) arises when—
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(a) a credit has arisen in the company’s CTR account under—
(i) section OD 5:
(ii) section OD 8; and
(b) the credit has not been cancelled by a later debit; and
(c) sections YD 9 to YD 11 (which relate to the residence of CTR companies and their shareholders) have enabled the credit to arise by treating a CTR group member as a non-resident; and
(d) the CTR group member is no longer a CTR group company because the requirements of section YD 11(4) (Meaning of CTR group member) are no longer met.
Table references
(3) The table references are as follows:
(a) the CTR debit in subsection (1) is referred to in table O6: CTR debits, row 6 (chain break for group company):
(b) the CTR credit in subsection (2)(a)(i) is referred to in table O5: CTR credits, row 2 (tax credit for conduit tax relief):
(c) the FDP credit in subsection (2)(a)(ii) is referred to in table O5: CTR credits, row 5 (reduction of FDP).
Cancellation
(4) To determine whether the credit has been cancelled by a later debit as described in subsection (2)(b),—
(a) credits retain their separate character and are not treated as part of a credit for an opening credit balance under section OA 7 (Opening balances of memorandum accounts); and
(b) a debit is counted only once in the cancellation of a credit; and
(c) debits cancel credits in the order in which the credits arise.
Amount of debit
(5) The amount of the debit is the residual amount after taking into account the amount of any cancellation.
Residence
(6) The residence of companies for the purposes of this section is determined under sections YD 9 to YD 11.
Debit date
(7) The debit date is the day the shareholding chain is broken.
Defined in this Act: amount, company, CTR account, CTR company, CTR credit, CTR debit, CTR group member, FDP, non-resident, shareholder, wholly-owned group,
Compare: 2004 No 35 s MI 5(1)(f), (2)(f), (5), (7)
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OD 15 CTRA break in shareholding chain for company
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Debit
(1) A CTR company that is part of a wholly-owned group has a CTR debit for an amount arising in the circumstances set out in subsections (2) and (3).
When debit arises
(2) The debit arises when—
(a) the company derives a dividend from another company in the same wholly-owned group and the dividend gives rise to a credit under section OD 7 in the company’s CTR account; and
(b) the other company is in the same wholly-owned group when the dividend is derived; and
(c) the credit has not been cancelled by a later debit; and
(d) the company is no longer part of the wholly-owned group because the requirements of section YD 11(4) (Meaning of CTR group member) are no longer met.
Table references
(3) The CTR debit in subsection (1) is referred to in table O6: CTR debits, row 7 (chain break when group membership stops). The CTR credit in subsection (2)(a) is referred to in table O5: CTR credits, row 4 (dividend derived with CTR credit).
Cancellation
(4) To determine whether a credit has been cancelled by a later debit under subsection (2)(c),—
(a) credits retain their separate character and are not treated as part of a credit for an opening credit balance under section OA 7 (Opening balances of memorandum accounts); and
(b) a debit is counted only once in the cancellation of a credit; and
(c) debits cancel credits in the order in which the credits arise.
Amount of debit
(5) The amount of the debit is the residual amount after taking into account the amount of any cancellation.
Debit date
(6) The debit date is the day before the company stops being part of the consolidated group.
Defined in this Act: amount, company, CTR account, CTR company, CTR credit, CTR debit, dividend, pay, wholly-owned group,
Compare: 2004 No 35 s MI 5(1)(g), (2)(f), (5)
OD 16 CTRA increase in resident shareholding
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Debit
(1) A CTR company has a CTR debit for an amount of a CTR credit in the company’s CTR account if the resident shareholding requirements of subsection (2) and section OA 8 (Shareholder continuity requirements for memorandum accounts) are not met.
Table reference
(2) The CTR debit in subsection (1) is referred to in table O6: CTR debits, row 8 (increase in resident shareholding).
Resident shareholding requirements
(3) For the purposes of subsection (1), the resident shareholding requirements are that—
(a) the credit continues to exist to the extent to which it is not reduced by a later CTR debit; and
(b) since the credit date for the credit, the percentage of the company’s shareholders who are resident in New Zealand does not increase by 34% or more; and
(c) an amount that is the CTR debit under subsection (1) arises for an amount of the credit that still exists when the requirement of paragraph (b) is not met.
Supporting rules
(4) The following rules apply for the purposes of subsection (3):
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(a) the percentage of shareholders resident in New Zealand at any time is found by taking the highest of the following percentages:
(i) the percentage of direct voting interests held in the company by residents; and
(ii) the percentage of direct market value interests held in the company, if a direct market value circumstance exists, by residents; and
(iii) if not all shares in the company are shares of the same class, the percentage of total dividends that would be derived by residents if the company were liquidated; and
(b) a credit retains its separate character and is not treated as part of a credit referred to in section OA 7 (Opening balances of memorandum accounts) in a later tax year; and
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(c) the amount by which a credit is reduced by an earlier or later debit is found by—
(i) treating debits as reducing credits in the order in which the credits arise; and
(ii) counting a debit, whether some or all, only once in the reduction of a credit; and
(d) the requirement of subsection (3)(b) is met if the increase in shareholders resident in New Zealand is solely because the requirements of section YD 10(4) (Meaning of CTR holding company) are not met; and
(e) a debit still arises despite an arrangement affecting the company’s shares that has a purpose or effect of defeating the intent and application of the resident shareholding requirements.
Debit date
(5) The debit date is the day on which the shareholding threshold is first reached or passed.
Defined in this Act: amount, arrangement, company, CTR account, CTR company, CTR credit, CTR debit, direct market value circumstance, direct market value interest, direct voting interest, dividend, liquidation, resident in New Zealand, share, shareholder, shares of the same class, tax year,
Compare: 2004 No 35 s MI 5(1)(e), (2)(e), (3)–(6)
OD 17 CTRA breach of CTR ratio
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Debit
(1) A CTR company has a CTR debit for a tax year for a breach of the benchmark dividend rules in section OD 21 for an amount calculated using the formula—
(net dividends × CTR ratio) − credits attached.
Definition of items in formula
(2) In the formula,—
(a) net dividends is the total amount of all dividends paid by the company during the tax year, excluding imputation credits and CTR credits attached to the dividends:
(b) CTR ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios) or, if less, the greatest CTR ratio of a dividend paid by the company during the tax year:
(c) credits attached is the total amount of all CTR credits attached to dividends paid by the company during the tax year.
Table reference
(3) The CTR debit in subsection (1) is referred to in table O6: CTR debits, row 9 (breach of CTR ratio).
No FDP debit
(4) If a CTR company has a debit under this section, no debit arises for the amount in the company’s FDP account.
Ratio change declaration
(5) A debit under subsection (1) does not arise if the CTR company provides a ratio change declaration under section OD 21(6).
Debit date
(6) The debit date is the last day of the tax year in which the breach occurred.
Defined in this Act: amount, benchmark dividend, company, CTR account, CTR company, CTR credit, CTR debit, CTR ratio, dividend, FDP account, imputation credit, tax year,
Compare: 2004 No 35 ss MG 8(4), MI 5(1)(c), (2)(c)
OD 18 CTRA tax advantage arrangement
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Debit
(1) A CTR company has a CTR debit for the amount of a debit for a tax advantage arrangement determined under sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage), which apply to a CTR credit as if it were an FDP credit.
Table reference
(2) The CTR debit in subsection (1) is referred to in table O6: CTR debits, row 10 (tax advantage arrangement).
Debit date
(3) The debit date is the last day of the tax year in which the tax advantage arrangement began.
Defined in this Act: amount, arrangement, CTR company, CTR debit, tax advantage, tax year,
Compare: 2004 No 35 ss MI 5(1)(d), (2)(d), MI 9
OD 19 CTRA final balance
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Debit
(1) A CTR company has a CTR debit for a credit balance in the account when the company stops being a CTR company.
Table reference
(2) The CTR debit in subsection (1) is referred to in table O6: CTR debits, row 11 (final balance).
Debit date
(3) The debit date is the day before the company stops being a CTR company.
Defined in this Act: CTR company, CTR debit,
Compare: 2004 No 35 s MI 5(1)(h), (2)(g)
CTR credits attached to dividends
OD 20 CTR credits attached to dividends
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Attaching CTR credits
(1) When a CTR company pays a dividend to a non-resident shareholder, it may attach a CTR credit to the dividend. Subsection (2) overrides this subsection.
Dividends of producer boards and co-operative companies
(2) Subsection (1) does not apply to a dividend with a CTR credit attached that is subject to an election by—
(a) a statutory producer board under sections OB 73 to OB 75 (which relate to producer boards’ notional distributions); and
(b) a co-operative company under sections OB 78 to OB 80 (which relate to co-operative companies’ notional distributions).
CTR ratio for dividend
(3) A dividend with a CTR credit attached has a CTR ratio calculated using the formula—
Definition of items in formula
(4) In the formula,—
(a) credit attached is the amount of CTR credit attached to the dividend:
(b) net dividends is the amount of the dividend paid, excluding the amount of imputation credit and CTR credit.
Maximum permitted ratio
(5) A CTR credit attached to a dividend must not be more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).
Residence
(6) Residence for the purposes of this section is ascertained under sections YD 9 to YD 11 (which relate to the residence of CTR companies).
Defined in this Act: amount, CTR company, CTR credit, CTR ratio, co-operative company, dividend, imputation credit, maximum permitted ratio, non-resident, pay, shareholder, statutory producer board,
Compare: 2004 No 35 ss MG 8(1), (8), MI 7(2), MI 8(1)
OD 21 CTRA benchmark dividend rules
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When this section applies
(1) This section applies when a CTR company pays a dividend on more than 1 occasion during a tax year. Subsection (2) overrides this subsection.
Exclusions
(2) This section does not apply to a dividend with a CTR credit attached that is subject to an election by—
(a) a statutory producer board under sections OB 73 to OB 75 (which relate to producer boards’ notional distributions); and
(b) a co-operative company under sections OB 78 to OB 80 (which relate to co-operative companies’ notional distributions).
Benchmark dividend
(3) The first dividend of the tax year is the benchmark dividend.
Same CTR ratio
(4) The CTR ratio of a dividend paid after the benchmark dividend must be the same as the CTR ratio of the benchmark dividend.
Debit for breach of CTR ratio
(5) A breach of subsection (4) gives rise to a CTR debit under section OD 17 (table O6: CTR debits, row 9 (breach of CTR ratio)) for an amount calculated using the formula in OD 17(1).
Ratio change declaration
(6) A CTR company may notify the Commissioner that the dividend is not part of an arrangement to obtain a tax advantage by providing a ratio change declaration stating that the dividend is not part of an arrangement to which sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage) applies. The company must provide the declaration before the dividend is paid, or by a later date if the Commissioner allows. For the purposes of this subsection, the dividend must not be part of an arrangement to obtain a tax advantage. This subsection overrides subsection (5).
Consolidated group
(7) This section applies, modified as necessary, to a consolidated group as if it were a single company.
Group debit
(8) If the company is part of a consolidated group, a breach of a CTR ratio alternatively gives rise to a CTR debit under section OP 92 (Consolidated CTRA breach of CTR ratio) (table O24: CTR debits of consolidated groups, row 7 (breach of CTR ratio)).
Treatment of group dividends
(9) In the application of this section to a consolidated group, a dividend paid between group companies is disregarded.
Defined in this Act: amount, arrangement, benchmark dividend, Commissioner, company, CTR company, CTR credit, CTR debit, CTR ratio, consolidated group, co-operative company, dividend, notify, pay, statutory producer board, tax advantage, tax year,
Compare: 2004 No 35 ss MG 8(2), (3), (8), MI 8, MI 22(1)–(3)
OD 22 CTR credits and imputation credits attached to dividends
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Attaching combined credits
(1) When a CTR company pays a dividend, it may attach both a CTR credit and an imputation credit to the dividend.
Combined ratio
(2) A dividend with combined credits attached has a combined imputation and CTR ratio calculated using the formula—
Definition of items in formula
(3) In the formula in subsection (2),—
(a) combined credits is the total amount of CTR credit and imputation credit attached to the dividend:
(b) net dividends is the amount of the dividend paid, excluding the amount of CTR credit and imputation credit.
Maximum permitted ratio
(4) A dividend with combined credits attached must not have a combined imputation and CTR ratio that is more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).
Combined ratio breach
(5) A breach of the maximum ratio set out in subsection (4) gives rise to an excess credit amount that is calculated using the formula—
net dividends × (combined ratio − maximum ratio).
Definition of items in formula
(6) In the formula in subsection (5),—
(a) net dividends is the amount of the dividend paid, excluding the amount of CTR credit and imputation credit:
(b) combined ratio is the combined imputation and CTR ratio of the dividend:
(c) maximum ratio is the maximum combined imputation and CTR ratio permitted under subsection (4).
Defined in this Act: amount, combined imputation and CTR ratio, company, CTR company, CTR credit, dividend, excess credit amount, imputation credit, maximum permitted ratio, pay,
Compare: 2004 No 35 ss MG 10, MI 7(1), MI 8(1)
Payment of FDP and refunds
OD 23 FDP payable for CTR debits
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Liability
(1) A CTR company is liable to pay FDP for the amount of a CTR debit described in subsection (2) that arises in the company’s CTR account during a tax year.
Debits
(2) A debit referred to in subsection (1) is a debit under 1 of the following sections referred to, and rows described in table O6: CTR debits:
(a) section OD 11, row 3 (transfer to FDP account):
(b) section OD 14, row 6 (chain break for group company):
(c) section OD 15, row 7 (chain break when group membership stops):
(d) section OD 16, row 8 (increase in resident shareholding):
(e) section OD 17, row 9 (breach of CTR ratio):
(f) section OD 18, row 10 (tax advantage arrangement):
(g) section OD 19, row 11 (final balance).
No FDP credit
(3) No credit to the company’s FDP account arises for the debits set out in subsection (2)(d) to (f).
Payment date
(4) The company must pay the FDP to the Commissioner no later than—
(a) the 20th day of the month following the end of the quarter in which the debits arise when the FDP is payable for the debits set out in subsection (2)(b) to (g); or
(b) 20 June following the end of the tax year when the FDP is payable for the debit set out in subsection (2)(a).
Application of other provisions
(5) When it is appropriate for the purposes of this section, the other sections of this Act and the Tax Administration Act 1994—
(a) apply as if they addressed FDP and not income tax; and
(b) apply, modified as necessary, to ensure their application to FDP rather than income tax; and
(c) do not override the FDP rules or section 103A of the Tax Administration Act 1994.
Defined in this Act: amount, arrangement, Commissioner, company, CTR account, CTR company, CTR debit, CTR ratio, FDP, FDP account, FDP credit, FDP rules, further FDP, income tax, pay, quarter, resident, tax year,
Compare: 2004 No 35 s MI 10
OD 24 FDP payable on resident’s restricted amalgamation
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Liability
(1) An amalgamated company that is not a CTR company is liable to pay FDP for the amount of an imputation credit that arises in the company’s imputation credit account under section OA 12 (CTR account on resident’s restricted amalgamation).
Due date
(2) The due date for payment of the FDP to the Commissioner is the 20th day of the month following the end of the quarter in which the resident’s restricted amalgamation occurred.
No credit
(3) The payment of the FDP does not give rise to a credit in the company’s imputation credit account or FDP account.
Defined in this Act: amalgamated company, amount, Commissioner, CTR company, FDP, FDP account, imputation credit, imputation credit account, pay, quarter, resident’s restricted amalgamation,
Compare: 2004 No 35 s MI 13(7)
OD 25 Refunds on transfers to CTR account
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Refund
(1) A CTR company has a refund for the amount of a CTR credit under section OD 6 (table O5: CTR credits, row 3 (transfer from FDP account)) in the company’s CTR account.
Application of refund
(2) The Commissioner may apply the refund to pay an amount due under the Inland Revenue Acts. This subsection overrides subpart RM (Refunds).
Defined in this Act: amount, Commissioner, CTR account, CTR company, CTR credit, Inland Revenue Acts,
Compare: 2004 No 35 s MI 11
Table O5: conduit tax relief credits
| Row | Conduit tax relief credit | Credit date | Further defined |
|---|---|---|---|
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | Income tax rebate for conduit tax relief | set out in section OD 5 | section OD 5 |
| 3 | Transfer from FDP account | 31 March | section OD 6 |
| 4 | CTR credit attached to dividend derived | day on which dividend is paid | section OD 7 |
| 5 | Reduction of FDP relating to Proportion of non-resident shareholders | due date for payment of FDP | section OD 8 |
| 6 | Reversal of debit for tax advantage arrangement | debit date of debit | section OD 9 |
Table O6: conduit tax relief debits
| Row | Conduit tax relief debit | Debit date | Further defined |
|---|---|---|---|
| 1 | Opening debit balance | 1 April | section OD 7 |
| 2 | FDP credit attached to dividend paid | day of payment | section OD 10 |
| 3 | Transfer to company's FDP account for closing debit balance in FDP account | 31 March | section OD 11 |
| 4 | Transfer of credit to group conduit tax relief account | day of transfer | section OD 12 |
| 5 | Adjustment for conduit relief | day on which return of income with adjustment is filed | section OD 13 |
| 6 | Shareholding chain broken when non-resident shareholder disposes of shares | when shareholding ends | section OD 14 |
| 7 | Chain break when company stops being part of consolidated group | when group relationship stops | section OD 15 |
| 8 | Increase in resident shareholding by 34% or more | day of shareholding change | section OD 16 |
| 9 | Debit for brach of CTR ratio | 31 MMarch | section OD 17 |
| 10 | Debit for tax advantage arrangement | last day of tax year in which arrangement began | section OD 18 |
| 11 | Final balance when CTR company status ends | day of cessation | section OD 19 |
Subpart OE—Branch equivalent tax accounts (BETA)
Introductory provision
OE 1 General rules for companies and other persons with branch equivalent tax accounts
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BETA company
(1) A company resident in New Zealand may choose to be a branch equivalent tax account (BETA) company with a branch equivalent tax account.
BETA person
(2) A person resident in New Zealand who is not a company may choose to be a BETA person with a branch equivalent tax account.
General rules: BETA company
(3) The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to the branch equivalent tax account of a BETA company.
General rules: BETA person
(4) Sections OA 2 and OA 3 apply to a BETA person and their branch equivalent tax account as if references in those sections to a tax year were references to an income year.
Defined in this Act: BETA company, BETA person, branch equivalent tax account, company, income year, memorandum account, resident in New Zealand, tax year,
Compare: 2004 No 35 ss MF 1(1), MF 11(1)
Companies with branch equivalent tax accounts
Introductory provisions
OE 2 Branch equivalent tax accounts of companies
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Accounts
(1) A BETA company must maintain a branch equivalent tax account for a tax year. The account is a record of branch equivalent tax credits and branch equivalent tax debits that arise in the account during the tax year.
Credits
(2) Credits to the account may include a credit for an amount of income tax attributable to foreign attributed income.
Debits
(3) Debits to the account may include a debit for an amount of a foreign dividend payment (FDP) paid on a dividend derived from a controlled foreign company (CFC).
Consolidated groups
(4) A consolidated group has a branch equivalent tax account if a group company is a BETA company, or if the group chooses to have the account.
Group credits and debits
(5) Certain credits and debits arise in the branch equivalent tax account of a consolidated group and not in the account of a group company.
Shareholder continuity requirement
(6) The carrying forward of a credit or a debit in the company’s branch equivalent tax account is subject to the shareholder continuity requirement of section OA 8 (Shareholder continuity requirements for memorandum accounts).
Defined in this Act: amount, BETA company, branch equivalent tax account, branch equivalent tax credit, branch equivalent tax debit, CFC, consolidated group, dividend, FDP, foreign attributed income, income tax, pay, shareholder, tax year,
Compare: 2004 No 35 ss MF 1(3), MF 4(1)(a), (3)(a), (5), MF 7(1)(a), MF 9
OE 3 Choosing to become BETA company
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Election
(1) A company may choose to become a BETA company for a tax year—
(a) at any time during the tax year; or
(b) no later than the day on which the company is required to file a return of income for the tax year; or
(c) by a later date if the Commissioner allows.
Notifying Commissioner
(2) The company must notify the Commissioner of an election under subsection (1)—
(a) no later than 21 days after the date of the election; or
(b) by a later date if the Commissioner allows.
Effect of election
(3) A BETA company must maintain a branch equivalent tax account referred to in section OE 2(1) from the first day of the tax year in which the company makes the election.
Defined in this Act: BETA company, branch equivalent tax account, Commissioner, company, income year, notify, return of income, tax year,
Compare: 2004 No 35 s MF 1(1), (2)
OE 4 When company stops being BETA company
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Election
(1) A BETA company may choose to stop being a BETA company only in a tax year that is later than the tax year in which the company chooses under section OE 3 to become a BETA company.
When company’s status ends
(2) The company ends its status as a BETA company from the first day of the tax year after the tax year in which it makes the election but only if it files an annual imputation credit account (ICA) return for the year of election in the time allowed by section 69 of the Tax Administration Act 1994.
Defined in this Act: annual ICA return, BETA company, tax year,
Compare: 2004 No 35 s MF 1(4), (5)
OE 5 Treatment of attributed CFC income and FIF income in this subpart
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This subpart applies to a person with an attributing interest in a foreign investment fund (FIF) by treating—
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(a) FIF income derived from the person’s interest as attributed CFC income, if the FIF income is calculated—
(i) under the accounting profits method or the branch equivalent method; or
(ii) under a method to which section EX 50(6) or EX 58 (which relate to the calculation of FIF income) applies; and
(b) the fund as a CFC; and
(c) the interest as an income interest.
Defined in this Act: accounting profits method, attributed CFC income, attributing interest, branch equivalent method, CFC, FIF, FIF income, income interest,
Compare: 2004 No 35 s MF 15
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Branch equivalent tax credits
OE 6 BETA payment of income tax on foreign income
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Credit
(1) A BETA company has a branch equivalent tax credit for an amount calculated using the formula—
((CFC income for year − deductions for year) × tax rate) − foreign tax credits − debit balances.
Definition of items in formula
(2) In the formula,—
(a) CFC income for year is the amount of attributed CFC income derived during the income year corresponding to the tax year referred to in subsection (3):
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(b) deductions for year is the total amount in the income year corresponding to the tax year referred to in subsection (3) of—
(i) attributed CFC loss; and
(ii) attributed CFC net loss; and
(iii) FIF loss; and
(iv) FIF net loss:
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(c) tax rate is the basic rate of income tax set out in—
(i) schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) if the company is not a Maori authority; or
(ii) schedule 1, part A, clause 7 if the company is a Maori authority:
(d) foreign tax credits is the amount of foreign tax credits allowed for the income year corresponding to the tax year referred to in subsection (3) under sections LK 1 to LK 7 (which relate to foreign tax credits of CFCs), as applicable:
(e) debit balances is the total amount of all debit balances in a branch equivalent tax account applied to satisfy the company’s income tax liability for the income year corresponding to the tax year referred to in subsection (3).
Table reference
(3) The branch equivalent tax credit in subsection (1) is referred to in table O7: branch equivalent tax credits, row 2 (income tax on foreign income).
Credit date
(4) The credit date is the day the company files the return of income for the tax year.
Defined in this Act: amount, attributed CFC income, attributed CFC loss, attributed CFC net loss, basic rate, BETA company, branch equivalent tax account, branch equivalent tax credit, FIF loss, FIF net loss, foreign tax, income tax, income tax liability, income year, Maori authority, tax year,
Compare: 2004 No 35 s MF 4(1)(a), (2)(a)
OE 7 BETA payment of income tax
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When this section applies
(1) This section applies when—
(a) a BETA company has a debit balance in its branch equivalent tax account; and
(b) the income of the company includes an amount of attributed CFC income; and
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(c) an amount of FDP that gives rise to a debit included in the debit balance has been paid—
(i) directly; or
(ii) by reducing a tax loss; or
(iii) to reduce an FDP liability under section RG 7 (Reduction of payments for conduit tax relief).
Group companies
(2) This section also applies in relation to a BETA company if another company (company B) that is part of the same consolidated group has a debit balance in its branch equivalent tax account that arises in the circumstances set out in subsection (1).
Election
(3) The company or company B may choose to apply some or all of the debit balance under section BC 8 (Satisfaction of income tax liability) to satisfy an income tax liability in relation to the attributed CFC income. The election is made by recording a credit in the branch equivalent tax account with the debit balance.
Credit
(4) The amount that is applied to satisfy the income tax liability is a branch equivalent tax credit in the company’s branch equivalent tax account.
Table reference
(5) The branch equivalent tax credit in subsection (4) is referred to in table O7: branch equivalent tax credits, row 3 (payment of income tax).
Unused portion treated as tax loss component
(6) If the amount that is applied to satisfy the income tax liability for attributed CFC income calculated under subsection (8) is more than the total income tax liability, the unused portion is treated as a tax loss component of the company of an amount calculated using the formula—
Definition of item in formula
(7) In the formula, tax rate is the basic rate of income tax set out in—
(a) schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits), if the company is not a Maori authority; or
(b) schedule 1, part A, clause 7, if the company is a Maori authority.
Income tax paid
(8) For the purposes of this section, the income tax liability —
(a) is calculated by applying the formula in section OE 6(1) on the basis that the item debit balances is zero:
(b) is satisfied to the extent to which the liability is no more than the income tax payable in relation to the amount of the attributed CFC income.
Credit date
(9) The credit date is the day of election.
Defined in this Act: amount, attributed CFC income, basic rate, BETA company, branch equivalent tax account, branch equivalent tax credit, branch equivalent tax debit, company, consolidated group, dividend, FDP, income, income interest, income tax, income tax liability, income year, Maori authority, pay, tax loss component, tax year,
Compare: 2004 No 35 ss MF 4(1)(c), (2)(b), MF 5(4)–(7)
OE 8 BETA unused amount of debit balance
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When this section applies
(1) This section applies for the purposes of section OE 7 when an income tax liability of a BETA company is satisfied by applying a debit balance in the company’s branch equivalent tax account, or in the account of another company in the same consolidated group, and an unused portion of the debit balance remains after the income tax liability is satisfied.
Conversion to tax loss
(2) The unused amount is converted into a tax loss component for the purposes of sections IA 2 to IA 10 (which relate to the treatment of tax losses). The amount of the tax loss component is calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) unused amount is the amount of the debit balance remaining in the branch equivalent tax account:
-
(b) tax rate is the basic rate of income tax set out in—
(i) schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) if the company is not a Maori authority; or
(ii) schedule 1, part A, clause 7 if the company is a Maori authority.
Company’s tax loss
(4) The company that has the tax loss is the company whose income tax liability is satisfied as set out in section OE 7(3).
Defined in this Act: amount, attributed CFC income, basic rate, BETA company, branch equivalent tax account, consolidated group, income tax, income tax liability, Maori authority, pay, tax loss component,
Compare: 2004 No 35 ss MF 4(1)(c), MF 5(4)–(7)
OE 9 BETA refund of FDP
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Credit
(1) A BETA company has a branch equivalent tax credit for the amount of a refund of FDP paid to the company. Subsections (2) and (3) override this subsection.
Refund giving rise to debit
(2) A refund under subsection (1) must be a refund of a payment of FDP that gave rise to a debit under section OE 12.
Reduction
(3) The amount of the credit under subsection (1) is reduced to the extent to which—
(a) the payment of FDP is made before a branch equivalent tax credit arises under section OE 10 in the company’s branch equivalent tax account; and
(b) the amount of the refund is no more than the amount of the credit for loss of shareholder continuity.
Table references
(4) The table references are as follows
(a) the branch equivalent tax credit in subsection (1) is referred to in table O7: branch equivalent tax credits, row 4 (refund of FDP):
(b) the branch equivalent tax debit in subsection (2) is referred to in table O8: branch equivalent tax debits, row 2 (payment of FDP):
(c) the branch equivalent tax credit in subsection (3)(a) is referred to in table O7: branch equivalent tax credits, row 5 (credit for loss of shareholder continuity).
Credit date
(5) The credit date is the day the refund is made.
Defined in this Act: amount, BETA company, branch equivalent tax account, branch equivalent tax credit, branch equivalent tax debit, FDP, pay, shareholder,
Compare: 2004 No 35 s MF 4(1)(d), (2)(c)
OE 10 BETA credit for loss of shareholder continuity
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Credit
(1) A BETA company has a branch equivalent tax credit for the amount of a branch equivalent tax debit retained in the branch equivalent tax account and unused before the date on which shareholder continuity is lost.
Table reference
(2) The branch equivalent tax credit in subsection (1) is referred to in table O7: branch equivalent tax credits, row 5 (credit for loss of shareholder continuity).
Credit date
(3) The credit date is the day of loss of shareholder continuity.
Avoidance arrangements
(4) Section GB 40 (BETA arrangements for carrying amounts forward) may exclude a company from the application of this section.
Defined in this Act: amount, BETA company, branch equivalent tax account, branch equivalent tax credit, branch equivalent tax debit, shareholder,
Compare: 2004 No 35 s MF 4(1)(e), (2)(d), (5), (6)
OE 11 BETA final balance
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Credit
(1) A BETA company has a branch equivalent tax credit for a debit balance in the branch equivalent tax account when the company stops being resident in New Zealand.
Table reference
(2) The branch equivalent tax credit in subsection (1) is referred to in table O7: branch equivalent tax credits, row 6 (final balance).
Credit date
(3) The credit date is the day the company stops being resident in New Zealand.
Defined in this Act: BETA company, branch equivalent tax account, branch equivalent tax credit, resident in New Zealand,
Compare: 2004 No 35 s MF 4(1)(f), (2)(e)
Branch equivalent tax debits
OE 12 BETA payment of FDP
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Debit
(1) A BETA company has a branch equivalent tax debit for the amount of a payment of FDP that—
(a) is calculated before a reduction of liability under section RG 7 (Reduction of payments for conduit tax relief); and
(b) must have been payable in relation to a dividend derived from an income interest in a CFC; and
(c) may have been paid by choosing to reduce a tax loss.
Table reference
(2) The branch equivalent tax debit in subsection (1) is referred to in table O8: branch equivalent tax debits, row 2 (payment of FDP).
Debit date
(3) The debit date is the day of payment.
Defined in this Act: amount, BETA company, branch equivalent tax account, branch equivalent tax debit, CFC, dividend, FDP, income interest, pay, tax loss,
Compare: 2004 No 35 s MF 4(3)(a), (4)(a)
OE 13 BETA reduction in FDP
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Election
(1) A BETA company may choose to use some or all of a credit balance in the company’s branch equivalent tax account to reduce an FDP liability of—
(a) the company; or
(b) another company that is part of the same group of companies when the dividend giving rise to the liability is derived.
Debit
(2) The amount of the reduction is a debit arising in the company’s branch equivalent tax account.
Table reference
(3) The branch equivalent tax debit in subsection (2) is referred to in table O8: branch equivalent tax debits, row 3 (reduction of FDP).
Manner of election
(4) The company makes the election by recording the amount of the credit balance that is used as a debit in the account.
Debit date
(5) The debit date is the due date for the payment of FDP.
Defined in this Act: BETA company, branch equivalent tax account, branch equivalent tax debit, company, dividend, FDP, group of companies, pay,
Compare: 2004 No 35 ss MF 4(3)(b), (4)(b), MF 5(1)–(3)
OE 14 BETA refund of income tax
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Debit
(1) A BETA company has a branch equivalent tax debit for the amount of a refund of income tax that is attributable to income tax paid for an income year on attributed CFC income derived during the income year. Subsection (2) overrides this subsection.
Reduction
(2) The amount of the debit is reduced to the extent to which—
(a) a debit arises in the company’s branch equivalent tax account under section OE 15; and
(b) the income tax was paid before the debit date for the debit for loss of shareholder continuity.
Table references
(3) The branch equivalent tax debit in subsection (1) is referred to in table O8: branch equivalent tax debits, row 4 (refund of income tax). The branch equivalent tax debit in subsection (2)(a) is referred to in table O8: branch equivalent tax debits, row 5 (debit for loss of shareholder continuity).
Debit date
(4) The debit date is the day the refund is made.
Defined in this Act: amount, attributed CFC income, BETA company, branch equivalent tax account, branch equivalent tax debit, income tax, income year, pay, shareholder,
Compare: 2004 No 35 s MF 4(3)(c), (4)(c)
OE 15 BETA debit for loss of shareholder continuity
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Debit
(1) A BETA company has a branch equivalent tax debit for the amount of a branch equivalent tax credit retained in the branch equivalent tax account and unused before the date on which shareholder continuity is lost.
Table reference
(2) The branch equivalent tax debit in subsection (1) is referred to in table O8: branch equivalent tax debits, row 5 (debit for loss of shareholder continuity).
Debit date
(3) The debit date is the day of loss of shareholder continuity.
Avoidance arrangements
(4) Section GB 40 (BETA arrangements for carrying amounts forward) may exclude a company from the application of this section.
Defined in this Act: amount, BETA company, branch equivalent tax account, branch equivalent tax credit, branch equivalent tax debit, shareholder,
Compare: 2004 No 35 s MF 4(3)(d), (4)(d), (5), (6)
OE 16 BETA final balance
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Debit
(1) A BETA company has a branch equivalent tax debit for a credit balance in the branch equivalent tax account when the company stops being resident in New Zealand.
Table reference
(2) The branch equivalent tax debit in subsection (1) is referred to in table O8: branch equivalent tax debits, row 6 (final balance).
Debit date
(3) The debit date is the day the company stops being resident in New Zealand.
Defined in this Act: BETA company, branch equivalent tax account, branch equivalent tax debit, resident in New Zealand,
Compare: 2004 No 35 s MF 4(3)(e), (4)(e)
Persons with branch equivalent tax accounts
Introductory provisions
OE 17 Person choosing to become BETA person
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Election
(1) A person who is eligible under section OE 1(2) and who chooses to become a BETA person may make the election for an income year—
(a) at any time during the income year; or
(b) no later than the day on which the person is required to file a return of income for the income year; or
(c) by a later date if the Commissioner allows.
Notice
(2) The person must notify the Commissioner of the election under subsection (1)—
(a) no later than 21 days after the election; or
(b) by a later date if the Commissioner allows.
Effect of election
(3) A BETA person must maintain a branch equivalent tax account from the first day of the income year in which they make the election.
Defined in this Act: BETA person, branch equivalent tax account, Commissioner, income year, notify, return of income,
Compare: 2004 No 35 s MF 11(1), (2)
OE 18 When person stops being BETA person
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Election
(1) A BETA person may choose to stop the branch equivalent tax account.
When election made
(2) A person may make an election under subsection (1) only in an income year that is later than the income year in which the person chose under section OE 1(2) to become a BETA person.
When person’s status ends
(3) The person ends their status as a BETA person from the first day of the income year after the income year in which the election referred to in subsection (1) is made but only if they file an annual branch equivalent tax account return for the year of election in the time allowed by section 78(3) of the Tax Administration Act 1994.
Defined in this Act: annual branch equivalent tax account return, BETA person, branch equivalent tax account, income year,
Compare: 2004 No 35 s MF 13(1), (2)
Branch equivalent tax credits
OE 19 BETA person’s payment of income tax on foreign income
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Credit
(1) A BETA person has a branch equivalent tax credit for an income year for an amount calculated using the formula—
Definition of items in formula
(2) In the formula,—
(a) tax liability is the person’s income tax liability for the income year:
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(b) CFC or taxable income is the lesser of the person’s—
(i) attributed CFC income derived during the income year; or
(ii) taxable income for the income year:
(c) taxable income is the person’s taxable income for the income year:
(d) foreign tax credits is the foreign tax credits allowed for the income year under sections LK 1 to LK 7 (which relate to tax credits relating to attributed CFC income).
Table reference
(3) The branch equivalent tax credit in subsection (1) is referred to in table O9: person’s branch equivalent tax credits, row 2 (payment of income tax on foreign income).
Credit date
(4) The credit date is the day the person files the return of income for the tax year corresponding to the income year.
Defined in this Act: amount, attributed CFC income, BETA person, branch equivalent tax account, branch equivalent tax credit, foreign tax, income tax, income tax liability income year, return of income, tax year, taxable income,
Compare: 2004 No 35 ss MF 13(1), (2), MF 14
Branch equivalent tax debits
OE 20 BETA person’s payment of income tax
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Election
(1) On meeting the requirements of subsection (4), a BETA person may choose to use some or all of a credit balance in their branch equivalent tax account to satisfy an income tax liability of the person for an income year.
Debit
(2) The amount used to satisfy the income tax liability is a branch equivalent tax debit in the person’s branch equivalent tax account.
Table reference
(3) The branch equivalent tax debit in subsection (2) is referred to in table O10: person’s branch equivalent tax debits, row 2 (payment of income tax).
Requirements
(4) The person may make an election under subsection (1) if—
(a) they derive a dividend from an income interest in a CFC during the income year; and
(b) a credit balance exists in their branch equivalent tax account; and
(c) they have paid the income tax giving rise to a credit included in the credit balance.
Manner of election
(5) The person makes the election by recording the amount as a debit in the branch equivalent tax account.
Income tax paid
(6) Once the election is made, the income tax liability is satisfied to the extent to which the liability is no more than the income tax payable on the amount of the dividend derived.
Debit date
(7) The debit date is the day of election.
Defined in this Act: amount, BETA person, branch equivalent tax account, branch equivalent tax debit, CFC, dividend, income interest, income tax, income tax liability, income year, pay,
Compare: 2004 No 35 ss MF 13(3)(a), MF 14
OE 21 BETA person’s refund of income tax
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Debit
(1) A BETA person has a branch equivalent tax debit for an income year for the amount of a refund of income tax attributable to income tax paid for the income year on attributed CFC income derived during the income year.
Table reference
(2) The branch equivalent tax debit in subsection (1) is referred to in table O10: person’s branch equivalent tax debits, row 3 (refund of income tax).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, attributed CFC income, BETA person, branch equivalent tax debit, income tax, income year, pay,
Compare: 2004 No 35 s MF 13(3)(b)
OE 22 BETA person’s final balance
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Debit
(1) A BETA person has a branch equivalent tax debit for a credit balance in the branch equivalent tax account when the person stops being resident in New Zealand.
Table reference
(2) The branch equivalent tax debit in subsection (1) is referred to in table O10: person’s branch equivalent tax debits, row 4 (final balance).
Debit date
(3) The debit date is the day the person stops being resident in New Zealand.
Defined in this Act: BETA person, branch equivalent tax account, branch equivalent tax debit, resident in New Zealand,
Compare: 2004 No 35 s MF 13(3)(c)
Table O7 branch equivalent tax credits
| Row | Branch equivalent tax credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA7 |
| 2 | Income tax on foreign income derived in income year | day on which return of income is filed | section OE 6 |
| 3 | Debit balance applied to satisfy income tax liability | day of election | section OE 7 |
| 4 | Refund of FDP | day of refund | section OE 9 |
| 5 | Credit for loss of shareholder continuity | day of loss of continuity | section OE 10 |
| 6 | Debit balance when company stops being resident in New Zealand | day of cessation | section OE 11 |
Table O8 branch equivalent tax debits
| Row | Branch equivalent tax credit | Credit date | Further defined |
| 1 | Opening debit balance | 1 April | section OA 7 |
| 2 | FDP paid on dividend derived from CFC | day of payment | section OE 12 |
| 3 | Credit balance applied to satisfy FDP liability | due date for payment of FDP | section OE 13 |
| 4 | Refund of income tax for attributed CFC income | day of refund | section OE 14 |
| 5 | Debit for loss of continuity | day of loss of continuity | section OE 15 |
| 6 | Credit balance when New Zealand residence ends | day of cessation | section OE 16 |
Table O9 person's equivalent tax credits
| Row | Branch equivalent tax credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | Income tax paid on foreign income derived in income year | day on which return of income for income year is filed | section OE 19 |
Table O10 person's equivalent tax debits
| Row | Branch equivalent tax credit | Credit date | Further defined |
| 1 | Opening debit balance | 1 April | section OA 7 |
| 2 | Credit balance applied to satisfy income tax liability | day of election | section OE 20 |
| 3 | Refund of income tax for attributed CFC income | day of refund | section OE 21 |
| 4 | Credit balance when New Zealand residence ends | day of cessation | section OE 22 |
Subpart OF—Available subscribed capital accounts (ASCA)
Introductory provisions
OF 1 General rules for companies with ASC accounts
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ASC account company
(1) A public unit trust or a group investment fund that derives category A income may choose to become an available subscribed capital (ASC) account company. This subsection does not apply to a portfolio tax rate entity.
ASC account
(2) An ASC account company must maintain an ASC account for a tax year. The account is a record of ASC credits and ASC debits that arise in the account during the tax year.
Credits
(3) Credits to the account include redemption proceeds that are less than the ASC company’s available subscribed capital calculated under the slice rule.
Debits
(4) Debits to the account include a transfer of a credit balance to the company’s imputation credit account.
Defined in this Act: ASC account, ASC account company, ASC credit, ASC debit, available subscribed capital, category A income, group investment fund, imputation credit account, portfolio tax rate entity, public unit trust, slice rule, tax year,
Compare: 2004 No 35 ss MJ 1(1), MJ 5(1), MJ 6(1)
OF 2 ASC accounts
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The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to the ASC account of an ASC account company.
Defined in this Act: ASC account, ASC account company, memorandum account,
Compare: 2004 No 35 s MJ 3(1)
OF 3 Choosing to become ASC account company
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Election
(1) A company may choose to become an ASC account company if—
(a) it is a public unit trust or a group investment fund that derives category A income; and
(b) it has issued shares on terms that their redemption will be subject to section CD 22(4) (Returns of capital: off-market share cancellations).
Notifying Commissioner
(2) A company that makes an election under subsection (1) must notify the Commissioner of the election no later than the day on which the company is required to file a return of income for the tax year that corresponds to the income year in which the election is made.
Effect of election
(3) An ASC account company must maintain the ASC account referred to in section OF 1(2) from the day the company chooses to become an ASC account company.
Defined in this Act: ASC account company, category A income, Commissioner, company, group investment fund, income year, notify, public unit trust, return of income, share, tax year,
Compare: 2004 No 35 s MJ 1(1)
ASC credits
OF 4 ASCA redemption credit
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Credit
(1) An ASC account company has an ASC credit when the company redeems a share in the company for an amount calculated using the formula—
ASC amount − redemption proceeds.
Definition of items in formula
(2) In the formula,—
(a) ASC amount is the amount of the available subscribed capital for the redemption calculated under section CD 22(4) (Returns of capital: off-market share cancellations):
(b) redemption proceeds is the amount of the proceeds from the redemption calculated under sections CD 4 to CD 6 (which relate to the nature of a dividend).
Positive result
(3) If the result of the formula in subsection (1) is negative, the amount is treated as zero.
Table reference
(4) The ASC credit in subsection (1) is referred to in table O11: ASC credits, row 2 (redemption credit).
Credit date
(5) The credit date is the day the company redeems the share.
Defined in this Act: amount, ASC account, ASC account company, ASC credit, available subscribed capital, share,
Compare: 2004 No 35 s MJ 5
ASC debits
OF 5 ASCA transfer to imputation credit account
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Election
(1) An ASC account company may choose that some or all of the credit balance in the company’s ASC account is transferred to the company’s imputation credit account.
Debit and credit
(2) The amount of the credit balance transferred is—
(a) an ASC debit for the full amount of the credit balance transferred; and
(b) an imputation credit under section OB 18 (ICA transfer from ASC account) for the amount calculated under subsection (4).
Table references
(3) The ASC debit in subsection (2)(a) is referred to in table O12: ASC debits, row 2 (transfer to imputation credit account). The imputation credit in subsection (2)(b) is referred to in table O1: imputation credits, row 16 (transfer from ASC account).
Amount
(4) The amount of the credit to the imputation credit account is calculated using the formula—
credit balance × maximum imputation ratio.
Definition of items in formula
(5) In the formula,—
(a) credit balance is some or all of the credit balance in the company’s ASC account that the ASC account company chooses to use:
(b) maximum imputation ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).
Timing of election
(6) An election under subsection (1) may be made at any time when the company is an imputation credit account (ICA) company.
Manner of election
(7) A company makes an election under subsection (1) by recording the credit balance transferred as—
(a) a debit in the company’s ASC account; and
(b) a credit in the company’s imputation credit account.
Debit date
(8) The debit date is—
(a) the day of election; or
(b) the day before the company stops being an ICA company if the election is made on the occasion of cessation.
Defined in this Act: amount, ASC account, ASC account company, ASC debit, ICA company, imputation credit, imputation credit account, imputation ratio,
Compare: 2004 No 35 ss ME 4(1)(da), MJ 6
Table O11 ASC credits
| Row | ASC credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | Amount by which ASC is more than proceeds on redemption of shares | day on which shares are redeemed | section OF 4 |
Table O12 ASC debits
| Row | ASC credit | Credit date | Further defined |
| 1 | Opening debit balance | 1 April | section OA 7 |
| 2 | Transfer of credit balance to imputation credit account | set out in section OF 5 | section OF 5 |
Subpart OJ—Policyholder credit accounts (PCA)
Introductory provision
OJ 1 General rules for companies and other persons with policyholder credit accounts
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PCA company
(1) A company resident in New Zealand and carrying on a life insurance business is a policyholder credit account (PCA) company.
PCA person
(2) A person other than a PCA company who carries on a life insurance business and has policyholder income to which section CR 1(4) (Income of life insurer) applies, may choose to have a policyholder credit account.
General rules: PCA company
(3) The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to a PCA company’s policyholder credit account.
General rules: PCA person
(4) Sections OA 2 and OA 3 apply to a PCA person and their policyholder credit account as if references in those sections to a tax year were references to an income year.
Defined in this Act: business, company, income year, life insurance, memorandum account, PCA company, PCA person, policyholder credit account, policyholder income, resident in New Zealand, tax year,
Compare: 2004 No 35 ss ME 15, ME 21, ME 22(1)
Companies with policyholder credit accounts
Introductory provision
OJ 2 Policyholder credit accounts of companies
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Accounts
(1) A PCA company must maintain a policyholder credit account for a tax year. The account is a record of policyholder credits and policyholder debits that arise in the account during the tax year.
Credits
(2) Credits to the account may include a transfer of an amount from the PCA company’s imputation credit account or foreign dividend payment (FDP) account.
Debits
(3) Debits to the account may include a credit balance applied to satisfy a PCA company’s policyholder base income tax liability.
Consolidated groups
(4) A consolidated group has a policyholder credit account if a group company is a PCA company.
Credit and debits arising in group accounts
(5) Certain credits and debits arise in the policyholder credit account of the group and not in the account of a group company.
Defined in this Act: amount, consolidated group, FDP account, imputation credit account, PCA company, policyholder base income tax liability, policyholder credit, policyholder credit account, policyholder debit, tax year,
Compare: 2004 No 35 ss ME 15, ME 17(1), ME 27(1), (3)
Policyholder credits of PCA company
OJ 3 PCA transfer from imputation credit account
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Credit
(1) A PCA company has a policyholder credit for an amount equal to the amount of an imputation debit, as applicable,—
(a) under section OB 47 (ICA transfer to policyholder credit account) if the company is not part of a consolidated group; or
(b) under section OP 44 (Consolidated ICA transfer to policyholder credit account) if the company is part of a consolidated imputation group.
Table references
(2) The table references are as follows:
(a) the policyholder credit in subsection (1) is referred to in table O13: policyholder credits, row 2 (transfer from imputation credit account):
(b) the imputation debit in subsection (1)(a) is referred to in table O2: imputation debits, row 20 (transfer to policyholder credit account):
(c) the imputation debit in subsection (1)(b) is referred to in table O20: imputation debits of consolidated imputation groups, row 18 (transfer to policyholder credit account).
Credit date
(3) The credit date is the same as the debit date recorded for the transfer in the imputation credit account.
Defined in this Act: amount, consolidated group, imputation credit account, imputation debit, PCA company, policyholder credit,
Compare: 2004 No 35 ss ME 14(1), ME 18(1)(a), (2)(a)
OJ 4 PCA transfer from FDP account
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Credit
(1) A PCA company has a policyholder credit for an amount equal to the amount of an FDP debit under section OC 20 (FDPA transfer to policyholder credit account) for the transfer of a credit balance or the amount of a credit from the company’s FDP account.
Table references
(2) The policyholder credit in subsection (1) is referred to in table O13: policyholder credits, row 3 (transfer from FDP account). The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 9 (transfer to policyholder credit account).
Credit date
(3) The credit date is the same as the debit date recorded for the transfer in the FDP account.
Defined in this Act: amount, FDP account, FDP debit, PCA company, policyholder credit,
Compare: 2004 No 35 s ME 18(1)(b), (2)(b)
OJ 5 PCA transfer of life insurance business
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When this section applies
(1) This section applies when a PCA company or a PCA person transfers a life insurance business to another PCA company.
Credit
(2) The PCA company that is the transferee has a policyholder credit for an amount equal to an amount of a policyholder debit under section OJ 11.
Table reference
(3) The policyholder credit in subsection (2) is referred to in table O13: policyholder credits, row 4 (transfer of life insurance business).
Credit date
(4) The credit date is the day the life insurance business is transferred.
Defined in this Act: amount, business, life insurance, PCA company, PCA person, policyholder credit, policyholder credit account, policyholder debit,
Compare: 2004 No 35 s ME 18(1)(c), (2)(c)
OJ 6 PCA credit for maximum deficit in FDP account
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Credit
(1) A PCA company has a policyholder credit for a tax year for an amount equal to the amount of an FDP debit—
(a) that arises in the company’s FDP account under section OC 23 (FDPA breach of FDP ratio by PCA company); and
(b) whose amount is calculated under sections OC 23 and OC 36 (Meaning of maximum deficit debit).
Table references
(2) The policyholder credit in subsection (1) is referred to in table O13: policyholder credits, row 5 (credit for maximum deficit in FDP account). The FDP debit in subsection (1)(a) is referred to in table O4: FDP debits, row 12 (breach of FDP ratio by PCA company).
Credit date
(3) The credit date is the last day of the tax year.
Defined in this Act: amount, FDP account, FDP debit, FDP ratio, PCA company, policyholder credit, tax year,
Compare: 2004 No 35 s ME 18(1)(bb), (2)(bb)
OJ 7 PCA credit for reduced deficit in FDP account
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Credit
(1) A PCA company has a policyholder credit for a tax year for an amount equal to the amount of an FDP debit—
(a) that arises in the company’s FDP account under section OC 23 (FDPA breach of FDP ratio by PCA company); and
(b) whose amount is calculated under sections OC 23 and OC 38 (Meaning of reduced deficit debit).
Table references
(2) The policyholder credit in subsection (1) is referred to in table O13: policyholder credits, row 6 (credit for reduced deficit in FDP account). The FDP debit in subsection (1)(a) is referred to in table O4: FDP debits, row 12 (breach of FDP ratio by PCA company).
Credit date
(3) The credit date is the last day of the tax year.
Defined in this Act: amount, FDP account, FDP debit, FDP ratio, PCA company, policyholder credit, tax year,
Compare: 2004 No 35 s ME 18(1)(bc), (2)(bb)
Policyholder debits of PCA company
OJ 8 PCA payment of tax relating to policyholder base
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Election
(1) A PCA company may choose that some or all of a credit balance in the company’s policyholder credit account is treated as applied to satisfy—
(a) a policyholder base income tax liability of the company; or
(b) a provisional tax liability of the company for its policyholder base.
Manner of election
(2) A company makes an election under subsection (1) by recording as a debit the balance applied to satisfy the policyholder base income tax liability or policyholder base provisional tax.
Effect of election
(3) As a result of an election under this section,—
(a) a policyholder debit arises in the company’s policyholder credit account; and
(b) the company’s liability for the income tax or provisional tax is satisfied.
Table reference
(4) The policyholder debit in subsection (3) is referred to in table O14: policyholder debits, row 2 (payment of tax relating to policyholder base).
Debit date
(5) The debit date is the last day of the company’s income year corresponding to the tax year for which the policyholder base income tax liability or policyholder base provisional tax arises.
Defined in this Act: amount, income tax, income year, pay, PCA company, policyholder base, policyholder base income tax liability, policyholder credit account, policyholder debit, provisional tax, tax year,
Compare: 2004 No 35 ss ME 18(3)(a), (4)(a), ME 19(1), (2)
OJ 9 PCA transfer to imputation credit account
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Election
(1) A PCA company may choose to treat some or all of a credit balance in the company’s policyholder credit account as transferred to an imputation credit account. Subsection (2) overrides this subsection.
Exclusion
(2) An election under subsection (1) excludes an amount that arises when—
(a) the company has adopted a non-standard accounting year; and
(b) during the accounting year, the company has made an election that means the credit balance includes a credit under section OJ 3 or OJ 4; and
(c) the election would result in a debit to the policyholder credit account during the tax year that corresponds to the accounting year.
Debit and credit
(3) The amount of the credit balance transferred is—
(a) a debit in the company’s policyholder credit account; and
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(b) a credit under, as applicable,—
(i) section OB 17 (ICA transfer from policyholder credit account) in the company’s imputation credit account; or
(ii) section OP 20 (Consolidated ICA transfer from group company’s policyholder credit account) in the consolidated imputation group’s imputation credit account.
Table references
(4) The table references are as follows:
(a) the policyholder debit in subsection (3)(a) is referred to in table O14: policyholder debits, row 3 (transfer to imputation credit account):
(b) the imputation credit in subsection (3)(b)(i) is referred to in table O1: imputation credits, row 15 (transfer from policyholder credit account):
(c) the imputation credit in subsection (3)(b)(ii) is referred to in table O19: imputation credits of consolidated imputation groups, row 15 (transfer from company’s policyholder credit account).
Credit balance reduced
(5) Despite subsection (2)(b), the credit balance includes a credit that is cancelled by a later debit to the account. Whether a debit cancels a credit is determined by treating a debit as offsetting a credit in the order in which credits arise in the account.
Other accounts
(6) The company may treat the amount of a credit balance that can be transferred as transferred to—
(a) the company’s imputation credit account; or
(b) the imputation credit account of an imputation group, if the company is part of the group.
Manner of election
(7) The company makes the election by recording the amount of the credit balance transferred as—
(a) a debit in the company’s policyholder credit account; and
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(b) a credit in the imputation credit account of, as applicable,—
(i) the company; or
(ii) the imputation group.
Debit date
(8) The debit date is the day of election.
Defined in this Act: accounting year, amount, consolidated imputation group, FDP account, imputation credit, imputation credit account, imputation group, non-standard accounting year, PCA company, policyholder credit, policyholder credit account, tax year,
Compare: 2004 No 35 ss ME 18(3)(b), (4)(b), ME 19(3)–(6)
OJ 10 PCA transfer to group account
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Debit
(1) A PCA company has a policyholder debit in a tax year for an amount equal to the amount of a policyholder credit under section OP 112 (Consolidated PCA group company’s credit) for a credit transferred to the policyholder credit account of the consolidated group of which the company is part.
Table references
(2) The policyholder debit in subsection (1) is referred to in table O14: policyholder debits, row 4 (transfer to group account). The policyholder credit in subsection (1) is referred to in table O27: policyholder credits of consolidated groups, row 4 (group company’s credit).
Debit date
(3) The debit date is the credit date recorded in the group account for the transfer.
Defined in this Act: amount, consolidated group, PCA company, policyholder credit, policyholder credit account, policyholder debit, tax year,
Compare: 2004 No 35 s ME 27(2)
OJ 11 PCA company’s transfer of life insurance business
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Election
(1) A PCA company may choose to transfer a credit balance in the company’s policyholder credit account to another person on the transfer of the company’s life insurance business to—
(a) another PCA company; or
(b) a PCA person.
Requirements
(2) A PCA company may make an election under subsection (1) if—
(a) the transfer meets the requirements of section EY 45(1) (Policyholder income formula: when life insurance business transferred); and
(b) after the transfer, the company is no longer required to maintain a policyholder credit account.
Debit
(3) As a result of the election, the PCA company that is the transferor has a debit for the amount of the credit balance transferred under subsection (1).
Table reference
(4) The policyholder debit in subsection (3) is referred to in table O14: policyholder debits, row 5 (transfer of life insurance business).
Manner of election
(5) The company makes the election by recording the amount of the credit balance transferred as a debit in the company’s policyholder credit account.
Debit date
(6) The debit date is the day the life insurance business is transferred.
Defined in this Act: amount, business, life insurance, PCA company, PCA person, policyholder credit, policyholder credit account, policyholder debit,
Compare: 2004 No 35 ss ME 18(3)(c), (4)(c), ME 19A
Persons with policyholder credit accounts
Introductory provisions
OJ 12 Choosing to become PCA person
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Notifying Commissioner
(1) A person who is eligible under section OJ 1(2) and who chooses to be a PCA person must notify the Commissioner of their election—
(a) no later than 21 days after the election; or
(b) by a later date if the Commissioner allows.
Effect of election
(2) A PCA person must maintain the policyholder credit account referred to in section OJ 1(2) from the start of the income year in which the PCA person makes the election.
Defined in this Act: Commissioner, income year, notify, PCA person, policyholder credit account,
Compare: 2004 No 35 s ME 21(1), (2)
OJ 13 Choosing to stop being PCA person
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Election
(1) A PCA person may choose to stop being a PCA person.
When election made
(2) An election under subsection (1) may be made only in an income year that is later than the income year in which the person chooses to become a PCA person.
When person’s status as PCA person ends
(3) The person ends their status as a PCA person from the start of the income year following the year of election but only if they file an annual PCA return for the year of election in the time allowed by section 66(3) of the Tax Administration Act 1994.
Defined in this Act: annual PCA return, Commissioner, income year, PCA person,
Compare: 2004 No 35 s ME 21(3), (4)
Policyholder credits of PCA person
OJ 14 PCA person’s equivalent credit
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Credit
(1) A PCA person has a policyholder credit for an equivalent credit, described in a row of table O1: imputation credits, that would arise in the imputation credit account of an imputation credit account (ICA) company if that company were carrying on the person’s life insurance business.
Determining credits arising
(2) The following paragraphs apply to determine what are the equivalent credits:
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(a) a credit under the following sections and described in the following rows of table O1: imputation credits, is excluded:
(i) section OB 9 (ICA dividend derived with imputation credit) row 7 (dividend derived with imputation credit):
(ii) section OB 10 (ICA dividend derived with FDP credit) row 8 (dividend derived with FDP credit):
(iii) section OB 17 (ICA transfer from policyholder credit account) row 15 (transfer from policyholder credit account):
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(b) a credit under section OB 4 (ICA payment of tax) must not be more than the income tax liability that would arise if—
(i) the person’s only activity related to life insurance policies offered or entered into in New Zealand; and
(ii) section RF 2(4) (Non-resident passive income) is disregarded.
Table references
(3) The policyholder credit in subsection (1) is referred to in table O15: person’s policyholder credits, row 2 (treatment of imputation credit account). The imputation credit in subsection (2)(b) is referred to in table O1: imputation credits, row 2 (payment of tax).
Credit date
(4) The credit date is—
(a) the same as the credit date for the equivalent credit; and
(b) the day the relevant dividend is paid if the equivalent credit is for income tax treated as paid by the person under section LE 1, LF 1, or OE 19 (which relate to imputation credits, FDP credits, and foreign tax paid on branch equivalent income).
Defined in this Act: business, dividend, FDP credit, ICA company, imputation credit account, income tax, income tax liability, life insurance, life insurance policy, offered or entered into in New Zealand, pay, PCA person, policyholder credit,
Compare: 2004 No 35 s ME 23(1)(a), (2)(a), (3), (6)(a)
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OJ 15 PCA person’s credit for transfer of life insurance business
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When this section applies
(1) This section applies when a PCA company or a PCA person transfers a life insurance business to another PCA person.
Credit
(2) The PCA person who is the transferee has a policyholder credit for an amount equal to an amount of a policyholder debit under section OJ 18.
Table reference
(3) The policyholder credit in subsection (2) is referred to in table O15: person’s policyholder credits, row 3 (transfer of life insurance business).
Credit date
(4) The credit date is the day the life insurance business is transferred.
Defined in this Act: amount, business, life insurance, PCA company, PCA person, policyholder credit, policyholder debit,
Compare: 2004 No 35 s ME 23(1)(b), (2)(b)
Policyholder debits of PCA person
OJ 16 PCA person’s payment of tax relating to policyholder base
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Election
(1) A PCA person may choose that some or all of the credit balance in the person’s policyholder credit account is applied to satisfy—
(a) a policyholder base income tax liability of the person; or
(b) a provisional tax liability of the person for the person’s policyholder base.
Manner of election
(2) The person makes an election under subsection (1) by recording as a debit the balance applied to satisfy the policyholder base income tax liability or policyholder base provisional tax liability.
Effect of election
(3) As a result of the election,—
(a) a policyholder debit arises in the person’s policyholder credit account; and
(b) the person’s liability for the income tax or provisional tax is satisfied.
Table reference
(4) The policyholder credit in subsection (3)(a) is referred to in table O16: person’s policyholder debits, row 2 (payment of tax relating to policyholder base).
Debit date
(5) The debit date is the date of the election referred to in subsections (1) to (3).
Defined in this Act: income tax, income year, pay, PCA person, policyholder base, policyholder base income tax liability, policyholder credit account, policyholder debit, provisional tax, tax year,
Compare: 2004 No 35 ss ME 23(4)(a), (5)(a), ME 24
OJ 17 PCA person’s equivalent debit
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Debit
(1) A PCA person has a policyholder debit for an equivalent debit, described in a row of table O2: imputation debits, that would arise in the imputation credit account of an ICA company if that company were carrying on the person’s life insurance business.
Determining debits arising
(2) The following paragraphs apply to determine what are the equivalent debits:
-
(a) a debit under the following sections and described in the following rows of table O2: imputation debits, is excluded—
(i) section OB 41 (ICA debit for loss of shareholder continuity), row 14 (debit for loss of shareholder continuity):
(ii) section OB 42 (ICA on-market cancellation), row 15 (on-market cancellation):
(iii) section OB 47 (ICA transfer to policyholder credit account), row 20 (transfer to policyholder credit account):
(b) the amount of a refund of a payment of income tax that gave rise to a credit under section OJ 14 is treated as a debit in the person’s policyholder credit account.
Table references
(3) The policyholder debit in subsection (1) is referred to in table O16: person’s policyholder debits, row 3 (treatment of imputation credit account). The policyholder credit in subsection (2)(b) is referred to in table O15: person’s policyholder credits, row 2 (equivalent credit).
Debit date
(4) The debit date is—
(a) the same as the debit date for the equivalent debit; or
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(b) the date the credit would have arisen in the imputation credit account of the PCA person if—
(i) they were an ICA company in relation to the business of providing life insurance; and
(ii) their policyholder credit account were an imputation credit account.
Defined in this Act: amount, business, ICA company, imputation credit account, imputation debit, income tax, life insurance, pay, PCA person, policyholder credit account, policyholder debit,
Compare: 2004 No 35 s ME 23(4)(b), (5)(b)
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OJ 18 PCA person’s debit for transfer of life insurance business
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Election
(1) A PCA person may choose to transfer a credit balance in their policyholder credit account to another person on the transfer of the person’s life insurance business to—
(a) a PCA company; or
(b) another PCA person.
Requirements
(2) A PCA person may make an election under subsection (1) if—
(a) the transfer meets the requirements of section EY 45(1) (Policyholder income formula: when life insurance business transferred); and
(b) after the transfer, the person is no longer required to maintain a policyholder credit account.
Debit
(3) As a result of the election, the transferor has a debit described in table O16: person’s policyholder debits, row 4 (transfer of life insurance business) for the amount of the credit balance transferred under subsection (1).
Manner of election
(4) The person makes the election by recording as a debit the amount of the credit balance transferred in the person’s policyholder credit account.
Debit date
(5) The debit date is the day the life insurance business is transferred.
Defined in this Act: amount, business, life insurance, PCA company, PCA person, policyholder credit account, policyholder debit,
Compare: 2004 No 35 s ME 23(4)(c), (5)(c)
Table O13 policy holder credits
| Row | Policyholder credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | Transfer of credit balance from imputation credit account | debit date in imputation credit account for transfer | section OJ 3 |
| 3 | Transfer of credit balance from imputation account | Debit date in FDP account for transfer | section OJ 4 |
| 4 | Credit balance transferred from another policyholder account on acquisition of life insurance business | day of transfer of life insurance business | section OJ 5 |
| 5 | Credit for maximum deficit in FDP account arising during tax year | 31 March | section OJ 6 |
| 6 | Transfer of credit balance from FDP account for debit for reduced deficit that arises during tax year | 31 March | section OJ 7 |
Table O14 policyholder debits
| Row | Policyholder credit | Debit date | Further defined |
| 1 | Open debit balance | 1 April | section OA 7 |
| 2 | Credit balance applied to satisfy policyholder base income income tax or provisional tax liability | last day of income year | section OJ 8 |
| 3 | Credit balance transferred to imputation credit account of company or group | day of election | section OJ 9 |
| 4 | Transfer of credit to group account | credit date in group account for credit transferred | section OJ 10 |
| 5 | Credit balance transferred to another policyholder credit account on transfer of life insurance business | day of transfer of life insurance business | section OJ 11 |
Table O15 person's policyholder credits
| Row | Policyholder credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | Equivalent credit that would arise for ICA company from life insurance business | set out section OJ 14 | section OJ 14 |
| 3 | Credit balance transferred from another policyholder credit account on acquisition of life insurance business | day of transfer of life insurance business | section OJ 15 |
Table O16 person's policyholder debits
| Row | Policyholder credit | Debit date | Further defined |
| 1 | Open debit balance | 1 April | section OA 7 |
| 2 | Credit balance applied to satisfy policyholder base income tax or provisional tax liability for income year | day of election | section OJ 16 |
| 3 | Equivalent debt that would arise for imputation credit account company from life insurance business | debit date of equivalent debit | section OJ 17 |
| 4 | Credit balance transferred to another policyholder credit account on transfer of life insurance business | day of transfer of life insurance business | section OJ 18 |
Subpart OK—Maori authority credit accounts (MACA)
Introductory provision
OK 1 General rules for Maori authorities with Maori authority credit accounts
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Accounts
(1) A Maori authority must maintain a Maori authority credit account for a tax year. The account is a record of Maori authority credits and Maori authority debits that arise in the account during the tax year. Subsection (2) overrides this subsection.
Exclusion
(2) Subsection (1) does not apply for a period in which—
(a) the constitution or rules of the Maori authority prohibit a distribution of any kind to a member; or
(b) the Maori authority derives only exempt income, disregarding exempt income under section CW 10 (Dividend within New Zealand wholly-owned group).
Credits
(3) Credits include an amount of income tax paid during a tax year, an imputation credit attached to a dividend derived by the Maori authority and, if the Maori authority is not also a foreign dividend payment account (FDPA) company, a foreign dividend payment (FDP) credit attached to a dividend derived.
Debits
(4) Debits may include a refund of income tax and a Maori authority credit attached to a taxable Maori authority distribution paid by the Maori authority.
General rules
(5) The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to Maori authority credit accounts.
Defined in this Act: amount, dividend, exempt income, FDP credit, FDPA company, imputation credit, income tax, Maori authority, Maori authority credit, Maori authority credit account, Maori authority debit, member, memorandum account, pay, tax year, taxable Maori authority distribution,
Compare: 2004 No 35 ss MK 1, MK 3
Maori authority credits
OK 2 MACA payment of tax
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Credit
(1) A Maori authority has a Maori authority credit for a payment of income tax or provisional tax. Subsection (3) overrides this subsection.
Table reference
(2) The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 2 (payment of tax).
No credit
(3) No credit under subsection (1) arises for—
(a) income tax paid for a tax year before the 2004–05 tax year; or
(b) income tax paid for income derived when the Maori authority was not a Maori authority; or
(c) income tax paid by a credit under section LE 1 (Tax credits for imputation credits); or
(d) further income tax applied under section OK 23 to pay income tax or provisional tax.
Credit date
(4) The credit date is the day the tax is paid.
Defined in this Act: further income tax, income, income tax, Maori authority, Maori authority credit, pay, provisional tax, tax year,
Compare: 2004 No 35 s MK 4(1)(a), (2)(a)
OK 3 MACA payment of tax to other Maori authorities
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Credit
(1) A Maori authority has a Maori authority credit for a payment of tax to another Maori authority that is treated as a payment transferred from company A to company B under section RC 32 (Wholly-owned groups of companies).
Table reference
(2) The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 3 (payment of tax to another Maori authority).
Credit date
(3) The credit date is the day the tax is paid.
Defined in this Act: Maori authority, Maori authority credit, pay,
Compare: 2004 No 35 s MK 4(1)(b), (2)(a)
OK 4 MACA payment of further income tax
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Credit
(1) A Maori authority has a Maori authority credit for a payment of further income tax under section OK 21 or OK 22.
Table reference
(2) The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 4 (payment of further income tax).
Credit date
(3) The credit date is the day the further income tax is paid.
Defined in this Act: further income tax, Maori authority, Maori authority credit, pay,
Compare: 2004 No 35 s MK 4(1)(c), (2)(a)
OK 5 MACA distribution with Maori authority credit
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Credit
(1) A Maori authority has a Maori authority credit for the amount of a Maori authority credit attached to a distribution derived by the Maori authority.
Table reference
(2) The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 5 (distribution with Maori authority credit).
Credit date
(3) The credit date is the day the distribution is made.
Defined in this Act: amount, distribution, Maori authority, Maori authority credit,
Compare: 2004 No 35 s MK 4(1)(d), (2)(b)
OK 6 MACA dividend derived with imputation credit
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Credit
(1) A Maori authority has a Maori authority credit for the amount of an imputation credit attached to a dividend derived by the Maori authority.
Table reference
(2) The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 6 (dividend derived with imputation credit).
Credit date
(3) The credit date is the day the dividend is paid.
Defined in this Act: amount, dividend, imputation credit, Maori authority, Maori authority credit, pay,
Compare: 2004 No 35 s MK 4(1)(e), (2)(c)
OK 7 MACA dividend derived with FDP credit
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Credit
(1) A Maori authority has a Maori authority credit for the amount of an FDP credit attached to a dividend derived by the Maori authority when it is not an FDPA company.
Table reference
(2) The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 7 (dividend derived with FDP credit).
Credit date
(3) The credit date is the day the dividend is paid.
Defined in this Act: amount, dividend, FDP credit, FDPA company, Maori authority, Maori authority credit, pay,
Compare: 2004 No 35 s MK 4(1)(f), (2)(c)
OK 8 MACA resident withholding tax withheld
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Credit
(1) A Maori authority has a Maori authority credit for the amount of tax for resident passive income treated under section RA 9(1)(b) (Treatment of amounts withheld as received) as derived by the Maori authority.
Table reference
(2) The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 8 (RWT).
Credit date
(3) The credit date is the day the amount of tax is withheld.
Defined in this Act: amount of tax, Maori authority, Maori authority credit, resident passive income, RWT,
Compare: 2004 No 35 s MK 4(1)(h), (2)(e)
OK 9 MACA reversal of tax advantage arrangement
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When this section applies
(1) This section applies when it is established that a Maori authority credit in a Maori authority’s credit account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.
Credit
(2) The Maori authority has a Maori authority credit for an amount that equals the amount of a debit in the Maori authority credit account under section OK 17.
Table references
(3) The Maori authority credit in subsection (2) is referred to in table O17: Maori authority credits, row 9 (reversal of tax advantage arrangement). The Maori authority debit in subsection (2) is referred to in table O18: Maori authority debits, row 9 (tax advantage arrangement).
Credit date
(4) The credit date is the same as the debit date for the debit under section OK 17.
Defined in this Act: amount, Maori authority, Maori authority credit, Maori authority credit account, Maori authority debit, tax advantage,
Compare: 2004 No 35 s MK 4(1)(g), (2)(d)
Maori authority debits
OK 10 MACA distribution
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Debit
(1) A Maori authority has a Maori authority debit for the amount of a Maori authority credit attached to a distribution made by the Maori authority.
Table reference
(2) The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 2 (distribution).
Debit date
(3) The debit date is the day the distribution is made.
Defined in this Act: amount, distribution, Maori authority, Maori authority credit, Maori authority debit,
Compare: 2004 No 35 s MK 5(1)(a), (2)(a)
OK 11 MACA allocation of provisional tax
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Debit
(1) A Maori authority has a Maori authority debit for an amount of provisional tax treated under section RC 32 (Wholly-owned groups of companies) as allocated by the Maori authority to another Maori authority as an underpaid company.
Table reference
(2) The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 3 (allocation of provisional tax).
Debit date
(3) The debit date is the day the Commissioner is notified of the allocation.
Defined in this Act: amount, Commissioner, company, Maori authority, Maori authority debit, notify, provisional tax,
Compare: 2004 No 35 s MK 5(1)(b), (2)(b)
OK 12 MACA refund of income tax
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Debit
(1) A Maori authority has a Maori authority debit for the amount of a refund of income tax paid to the Maori authority. Subsections (2) and (4) override this subsection.
No debit
(2) The amount of a debit under subsection (1) does not include—
(a) a refund of income tax paid for a tax year before the 2004–05 tax year; or
(b) a refund of income tax paid to the Maori authority that is no more than the debit under section OK 15; or
(c) a refund of income tax paid for a period when the Maori authority credit account was not maintained.
Table references
(3) The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 4 (refund of income tax). The Maori authority debit in subsection (2)(b) is referred to in table O18: Maori authority debits, row 7 (debit for loss of shareholder continuity).
Part-year Maori authorities
(4) If a Maori authority maintains a Maori authority credit account for only part of a tax year, the amount of the debit is calculated using the formula—
Definition of items in formula
(5) In the formula,—
(a) account days is the number of days in the tax year for which the Maori authority maintains the Maori authority credit account:
(b) refund is the amount of the refund.
Debit date
(6) The debit date is the day the refund is made.
Defined in this Act: amount, income tax, Maori authority, Maori authority credit account, Maori authority debit, pay, tax year,
Compare: 2004 No 35 s MK 5(1)(c), (g), (2)(c)
OK 13 MACA payment of other taxes
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Debit
(1) A Maori authority has a Maori authority debit for an amount of overpaid income tax applied to pay an amount due under the Inland Revenue Acts. Subsection (2) overrides this subsection.
No debit
(2) The amount of a debit under subsection (1) does not include an amount of overpaid income tax—
(a) applied to satisfy a liability for income tax or provisional tax; or
(b) paid for a tax year before the 2004–05 tax year; or
(c) that relates to income tax paid before a Maori authority debit arises under section OK 15 when the amount is no more than the amount of the debit for loss of shareholder continuity.
Table references
(3) The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 5 (payment of other taxes). The Maori authority debit in subsection (2)(c) is referred to in table O18: Maori authority debits, row 7 (debit for loss of shareholder continuity).
Debit date
(4) The debit date is the day the amount is applied.
Defined in this Act: amount, income tax, income tax liability, income year, Inland Revenue Acts, Maori authority, Maori authority debit, pay, provisional tax, shareholder, tax year,
Compare: 2004 No 35 s MK 5(1)(j), (2)(i)
OK 14 MACA refund of FDP
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Debit
(1) A Maori authority has a Maori authority debit for the amount of a refund of FDP paid to the Maori authority when it is not an FDPA company.
Table reference
(2) The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 6 (refund of FDP).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, FDP, FDPA company, Maori authority, Maori authority debit, pay,
Compare: 2004 No 35 s MK 5(1)(e), (2)(c)
OK 15 MACA debit for loss of shareholder continuity
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Debit
(1) A Maori authority has a Maori authority debit for the amount of a Maori authority credit retained in the Maori authority credit account and unused before the date on which shareholder continuity is lost.
Table reference
(2) The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 7 (debit for loss of shareholder continuity).
Debit date
(3) The debit date is the day of loss of shareholder continuity.
Defined in this Act: amount, company, Maori authority, Maori authority credit, Maori authority credit account, Maori authority debit, shareholder,
Compare: 2004 No 35 s MK 5(1)(f), (2)(f)
OK 16 MACA breach of Maori authority credit ratio
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Debit
(1) A Maori authority has a Maori authority debit for a breach in a tax year of the Maori authority credit ratio under section OK 20(3) for an amount calculated using the formula—
(net distributions × Maori authority credit ratio) − credits attached.
Definition of items in formula
(2) In the formula,—
(a) net distributions is the total amount of all taxable Maori authority distributions made by the Maori authority during the tax year, excluding the amount of Maori authority credits attached to the distributions:
(b) Maori authority credit ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios) or, if less, the greatest Maori authority credit ratio of all taxable Maori authority distributions made by the Maori authority during the tax year:
(c) credits attached is the total amount of all Maori authority credits attached to distributions paid by the Maori authority during the tax year.
Ratio change declaration
(3) A debit under subsection (1) does not arise if the Maori authority provides a ratio change declaration under section OK 20(5).
Table reference
(4) The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 8 (breach of Maori authority credit ratio).
Debit date
(5) The debit date is the last day of the tax year.
Defined in this Act: amount, distribution, Maori authority, Maori authority credit, Maori authority credit account, Maori authority credit ratio, Maori authority debit, tax year, taxable Maori authority distribution,
Compare: 2004 No 35 ss MK 5(1)(d), (2)(d), MK 7(5)
OK 17 MACA tax advantage arrangement
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Debit
(1) A Maori authority has a Maori authority debit for the amount of a further debit for a tax advantage arrangement referred to in section GB 43(2) and (3) (Reconstruction of Maori authority credit arrangements to obtain tax advantage).
Table reference
(2) The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 9 (tax advantage arrangement).
Debit date
(3) The debit date is the last day of the tax year in which the tax advantage arrangement began.
Defined in this Act: amount, arrangement, Maori authority, Maori authority credit account, Maori authority debit, tax advantage, tax year,
Compare: 2004 No 35 s MK 5(1)(h), (2)(g)
OK 18 MACA final balance
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Debit
(1) A Maori authority has a Maori authority debit for a credit balance in the Maori authority credit account when the Maori authority stops being a Maori authority.
Table reference
(2) The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 10 (final balance).
Debit date
(3) The debit date is day the Maori authority stops being a Maori authority.
Defined in this Act: Maori authority, Maori authority credit account, Maori authority debit,
Compare: 2004 No 35 s MK 5(1)(i), (2)(h)
Maori authority credits attached to distributions
OK 19 Maori authority credits attached to distributions
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Attaching Maori authority credits
(1) When a Maori authority makes a taxable Maori authority distribution, it may attach a Maori authority credit to the distribution.
Maori authority credit ratio
(2) A distribution referred to in subsection (1) must have a Maori authority credit ratio calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) credit attached is the amount of Maori authority credit attached to the distribution:
(b) net distribution is the amount of distribution made, excluding the amount of Maori authority credit.
Maximum permitted ratio
(4) A Maori authority credit attached to a distribution must not be more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).
Co-operative companies
(5) A Maori authority that is also a co-operative company may attach a Maori authority credit to a notional distribution. The provisions of section OB 79 (Co-operative companies attaching imputation credits to notional distributions) apply to the notional distribution as if references in that section to—
(a) an imputation credit were a reference to a Maori authority credit; and
(b) an imputation credit account were a reference to a Maori authority credit account.
Retrospective attachment
(6) A Maori authority may retrospectively attach a Maori authority credit to a taxable Maori authority distribution.
Application of other provisions
(7) The provisions of section OB 62 (Retrospective attachment of imputation credits) apply to a distribution under this section as if a reference in that section to—
(a) an imputation credit were a reference to a Maori authority credit; and
(b) an imputation credit account were a reference to a Maori authority credit account.
Defined in this Act: amount, co-operative company, imputation credit, imputation credit account, Maori authority, Maori authority credit, Maori authority credit account, Maori authority credit ratio, maximum permitted ratio, taxable Maori authority distribution,
Compare: 2004 No 35 ss MK 6, MK 7(1)
OK 20 MACA benchmark distribution rules
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When this section applies
(1) This section applies when a Maori authority pays a taxable Maori authority distribution on more than 1 occasion during a tax year.
Benchmark distribution
(2) The first distribution of the tax year is the benchmark distribution.
Same Maori authority credit ratio
(3) The Maori authority credit ratio of a distribution made after the benchmark distribution must be the same as the Maori authority credit ratio of the benchmark distribution.
Debit for breach of Maori authority credit ratio
(4) A breach of subsection (3) gives rise to a Maori authority debit under section OK 16 (table O18: Maori authority debits, row 8 (breach of Maori authority credit ratio)) for an amount calculated using the formula in section OK 16(1).
Ratio change declaration
(5) A Maori authority may notify the Commissioner that the distribution is not part of an arrangement to obtain a tax advantage by providing a ratio change declaration stating that the distribution is not part of an arrangement to which sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage) apply. The Maori authority must provide the declaration before the distribution is made, or by a later date if the Commissioner allows. For the purposes of this subsection, the distribution must not be part of an arrangement to obtain a tax advantage. This subsection overrides subsection (4).
Defined in this Act: amount, arrangement, benchmark distribution, Commissioner, Maori authority, Maori authority credit ratio, Maori authority debit, notify, pay, tax advantage, tax year, taxable Maori authority distribution,
Compare: 2004 No 35 s MK 7(2)–(4)
Further income tax
OK 21 Further income tax for closing debit balance
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Liability
(1) A Maori authority is liable to pay further income tax for the amount of a debit balance in its Maori authority credit account at the end of a tax year.
Due date
(2) The Maori authority must pay the further income tax to the Commissioner no later than 20 June following the end of the tax year.
Application of other provisions
(3) When it is appropriate for the purposes of this section, the other sections of this Act and the Tax Administration Act 1994—
(a) apply to further income tax as if they addressed further income tax and not income tax; and
(b) apply, modified as necessary, to ensure their application to the further income tax rather than income tax; and
(c) do not override the imputation rules and section 101 of the Tax Administration Act 1994.
Defined in this Act: amount, Commissioner, further income tax, imputation rules, income tax, Maori authority, Maori authority credit account, pay, tax year,
Compare: 2004 No 35 s MK 8(1), (2), (6)
OK 22 Further income tax paid when Maori authority no longer Maori authority
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Liability
(1) A Maori authority is liable to pay further income tax for a debit balance in its Maori authority credit account immediately before the Maori authority stops being a Maori authority.
Due date
(2) The Maori authority must pay the further income tax to the Commissioner by the day on which the Maori authority stops being a Maori authority.
Paramount section
(3) A Maori authority that stops being a Maori authority on the last day of a tax year is liable for further income tax under this section and not under section OK 21.
Application of other provisions
(4) When it is appropriate for the purposes of this section, the other sections of this Act and the Tax Administration Act 1994—
(a) apply to further income tax as if they addressed further income tax and not income tax; and
(b) apply, modified as necessary, to ensure their application to the further income tax rather than income tax; and
(c) do not override the imputation rules and section 101 of the Tax Administration Act 1994.
Defined in this Act: Commissioner, further income tax, imputation rules, income tax, Maori authority, Maori authority credit account, pay, tax year,
Compare: 2004 No 35 s MK 8(3), (4), (6)
OK 23 Further income tax paid satisfying liability for income tax
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Election
(1) A Maori authority that is liable for income tax or provisional tax may choose to satisfy the liability through a payment of further income tax.
Requirements
(2) The liability referred to in subsection (1) must be for an income year corresponding to a tax year in which the Maori authority maintains a Maori authority credit account.
When treated as paid
(3) The income tax or provisional tax is treated as paid on the day the further income tax is paid to the Commissioner.
Defined in this Act: Commissioner, further income tax, income tax, income year, Maori authority, Maori authority credit account, pay, provisional tax, tax year,
Compare: 2004 No 35 s MK 8(5)
OK 24 Income tax paid satisfying liability for further income tax
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Election
(1) A Maori authority that is liable for further income tax may choose to satisfy the liability through a payment of income tax.
Requirements
(2) The liability referred to in subsection (1) must be for an income year corresponding to a tax year in which the Maori authority maintains a Maori authority credit account.
When treated as paid
(3) The further income tax is treated as paid on the day the income tax is paid to the Commissioner.
Defined in this Act: Commissioner, further income tax, income tax, income year, Maori authority, Maori authority credit account, pay, tax year,
Compare: 2004 No 35 s MK 8(5B)
Table O17 Maori authority credits
| Row | Maori authority credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | Provisional tax and income tax paid | day of payment | section OK 2 |
| 3 | Tax paid to another Maori authority | day of payment | section OK 3 |
| 4 | Further income tax paid | day of payment | section OK 4 |
| 5 | Maori authority credit attached to distribution derived | day on which distribution is paid | section OK 5 |
| 6 | Imputation credit attached to dividend derived | day on which dividend is paid | section OK 6 |
| 7 | FDP credit attached to dividend derived when not FDP company | day on which dividend is paid | section OK 7 |
| 8 | RWT withheld | day on which amount withheld | section OK 8 |
| 9 | Reversal of debit for tax advantage arrangement | debit date for debit | section OK 9 |
Table O18 Maori authority debits
| Row | Maori authority | Credit date | Further defined |
| 1 | Opening debit balance | 1 April | section OA 7 |
| 2 | Maori authority credit attached to distribution paid | day of distribution | section OK 10 |
| 3 | allocation of provisional tax | day of notice of allocation | section OK 11 |
| 4 | Refund of income tax | day of refund | section OK 12 |
| 5 | Overpaid income tax applied to satisfy another taxation liability | day of application | section OK 13 |
| 6 | Refund of FDP when not FDPA company | day of refund | section OK 14 |
| 7 | Debit for loss of shareholder continuity for Maori authority that is company | day of loss of continuity | section OK 15 |
| 8 | Debit for breach of Maori authority credit ratio | 31 March | section OK 16 |
| 9 | Debit for tax advantage arrangement | last day of tax year in which arrangement began | section OK 17 |
| 10 | Credit balance when Maori authority credit account stops | day of cessation | section OK 18 |
Subpart OP—Memorandum accounts of consolidated groups
Introductory provisions
OP 1 Memorandum accounts of consolidated groups
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Single company
(1) For the purposes of this Part, a consolidated group is treated as if it were a single company, and subpart FM (Consolidated groups of companies) applies to the consolidated group.
Consolidated group accounts
(2) A consolidated group may be—
(a) required to maintain a memorandum account for a tax year; or
(b) entitled to maintain a memorandum account for a tax year.
Separate accounts
(3) A consolidated group’s memorandum account is separate from the memorandum account of each company in the consolidated group.
General rules
(4) The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to a memorandum account of a consolidated group.
Tables
(5) The credits and debits that arise in a memorandum account are listed in tables set out at the end of this subpart. The tables—
(a) state the credits and the debits; and
(b) state the credit dates and debit dates when the credits and debits arise; and
(c) refer to the section that fully defines them, and provides the credit dates and debit dates for each credit and debit.
Defined in this Act: company, consolidated group, memorandum account, tax year,
Compare: 2004 No 35 ss ME 10, ME 25, MF 7(2), MG 13, MI 14
OP 2 When credits and debits arise only in group accounts
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Credits only in group account
(1) A credit may arise only in the memorandum account of a consolidated group and not in the memorandum account of a group company, unless another provision expressly states otherwise.
Debits only in group account
(2) A debit may arise only in the memorandum account of a consolidated group and not in the memorandum account of a group company, unless another provision expressly states otherwise.
Particular credits and debits
(3) The credit referred to in subsection (1) and the debit referred to in subsection (2) are listed in provisions in this subpart.
Company’s obligation overridden
(4) This section applies despite—
(a) the obligation that a group company may have under this Part to record a credit or debit; and
(b) the fact that the credit and debit referred to in this section may otherwise be eligible to give rise to a credit or debit in the group company’s account.
Defined in this Act: company, consolidated group, memorandum account,
Compare: 2004 No 35 ss ME 13, ME 27, MF 9, MG 16, MI 19
Consolidated groups and imputation credit accounts
Introductory provisions
OP 3 Changes in consolidated imputation groups
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New group company
(1) A consolidated group that is a consolidated imputation group continues to have the same imputation credit account if the group starts an imputation group with a company that is not part of another consolidated group.
Combining consolidated imputation groups
(2) The companies that are part of 2 or more consolidated imputation groups that choose to combine to form 1 imputation group must record in the imputation credit account of the new group—
(a) all credits and debits in the imputation credit accounts of the 2 groups immediately before the election takes effect; and
(b) all credits and debits that arise for a group company that is part of the new group on and after the election takes effect.
Imputation group becoming consolidated group
(3) An imputation group continues to use its imputation credit account if the companies that are part of the imputation group choose to convert their status to that of a consolidated group that is a consolidated imputation group.
Opening balances
(4) The opening balances for the imputation credit account of the consolidated imputation group referred to in subsection (3) are set out in section OA 7 (Opening balances of memorandum accounts).
Defined in this Act: company, consolidated group, consolidated imputation group, imputation credit account, imputation group,
Compare: 2004 No 35 s ME 10(1A), (1B), (1D)
OP 4 Resident imputation subgroups
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Subgroup of trans-Tasman imputation group
(1) The resident imputation subgroup of a trans-Tasman imputation group must record in its imputation credit account the credits and debits described in subsection (2).
Eligible credits and debits
(2) The credits and debits referred to in subsection (1) are those that arise in the imputation credit account of the subgroup’s trans-Tasman imputation group in relation to a company that—
(a) will be part of the subgroup if the credit or debit arises before the subgroup is formed; or
(b) is part of the subgroup if the credit or debit arises when or after the subgroup is formed.
Defined in this Act: company, imputation credit account, imputation group, resident imputation subgroup, trans-Tasman imputation group,
Compare: 2004 No 35 s ME 10(1C)
OP 5 When credits and debits arise only in consolidated imputation group accounts
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Credits only in group account
(1) A credit listed in subsection (2) arises only in the imputation credit account of a consolidated imputation group and not in the imputation credit account of a group company.
Particular credits
(2) The credit referred to in subsection (1) is a credit under the following sections and described in the following rows of table O19: imputation credits of consolidated imputation groups:
(a) section OP 7, row 2 (payment of tax):
(b) section OP 8, row 3 (deposit in tax pooling account):
(c) section OP 12, row 7 (dividend derived with imputation credit):
(d) section OP 13, row 8 (dividend derived with FDP credit):
(e) section OP 14, row 9 (payment of FDP).
Debits only in the group account
(3) A debit listed in subsection (4) arises only in the imputation credit account of a consolidated imputation group and not in the imputation credit account of a group company.
Particular debits
(4) The debit referred to in subsection (3) is a debit under the following sections and described in the following rows of table O20: imputation debits of consolidated imputation groups:
(a) section OP 28, row 2 (payment of dividend):
(b) section OP 30, row 4 (refund of income tax):
(c) section OP 32, row 6 (refund from tax pooling account):
(d) section OP 33, row 7 (transfer to tax pooling account):
(e) section OP 34, row 8 (refund of FDP):
(f) section OP 35, row 9 (refund of tax credit):
(g) section OP 37, row 11 (group company’s debit):
(h) section OP 39, row 13 (replacement payment under share-lending arrangement):
(i) section OP 40, row 14 (returning share transfer):
(j) section OP 41, row 15 (credit transfer):
(k) section OP 43, row 17 (breach of imputation ratio).
Defined in this Act: company, consolidated imputation group, imputation credit, imputation credit account, imputation debit,
Compare: 2004 No 35 s ME 12(1)
OP 6 Provisions applying to consolidated imputation groups
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Single company, tax liabilities
(1) The provisions listed in subsection (2) apply, modified as necessary, to a consolidated imputation group and to the imputation credit account of the group as if—
(a) the group were a single company; and
(b) a reference to a company’s liability for further income tax, late payment penalty, or imputation penalty tax were a reference to a joint and several liability owed by group companies when the tax or penalty becomes payable.
Other provisions
(2) The provisions are—
(a) sections OB 65 and OB 66 (which relate to further income tax); and
(b) sections 97, 101, 139B, 140B, 140D, and 180 of the Tax Administration Act 1994.
Consolidation provisions
(3) Sections FM 4 and FM 5 (which relate to the liabilities of group companies) override subsection (1)(b).
Defined in this Act: company, consolidated imputation group, further income tax, imputation credit account, imputation penalty tax, pay,
Compare: 2004 No 35 s ME 14(3)
Imputation credits of consolidated imputation groups
OP 7 Consolidated ICA payment of tax
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Credit
(1) A consolidated imputation group has an imputation credit for a payment of income tax. Subsection (3) overrides this subsection.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 2 (payment of tax).
No credit
(3) A consolidated imputation group does not have an imputation credit for an amount of—
(a) income tax paid as a trustee, unless paid on category A income; or
(b) a transfer from a tax pooling account to a tax account with the Commissioner; or
(c) income tax paid on income derived by a company that is not an imputation credit account (ICA) company; or
(d) income tax paid by a life insurer subject to section EY 48 (Non-resident life insurers with life insurance policies in New Zealand) to satisfy the tax year’s policyholder base income tax liability; or
(e) income tax paid under section LE 1 (Tax credits for imputation credits) by crediting an imputation credit; or
(f) income tax paid under section LF 1 (Tax credits for FDP credits) by crediting a foreign dividend payment (FDP) credit; or
(g) income tax paid by crediting an amount under subpart LP (Tax credits for supplementary dividends); or
(h) further income tax applied under section OB 65 or OB 66 (which relate to further income tax) to pay income tax or provisional tax; or
(i) income tax paid by crediting further income tax under section OB 69(3) (Further income tax paid satisfying liability for income tax).
Credit date
(4) The credit date is the day the tax is paid.
Defined in this Act: amount, category A income, Commissioner, company, consolidated imputation group, FDP credit, further income tax, ICA company, imputation credit, imputation credit account, income, income tax, life insurer, pay, policyholder base income tax liability, provisional tax, tax account with the Commissioner, tax pooling account, tax year, trustee,
Compare: 2004 No 35 s ME 11(1)(a), (2)(a)
OP 8 Consolidated ICA deposit in tax pooling account
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Credit
(1) A consolidated imputation group has an imputation credit for an amount provided by it and paid by an intermediary into a tax pooling account.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 3 (deposit in tax pooling account).
Credit date
(3) The credit date is the day the amount is deposited.
Defined in this Act: amount, consolidated imputation group, imputation credit, intermediary, pay, tax pooling account,
Compare: 2004 No 35 s ME 11(1)(aa), (2)(aa)
OP 9 Consolidated ICA transfer from tax pooling account
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Credit
(1) A consolidated imputation group has an imputation credit for an amount that represents an entitlement to funds held in a tax pooling account and transferred by an intermediary.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 4 (transfer from tax pooling account).
Credit date
(3) The credit date is—
(a) the effective date under section RP 19 (Transfers from tax pooling accounts) if the amount is transferred to the group’s tax account with the Commissioner; or
(b) the day the refund is made.
Defined in this Act: amount, Commissioner, consolidated imputation group, imputation credit, intermediary, tax account with the Commissioner, tax pooling account,
Compare: 2004 No 35 s ME 11(1)(ab), (2)(ab)
OP 10 Consolidated ICA allocation from company with overpaid provisional tax
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Credit
(1) A consolidated imputation group has an imputation credit for an amount allocated under section RC 32 (Wholly-owned groups of companies) by a company that has overpaid its provisional tax.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 5 (allocation from excess company).
Credit date
(3) The credit date is the day the Commissioner is notified of the allocation.
Defined in this Act: amount, Commissioner, company, consolidated imputation group, imputation credit, notify,
Compare: 2004 No 35 s ME 11(1)(b), (2)(b)
OP 11 Consolidated ICA payment of further income tax
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Credit
(1) A consolidated imputation group has an imputation credit for an amount of further income tax paid under section OB 65 or OB 66 (which relate to further income tax).
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 6 (payment of further income tax).
Credit date
(3) The credit date is the day the further income tax is paid.
Defined in this Act: amount, consolidated imputation group, further income tax, imputation credit, pay,
Compare: 2004 No 35 s ME 11(1)(c), (2)(a)
OP 12 Consolidated ICA dividend derived with imputation credit
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Credit
(1) A consolidated imputation group has an imputation credit for the amount of an imputation credit attached to a dividend derived by a group company.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 7 (dividend derived with imputation credit).
Credit date
(3) The credit date is the day the dividend is paid.
Defined in this Act: amount, company, consolidated imputation group, dividend, imputation credit, pay,
Compare: 2004 No 35 s ME 11(1)(d), (2)(c)
OP 13 Consolidated ICA dividend derived with FDP credit
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Credit
(1) A consolidated imputation group has an imputation credit for the amount of an FDP credit attached to a dividend derived by a group company that—
(a) is part of a consolidated group without an FDP account; or
(b) does not have an FDP account and is not part of a consolidated group.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 8 (dividend derived with FDP credit).
Credit date
(3) The credit date is the day the dividend is paid.
Defined in this Act: amount, company, consolidated group, consolidated imputation group, dividend, FDP account, FDP credit, imputation credit, pay,
Compare: 2004 No 35 s ME 11(1)(e), (2)(c)
OP 14 Consolidated ICA payment of FDP
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Credit
(1) A consolidated imputation group has an imputation credit for the amount of FDP that is paid by a group company that—
(a) is part of a consolidated group without an FDP account; or
(b) does not have an FDP account and is not part of a consolidated group.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 9 (payment of FDP).
No credit
(3) Despite subsection (1), no credit arises for FDP paid under section RG 3 (Obligation to pay FDP) by reducing a tax loss.
Credit date
(4) The credit date is the day the FDP is paid.
Defined in this Act: amount, company, consolidated group, consolidated imputation group, FDP, FDP account, imputation credit, imputation credit account, pay, tax loss,
Compare: 2004 No 35 s ME 11(1)(f), (2)(a)
OP 15 Consolidated ICA replacement payment to company under share-lending arrangement
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Credit
(1) A consolidated imputation group has an imputation credit for the amount of an imputation credit attached under section OB 64 (Replacement payments) or treated as attached under section RE 25 (When amount of tax treated as imputation credit) to a replacement payment paid under a share-lending arrangement to a company that is part of the consolidated imputation group at the date of payment.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 10 (replacement payment under share-lending arrangement).
Credit date
(3) The credit date is the day the replacement payment is paid.
Defined in this Act: amount, company, consolidated imputation group, imputation credit, pay, replacement payment, share-lending arrangement,
Compare: 2004 No 35 s ME 11(1)(eb), (ec), (2)(cb)
OP 16 Consolidated ICA credit transfer to company
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Credit
(1) A consolidated imputation group has an imputation credit for the amount of an imputation credit shown in a credit transfer notice given to a company that is part of the consolidated imputation group when the notice is given.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 11 (credit transfer).
Credit date
(3) The credit date is the day the notice is given.
Defined in this Act: amount, company, consolidated imputation group, credit transfer notice, imputation credit,
Compare: 2004 No 35 s ME 11(1)(ed), (2)(cc)
OP 17 Consolidated ICA resident withholding tax withheld
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Credit
(1) A consolidated imputation group has an imputation credit for resident withholding tax (RWT) that is treated under section RA 9(1)(b) (Treatment of amounts withheld as received) as derived by a group company.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 12 (RWT withheld).
Credit date
(3) The credit date is the day the interest or dividend relating to the resident passive income is paid.
Defined in this Act: company, consolidated imputation group, dividend, imputation credit, interest, pay, resident passive income, RWT,
Compare: 2004 No 35 s ME 11(1)(j), (2)(c)
OP 18 Consolidated ICA transfer from group company’s FDP account
-
Credit
(1) A consolidated imputation group has an imputation credit for an amount equal to the amount of an FDP debit under section OC 18 (FDPA transfer to imputation credit account) transferred from the FDP account of a group company.
Table references
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 13 (transfer from group company’s FDP account). The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 7 (transfer to imputation credit account).
Credit date
(3) The credit date is the same as the debit date for the transfer.
Defined in this Act: amount, company, consolidated imputation group, FDP account, FDP debit, imputation credit,
Compare: 2004 No 35 s ME 11(1)(fb), (2)(fb)
OP 19 Consolidated ICA transfer from group’s FDP account
-
Credit
(1) A consolidated imputation group has an imputation credit for an amount equal to the amount transferred under section FM 30(3) and (4) (Application of certain provisions to consolidated groups) from the FDP account of a consolidated group.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 14 (transfer from consolidated group’s FDP account).
Credit date
(3) The credit date is the same as the debit date for the transfer.
Defined in this Act: amount, consolidated group, consolidated imputation group, FDP account, imputation credit,
Compare: 2004 No 35 s ME 11(1)(g), (2)(d)
OP 20 Consolidated ICA transfer from group company’s policyholder credit account
-
Credit
(1) A consolidated imputation group has an imputation credit for an amount equal to the amount of a debit under section OJ 9 (PCA transfer to imputation credit account) for the transfer of a credit balance from a group company’s policyholder credit account.
Table references
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 15 (transfer from company’s policyholder credit account). The policyholder debit in subsection (1) is referred to in table O14: policyholder debits, row 3 (transfer to imputation credit account).
Credit date
(3) The credit date is the same as the debit date for the transfer.
Defined in this Act: amount, company, consolidated imputation group, imputation credit, policyholder credit account,
Compare: 2004 No 35 s ME 11(1)(jb), (2)(eb)
OP 21 Consolidated ICA transfer from group’s policyholder credit account
-
Credit
(1) A consolidated imputation group has an imputation credit for an amount equal to the amount of a debit under section OP 116 for a transfer from the policyholder credit account of a consolidated group.
Table references
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 16 (transfer from group’s policyholder credit account). The policyholder debit in subsection (1) is referred to in table O28: policyholder debits of consolidated groups, row 3 (transfer to imputation credit account).
Credit date
(3) The credit date is the same as the debit date for the transfer.
Defined in this Act: amount, consolidated group, consolidated imputation group, imputation credit, policyholder credit account,
Compare: 2004 No 35 s ME 11(1)(k), (2)(d)
OP 22 Consolidated ICA group company’s credit
-
Credit
(1) A consolidated imputation group has an imputation credit for the amount of a credit that arises when—
(a) an imputation credit described in a row of table O1: imputation credits, arises in the imputation credit account of a group company; and
(b) an imputation debit described in a row of table O20: imputation debits of consolidated imputation groups, arises in the imputation credit account of the group; and
(c) the debit is not offset by a credit arising in the group account before or on the same date on which the credit arose in the group company’s account.
Table reference
(2) The imputation credit in subsection (1) is referred to table O19: imputation credits of consolidated imputation groups, row 17 (group company’s credit).
Offsetting debits
(3) For the purposes of subsection (1)(c), to determine whether a debit has been offset by a credit in the group account,—
(a) credits are treated as reducing debits in the order in which the credits arise; and
(b) a credit, whether some or all, is counted only once in determining whether a debit has been offset; and
-
(c) credits in the accounts of more than 1 group company become a credit to the group account—
(i) in the order of their credit date; and
(ii) as chosen by the group, if credits arise on the same credit date; and
(iii) on a pro rata basis, if no election is made under subparagraph (ii).
Credit date
(4) The credit date is the same as the debit date for the debit to the group account.
Defined in this Act: amount, company, consolidated imputation group, imputation credit, imputation credit account, imputation debit,
Compare: 2004 No 35 s ME 13(2), (3)
OP 23 Consolidated ICA elimination of double debit
-
When this section applies
(1) This section applies when an imputation debit in a consolidated imputation group’s imputation credit account under section OP 42 has the effect of cancelling an imputation credit under section OP 8.
Credit
(2) The consolidated imputation group has an imputation credit for an amount that equals the amount of the debit referred to in subsection (1), and either—
(a) another debit arises under section OP 32 for a refund or transfer of the deposit on a debit date that is after the debit date for the debit for loss of shareholder continuity; or
(b) the deposit is taken into account under sections RP 19 and RP 20 (which relate to transfers from tax pooling accounts) in determining the balance of the company’s tax account with the Commissioner after the debit date for the debit for loss of shareholder continuity.
Table references
(3) The table references are as follows:
(a) the imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity):
(b) the imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 3 (deposit in tax pooling account):
(c) the imputation credit in subsection (2) is referred to in table O19: imputation credits of consolidated imputation groups, row 18 (elimination of double debit):
(d) the imputation debit in subsection (2)(a) is referred to in table O20: imputation debits of consolidated imputation groups, row 6 (refund from tax pooling account).
Credit date
(4) The credit date is the day—
(a) the deposit is refunded; or
(b) a credit arises in the company’s tax account with the Commissioner.
Defined in this Act: amount, Commissioner, company, consolidated imputation group, deposit, imputation credit, imputation credit account, imputation debit, shareholder, tax account with the Commissioner,
Compare: 2004 No 35 s ME 11(1A), (2A)
OP 24 Consolidated ICA reversal of tax advantage arrangement
-
When this section applies
(1) This section applies when it is established that an imputation credit in a consolidated imputation group’s imputation credit account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.
Credit
(2) The consolidated imputation group has an imputation credit for an amount equal to the amount of a debit in the group’s account under section OP 46.
Table references
(3) The imputation credit in subsection (2) is referred to in table O19: imputation credits of consolidated imputation groups, row 19 (reversal of tax advantage arrangement). The imputation debit in subsection (2) is referred to in table O20: imputation debits of consolidated imputation groups, row 20 (tax advantage arrangement).
Credit date
(4) The credit date is the same as the debit date for the debit.
Defined in this Act: amount, consolidated imputation group, imputation credit, imputation debit, tax advantage,
Compare: 2004 No 35 s ME 11(1)(i), (2)(e)
OP 25 Consolidated ICA non-resident withholding tax withheld
-
Credit
(1) A consolidated imputation group that includes an Australian ICA company has an imputation credit for an amount of non-resident passive income derived by the company from which non-resident withholding tax (NRWT) is withheld.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 20 (NRWT paid).
Credit date
(3) The credit date is the day the amount of tax is withheld.
Defined in this Act: amount, Australian ICA company, consolidated imputation group, imputation credit, non-resident passive income, NRWT, pay,
Compare: 2004 No 35 s ME 11(1B)(a), (2B)(a)
OP 26 Consolidated ICA payment of amount of tax for schedular payment
-
Credit
(1) A consolidated imputation group that includes an Australian ICA company has an imputation credit for the amount of tax for a schedular payment paid to the company as a non-resident contractor.
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 21 (amount of tax for schedular payment).
Credit date
(3) The credit date is the day the amount of tax is withheld.
Defined in this Act: amount of tax, Australian ICA company, consolidated imputation group, imputation credit, non-resident contractor, schedular payment,
Compare: 2004 No 35 s ME 11(1B)(b), (2B)(b)
OP 27 Consolidated ICA payment of schedular income tax
-
Credit
(1) A consolidated imputation group that includes an Australian ICA company has an imputation credit for the amount of a payment by the company of schedular income tax for income derived under section CR 3, CV 16, or CV 17 (which relate to non-resident insurers, shippers, and film renters).
Table reference
(2) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 22 (payment of schedular income tax).
Credit date
(3) The credit date is the day the schedular income tax is paid.
Defined in this Act: amount, Australian ICA company, consolidated imputation group, imputation credit, imputation credit account, income, pay, schedular income tax,
Compare: 2004 No 35 s ME 11(1B)(c), (2B)(c)
Imputation debits of consolidated imputation groups
OP 28 Consolidated ICA payment of dividend
-
Debit
(1) A consolidated imputation group has an imputation debit for an amount that equals the amount of an imputation credit attached to a dividend paid by a group company.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 2 (payment of dividend).
Debit date
(3) The debit date is the day the dividend is paid.
Arrangement for dividend from another country
(4) Section GB 38 (When sections GB 35 to GB 37 apply to consolidated groups) may apply to treat an amount as a debit under this section.
Defined in this Act: amount, company, consolidated imputation group, dividend, imputation credit, imputation debit, pay,
Compare: 2004 No 35 s ME 12(1)(a), (2)(a)
OP 29 Consolidated ICA allocation of provisional tax
-
Debit
(1) A consolidated imputation group has an imputation debit for an amount of provisional tax allocated by the group under section RC 32 (Wholly-owned groups of companies) to an underpaid company.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 3 (allocation of provisional tax).
Debit date
(3) The debit date is the day the Commissioner is notified of the allocation.
Defined in this Act: amount, Commissioner, company, consolidated imputation group, imputation debit, notify, provisional tax,
Compare: 2004 No 35 s ME 12(1)(c), (2)(c)
OP 30 Consolidated ICA refund of income tax
-
Debit
(1) A consolidated imputation group has an imputation debit for the amount of a refund of income tax or provisional tax paid to the group. Subsection (2) overrides this subsection.
No debit
(2) The debit does not include a refund of income tax paid before a debit arises under section OP 42 to the extent to which the amount of the refund is less than the amount of the debit.
Table references
(3) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 4 (refund of income tax). The imputation debit in subsection (2) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity).
Debit date
(4) The debit date is the day the refund is made.
Defined in this Act: amount, consolidated imputation group, imputation debit, income tax, pay, provisional tax,
Compare: 2004 No 35 s ME 12(1)(d), (2)(d)
OP 31 Consolidated ICA amount applied to pay other taxes
-
Debit
(1) A consolidated imputation group has an imputation debit for an amount of overpaid income tax that is applied to pay an amount due under the Inland Revenue Acts. Subsection (2) overrides this subsection.
No debit
(2) The debit referred to in subsection (1) does not include overpaid income tax to the extent to which it is—
(a) applied to satisfy an income tax liability; or
(b) for an amount paid before an imputation debit arises under section OP 42, no more than the debit for loss of shareholder continuity.
Table references
(3) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 5 (amount applied to pay other taxes). The imputation debit in subsection (2) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity).
Debit date
(4) The debit date is the day the amount is applied.
Defined in this Act: amount, company, consolidated imputation group, imputation debit, income tax, income tax liability, Inland Revenue Acts, pay, shareholder,
Compare: 2004 No 35 s ME 12(1)(l), (2)(k)
OP 32 Consolidated ICA refund from tax pooling account
-
When this section applies
(1) This section applies in a tax year when a consolidated imputation group pays an intermediary an amount that gives rise to an imputation credit under sections OP 8 and OP 9, and the amount is later refunded by the intermediary from the tax pooling account.
Debit
(2) The consolidated imputation group has an imputation debit for the tax year for the amount of the refund.
Table references
(3) The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 3 (deposit in tax pooling account) or row 4 (transfer from tax pooling account). The imputation debit in subsection (2) is referred to in table O20: imputation debits of consolidated imputation groups, row 6 (refund from tax pooling account).
Debit date
(4) The debit date for the debit is—
(a) the last day of the previous tax year to the extent of the amount of the debit that is no more than the credit balance in the imputation credit account on that date:
(b) the day the refund is made to the extent of the remaining amount of the debit that is no more than the credit balance in the imputation credit account on the day of refund:
(c) the last day of the previous tax year for the remainder of the imputation debit.
Defined in this Act: amount, consolidated imputation group, deposit, imputation credit, imputation credit account, imputation debit, intermediary, pay, tax pooling account, tax year,
Compare: 2004 No 35 s ME 12(1)(da), (2)(da)
OP 33 Consolidated ICA transfer to tax pooling account
-
When this section applies
(1) This section applies in a tax year when a consolidated imputation group transfers to another person an entitlement to funds in a tax pooling account that gives rise to an imputation credit under the following sections as described in the following rows of table O19: imputation credits of consolidated imputation groups:
(a) section OP 8, row 3 (deposit in tax pooling account):
(b) section OP 9, row 4 (transfer from tax pooling account).
Debit
(2) The consolidated imputation group has an imputation debit for the amount of the transfer.
Table reference
(3) The imputation debit in subsection (2) is referred to in table O20: imputation debits of consolidated imputation groups, row 7 (transfer to tax pooling account).
Debit date
(4) The debit date for the debit is—
(a) the last day of the previous tax year to the extent of the amount of the debit that is no more than the credit balance in the imputation credit account on that date:
(b) the day the refund is made to the extent of the remaining amount of the debit that is no more than the credit balance in the imputation credit account on the day of refund:
(c) the last day of the previous tax year for the remainder of the imputation debit.
Defined in this Act: amount, consolidated imputation group, imputation credit, imputation credit account, imputation debit, tax pooling account, tax year,
Compare: 2004 No 35 s ME 12(1)(db), (2)(da)
OP 34 Consolidated ICA refund of FDP
-
Debit
(1) A consolidated imputation group has an imputation debit for the amount of a refund of FDP that relates to a dividend derived by a group company at a time when—
(a) the group company is part of a consolidated group without an FDP account; or
(b) the group company does not have an FDP account and is not part of a consolidated group.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 8 (refund of FDP).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, company, consolidated group, consolidated imputation group, dividend, FDP, FDP account, imputation debit,
Compare: 2004 No 35 s ME 12(1)(f), (2)(d)
OP 35 Consolidated ICA refund of tax credit
-
Debit
(1) A consolidated imputation group has an imputation debit for the amount of a refund under section LA 6(2)(e) (Remaining refundable credits: PAYE, RWT, and certain other items) that relates to a dividend derived by a group company at a time when—
(a) the group company is part of a consolidated group without an FDP account; or
(b) the group company does not have an FDP account and is not part of a consolidated group.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 9 (refund of tax credit).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, company, consolidated group, consolidated imputation group, dividend, FDP account, imputation debit,
Compare: 2004 No 35 s ME 12(1)(f), (2)(d)
OP 36 Consolidated ICA overpayment of FDP
-
Debit
(1) A consolidated imputation group has an imputation debit for the amount of an overpayment of FDP relating to a dividend derived by a group company in the following circumstances:
-
(a) the dividend is derived by the company at a time when—
(i) the company is part of a consolidated group without an FDP account; or
(ii) the company does not have an FDP account and is not part of a consolidated group; and
(b) the overpayment is applied to pay an amount due under the Inland Revenue Acts other than a liability for income tax or FDP; and
(c) the group does not have an FDP account when the amount is applied.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 10 (overpayment of FDP).
Debit date
(3) The debit date is the day the amount is applied.
Defined in this Act: amount, company, consolidated group, consolidated imputation group, dividend, FDP, FDP account, imputation debit, income tax, Inland Revenue Acts, pay,
Compare: 2004 No 35 s ME 12(1)(m), (2)(k)
-
OP 37 Consolidated ICA group company’s debit
-
Debit
(1) A consolidated imputation group has an imputation debit for an amount to the extent to which the amount would, in the absence of subsection (3), give rise to—
(a) an imputation debit described in a row of table O2: imputation debits, in the imputation credit account of a group company; and
(b) an imputation debit that would create or increase a debit balance in the group company’s imputation credit account.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 11 (group company’s debit).
No debit for group company
(3) The amount referred to in subsection (1) does not give rise to an imputation debit in the group company’s account although otherwise eligible to be one.
Debit date
(4) The debit date is the day that the amount would have been debited to the imputation credit account of the group company in the absence of subsection (3).
Defined in this Act: amount, company, consolidated imputation group, imputation credit account, imputation debit,
Compare: 2004 No 35 s ME 12(1)(k), (2)(j)
OP 38 Consolidated ICA transfer for net foreign attributed income
-
Transfer of amount
(1) A consolidated imputation group has an imputation debit as set out in subsection (2) for an amount relating to net foreign attributed income transferred from the group’s imputation credit account to the FDP account of—
(a) a group company that is not also part of a consolidated group; or
(b) a consolidated group with the same membership as the consolidated imputation group.
Debit and credit
(2) The amount transferred is—
(a) an imputation debit in the group’s imputation credit account; and
(b) an FDP credit under section OP 62 in the FDP account of the group company or consolidated group, as appropriate.
Table references
(3) The imputation debit in subsection (2)(a) is referred to in table O20: imputation debits of consolidated imputation groups, row 12 (transfer for net foreign attributed income). The FDP credit in subsection (2)(b) is referred to in table O21: FDP credits of consolidated FDP groups, row 8 (transfer for net foreign attributed income).
Two methods
(4) The amount transferred must be calculated for an income year under method 1 or method 2 as set out in this section.
When methods apply
(5) The consolidated imputation group must apply—
(a) method 1 set out in subsection (6) if the group or a company that is not the group company referred to in subsection (1)(a) maintains an FDP account and a conduit tax relief (CTR) account for all of the tax year; or
(b) method 2 set out in subsection (7) if the group or a company that is not the group company referred to in subsection (1)(a) maintains only an FDP account for all of the tax year.
Method 1
(6) Under method 1, the consolidated imputation group or the company must apply sections LQ 1 to LQ 4 (which relate to credits for conduit tax relief) as if—
(a) the amount transferred were conduit tax relief for the tax year corresponding to the income year; and
(b) the percentage of resident shareholders were substituted for the item percentage of shareholders in section LQ 1(2) and LQ 2(2); and
(c) the percentage of resident shareholders were calculated by subtracting the item percentage of shareholders from 100%.
Method 2
(7) Under method 2, the consolidated imputation group or company must make the calculation under section LQ 2(2) as if the group or company were a CTR company and the item percentage of shareholders were 100%.
No transfer
(8) Despite subsection (4), if neither method can be applied, no transfer arises under this section.
Debit date
(9) The debit date for the debit is—
(a) the last day of the tax year corresponding to the income year referred to in subsection (4) for so much of the amount transferred that is no more than the amount of provisional tax paid before that date for the income year; or
(b) the day on which the company files the return of income for the tax year corresponding to the income year referred to in subsection (4) for the balance of the transfer.
Defined in this Act: amount, company, CTR account, CTR company, consolidated group, consolidated imputation group, FDP account, FDP credit, foreign attributed income, imputation credit account, imputation debit, income year, provisional tax, resident, return of income, shareholder, tax year,
Compare: 2004 No 35 s ME 12(1)(n), (2)(l), (3), (4)
OP 39 Consolidated ICA replacement payment by company under share-lending arrangement
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Debit
(1) A consolidated imputation group has an imputation debit for the amount of an imputation credit attached under section OB 64 (Replacement payments) to a replacement payment paid under a share-lending arrangement by a company that is part of the consolidated imputation group at the time of payment.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 13 (replacement payment under share-lending arrangement).
Debit date
(3) The debit date is the day the replacement payment is paid.
Defined in this Act: amount, company, consolidated imputation group, imputation credit, imputation debit, pay, replacement payment, share-lending arrangement,
Compare: 2004 No 35 s ME 12(1)(ab), (2)(ab)
OP 40 Consolidated ICA returning share transfer
-
Debit
(1) A consolidated imputation group has an imputation debit for the amount of an imputation credit attached to a dividend paid to a company if—
(a) at the time of payment, the company is part of the consolidated imputation group; and
(b) the dividend is paid to the company as a share user, or a person associated with a share user, in a returning share transfer that is not a share-lending arrangement.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 14 (returning share transfer).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: amount, associated person, company, consolidated imputation group, dividend, imputation credit, imputation debit, pay, returning share transfer, share-lending arrangement, share user,
Compare: 2004 No 35 s ME 12(1)(ac), (2)(ac)
OP 41 Consolidated ICA credit transfer by company
-
Debit
(1) A consolidated imputation group has an imputation debit for the amount of an imputation credit attached to a dividend paid to a company if—
(a) at the time of payment, the company is a part of the consolidated imputation group; and
(b) the amount is shown in a credit transfer notice given by the company.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 15 (credit transfer).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: amount, company, consolidated imputation group, credit transfer notice, dividend, imputation credit, imputation debit, pay,
Compare: 2004 No 35 s ME 12(1)(ad), (2)(ac)
OP 42 Consolidated ICA debit for loss of shareholder continuity
-
Debit
(1) A consolidated imputation group has an imputation debit for the amount of an imputation credit retained in the group’s imputation credit account and unused before the date on which shareholder continuity is lost.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity).
Debit date
(3) The debit date is the day of loss of shareholder continuity.
Defined in this Act: amount, consolidated imputation group, imputation credit, imputation credit account, imputation debit, shareholder,
Compare: 2004 No 35 ss ME 12(1)(h), (2)(g), ME 13(2)
OP 43 Consolidated ICA breach of imputation ratio
-
Debit
(1) A consolidated imputation group has an imputation debit for a tax year for the amount of a debit under section OB 43 (ICA breach of imputation ratio) that would arise in the imputation credit account of a group company in the absence of section OP 5(3).
Table references
(2) The group’s imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 17 (breach of imputation ratio). The group company’s imputation debit in subsection (1) is referred to in table O2: imputation debits, row 16 (breach of imputation ratio).
Debit date
(3) The debit date is the last day of the tax year.
Defined in this Act: amount, company, consolidated imputation group, imputation credit account, imputation debit, tax year,
Compare: 2004 No 35 s ME 12(1)(e), (2)(e)
OP 44 Consolidated ICA transfer to policyholder credit account
-
Election
(1) The nominated company of a consolidated imputation group may choose to transfer some or all of a credit balance in the group’s imputation credit account to the policyholder credit account of a group company. Subsection (2) overrides this subsection.
Restriction
(2) Subsection (1) does not apply to a consolidation imputation group that is also a resident imputation subgroup.
Method and result of election
(3) The company makes the election by recording the credit balance transferred as—
(a) a debit in the group’s imputation credit account; and
(b) a credit in the group’s policyholder credit account under section OP 110.
Table references
(4) The imputation debit in subsection (3)(a) is referred to in table O20: imputation debits of consolidated imputation groups, row 18 (transfer to policyholder credit account). The policyholder credit in subsection (3)(b) is referred to in table O27: policyholder credits of consolidated groups, row 2 (transfer from imputation credit account).
Debit date
(5) The debit date is the day the election is made.
Defined in this Act: company, consolidated imputation group, imputation credit account, imputation debit, nominated company, policyholder credit account, resident imputation subgroup,
Compare: 2004 No 35 ss ME 12(1)(b), (2)(b), ME 14(1)
OP 45 Consolidated ICA redemption debit
-
Debit
(1) A consolidated imputation group has an imputation debit for the amount of a redemption debit.
When redemption debit arises
(2) A redemption debit arises when—
-
(a) a group company that is not an Australian ICA company is—
(i) the manager of a unit trust; or
(ii) the trustee or manager of a group investment fund; and
-
(b) the group company derives a dividend from the redemption or cancellation of—
(i) a unit issued by the unit trust; or
(ii) an interest of an investor in the group investment fund; and
(c) the company has acquired the unit or interest in the ordinary course of its management activities for the unit trust or group investment fund; and
(d) the unit or interest had been acquired by the company on the same terms as those offered to the investors in the unit trust or group investment fund.
Calculating amount
(3) The debit is for the greater of the amounts described in subsections (4) and (6) calculated for the income year referred to in subsection (8) in which the group company derives the dividend referred to in subsection (2)(b).
First amount
(4) The first amount is calculated using the formula—
credits attached − imputation debits.
Definition of items in formula
(5) In the formula in subsection (4),—
(a) credits attached is the total amount of all imputation credits and FDP credits attached to dividends derived by the group company in the income year in the circumstances set out in subsection (2):
(b) imputation debits is the amount of imputation debits in the income year under section OP 42 in the group’s imputation credit account.
Second amount
(6) The second amount is calculated using the formula—
Definition of items in formula
(7) In the formula in subsection (6),—
(a) total dividends is the total amount of all dividends derived in the circumstances set out in subsection (2), including imputation credits and FDP credits attached to the dividends:
(b) taxable income is the taxable income of the group company for the tax year corresponding to the income year in which the dividends are derived:
(c) tax liability is the group company’s income tax liability for the tax year corresponding to the income year in which the dividends are derived:
(d) continuity debits is the amount of imputation credits attached to the dividends that have been cancelled by an imputation debit under section OP 42.
Table references
(8) The table references are as follows:
(a) the imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 19 (redemption debit):
(b) the imputation debit in subsection (5)(b) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity):
(c) the imputation debit in subsection (7)(d) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity).
Debit date
(9) The debit date is the day the company or the group’s nominated company files the return of income for the tax year corresponding to the income year in which the dividend is derived.
Defined in this Act: amount, Australian ICA company, company, consolidated imputation group, dividend, FDP credit, group investment fund, imputation credit, imputation credit account, imputation debit, income tax liability, income year, investor, nominated company, return of income, tax year, taxable income, trustee, unit trust,
Compare: 2004 No 35 s ME 41
-
OP 46 Consolidated ICA tax advantage arrangement
-
Debit
(1) A consolidated imputation group has an imputation debit for the amount of a debit for a tax advantage arrangement determined under sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage).
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 20 (tax advantage arrangement).
Debit date
(3) The debit date is the last day of the tax year in which the arrangement began.
Defined in this Act: amount, arrangement, consolidated imputation group, imputation debit, tax advantage, tax year,
Compare: 2004 No 35 s ME 12(1)(i), (2)(h)
OP 47 Consolidated ICA final balance
-
Debit
(1) A consolidated imputation group has an imputation debit for a credit balance in the imputation credit account when the group stops being a consolidated imputation group.
Table reference
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 21 (final balance).
Debit date
(3) The debit date is the day before the group stops being a consolidated imputation group.
Defined in this Act: consolidated imputation group, imputation credit account, imputation debit,
Compare: 2004 No 35 s ME 12(1)(j), (2)(h)
OP 48 Consolidated ICA refund of NRWT
-
Debit
(1) A consolidated imputation group that includes an Australian ICA company has an imputation debit for the amount of a refund of NRWT that gave rise to an imputation credit under section OP 25.
Table references
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 22 (refund of NRWT). The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 20 (NRWT withheld).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, Australian ICA company, consolidated imputation group, imputation credit, imputation debit, NRWT,
Compare: 2004 No 35 s ME 12(1A)(a), (2A)
OP 49 Consolidated ICA refund of amount of tax for schedular payment
-
Debit
(1) A consolidated imputation group that includes an Australian ICA company has an imputation debit for the amount of a refund of an amount of tax for a schedular payment that gave rise to an imputation credit under section OP 26.
Table references
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 23 (refund of amount of tax for schedular payment). The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 21 (amount of tax for schedular payment).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, amount of tax, Australian ICA company, consolidated imputation group, imputation credit, imputation debit, schedular payment,
Compare: 2004 No 35 s ME 12(1A)(b), (2A)
OP 50 Consolidated ICA refund of schedular income tax
-
Debit
(1) A consolidated imputation group that includes an Australian ICA company has an imputation debit for the amount of a refund of a payment of schedular income tax that gave rise to an imputation credit under section OP 27.
Table references
(2) The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 24 (refund of schedular income tax). The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 22 (payment of schedular income tax).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: amount, Australian ICA company, consolidated imputation group, imputation credit, imputation debit, income tax, pay, schedular income tax,
Compare: 2004 No 35 s ME 12(1A)(c), (2A)
Table O19 imputation credits of consolidated imputation groups
| Row | Imputation credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April or when group starts | section OA 7 |
| 2 | Income tax paid for group tax liability | day of payment | section OP 7 |
| 3 | Group funds paid into tax pooling account | day of payment | section OP 8 |
| 4 | Transfer from tax pooling account | day of credit refund | section OP 9 |
| 5 | Allocation from excess company | day of notice of allocation | section OP 10 |
| 6 | Further income tax paid | day of payment | section OP 11 |
| 7 | Imputation credit attached to dividend derived | day on which dividend is paid | section OP 12 |
| 8 | FDP credit attached to dividend derived | day on which dividend is paid | section OP 13 |
| 9 | FDP paid by group company | day of payment | section OP 14 |
| 10 | Replacement payment paid under share-lending arrangement | day of payment | section OP 15 |
| 11 | Imputation credit attached to dividend and shown in credit transfer notice | day on which notice is given | section OP 16 |
| 12 | RWT withheld | day on which interest is paid | section OP 17 |
| 13 | Transfer from group company's FDP account | debit day for transfer | section OP 18 |
| 14 | Transfer from consolidated group's FDP account | debit date for transfer | section OP 19 |
| 15 | Transfer from company's policyholder acccount | debit date for transfer | section OP 20 |
| 16 | Transfer from consolidated group's policyholder credit account | debit date for transfer | section OP 21 |
| 17 | Group company's credit | set out in section O 22 | section OP 22 |
| 18 | Debit for loss of shareholder continuity that cancels credit for tax pooling account deposit that is refunded | day of refund | section OP 23 |
| 19 | Reversal of debt for tax advantage arrangement | debit day of debit | section OP 24 |
| 20 | NRWT on non-resident withholding income derived by group company that is Australian ICA company | day on which amount is withheld | section OP 25 |
| 21 | Amount of tax for schedular payment to group company that is also Australian ICA company | day on which amount is withheld | section OP 26 |
| 22 | Schedular income tax paid by group company that is Australian ICA company | day of payment | section OP 27 |
Table O20 imputation debits of consolidated imputation groups
| Row | Imputation debit | Debit date | Further defined |
| 1 | Opening debit balance | 1 April or when group starts | section OA 7 |
| 2 | Imputation credit attached to dividend paid by group company | day of payment | section OP 28 |
| 3 | Provisional tax allocated by group to underpaid company | day of notice of allocation | section OP 29 |
| 4 | Refund of income tax or provisional tax to group | day of refund | section OP 30 |
| 5 | Income tax overpaid that is applied to satisfy amount of tax, other than income tax, due by group company | day of application | section OP 31 |
| 6 | Refund from tax pooling account | set out in section OP 32 | section OP 32 |
| 7 | Transfer to another taxpayer of funds in tax pooling account | set out in section OP 33 | section OP 33 |
| 8 | Refund of FDP when no FDP account | day of refund | section OP 34 |
| 9 | Refund of tax credit | day of refund | section OP 35 |
| 10 | Overpaid FDP applied, when group does not have FDP account, to satisfy amount due that is not income tax or FDP | day of application | section OP 36 |
| 11 | Debit that would increase debit balance for group company | set out in section 37 | section OP 37 |
| 12 | Transfer to FDP account on account of net foreign attributed income for income year | set out in section 38 | section OP 38 |
| 13 | Credit attached to replacement payment under share-lending arrangement | day of payment | section OP 39 |
| 14 | Credit attached to dividend shown in returning share transfer | day of payment | section OP 40 |
| 15 | Credit attached to dividend and shown in credit transfer notice | day of payment | section OP 41 |
| 16 | Debit for loss of shareholder continuity | day of loss of continuity | section OP 42 |
| 17 | Debit for breach of imputation ratio | 31 March | section OP 43 |
| 18 | Transfer to policyholder credit account of group or group compan | day of election | section OP 44 |
| 19 | Redemption debit for unit trust or group investment fund foer income year | day on which return of income for income year is filed | section OP 45 |
| 20 | Debit for tax arrangement | last day of tax year in which arrangement began | section OP 46 |
| 21 | Credit balance of group's imputation credit account when group stops being consolidated imputation group | day of cessation | section OP 47 |
| 22 | Refund of NRWT to group company that is Australian ICA company | day of refund | section OP 48 |
| 23 | Refund of amount of tax for schedular payment to group company that is Australian ICA company | day of refund | section OP 49 |
| 24 | Refund of schedular income tax to group company that is Australian ICA company | day of refund | section OP 50 |
Consolidated groups and FDP accounts
Introductory provisions
OP 51 FDP accounts of consolidated FDP groups
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Consolidated group account
(1) A consolidated group is a consolidated FDP group for a tax year if—
(a) a group company is a foreign dividend payment account (FDPA) company at a time during the tax year; or
(b) the group chooses to maintain an FDP account.
Effect of election
(2) If a consolidated FDP group makes an election under subsection (1)(b), it must maintain the FDP account referred to in section OC 2 (FDP accounts) from the date of election.
Notifying Commissioner
(3) The nominated company of a consolidated FDP group must notify the Commissioner of an election under subsection (1)(b)—
(a) no later than 21 days after the day of election; or
(b) by a later date if the Commissioner allows.
Defined in this Act: Commissioner, company, consolidated FDP group, consolidated group, FDP account, FDPA company, nominated company, notify, tax year,
Compare: 2004 No 35 s MG 13(1)
OP 52 Choosing to stop being consolidated FDP group
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Election
(1) The nominated company of a consolidated FDP group may choose that the group’s status as a consolidated FDP group is to end.
When election made
(2) The election referred to in subsection (1) may be made during a tax year that is later than the tax year in which the group chooses under section OP 51 to become a consolidated FDP group.
When company’s status ends
(3) The election referred to in subsection (1) takes effect from the first day of the tax year after the tax year in which the election referred to in subsection (2) is made, but only if,—
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(a) the group—
(i) files an annual FDPA return for the year of election in the time allowed by section 71 of the Tax Administration Act 1994; and
(ii) pays further FDP, if any, under section OC 30 (Payment of further FDP for closing debit balance) for the year of election; and
(b) no group company is an FDPA company in the tax year after the year of election.
Defined in this Act: annual FDPA return, company, consolidated FDP group, FDPA company, further FDP, nominated company, pay, tax year,
Compare: 2004 No 35 s MG 2(4), (5)
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OP 53 When group company emigrates
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When this section applies
(1) This section applies when an FDPA company in a consolidated FDP group is an emigrating company.
Status ends
(2) The group’s status as a consolidated FDP group ends at the time of emigration of the company.
Further payments and returns
(3) The consolidated FDP group must—
(a) provide the annual FDPA return required for the group for the tax year in which the company becomes non-resident; and
(b) for a debit balance in the consolidated FDP group’s account at the time of emigration, pay further FDP payable for the tax year of an amount equal to the debit balance.
Defined in this Act: amount, annual FDPA return, consolidated FDP group, emigrating company, FDPA company, further FDP, non-resident, pay, tax year, time of emigration,
Compare: 2004 No 35 s MG 13(6), (7)
OP 54 When credits and debits arise only in consolidated FDP group accounts
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Credits to group accounts
(1) A credit listed in subsection (2) arises only in the FDP account of a consolidated FDP group and not in the FDP account of a group company.
Particular credits
(2) The credit referred to in subsection (1) is a credit under the following sections and described in the following rows of table O21: FDP credits of consolidated FDP groups:
(a) section OP 56, row 2 (payment of FDP):
(b) section OP 58, row 4 (dividend derived with FDP credit).
Debits only in group accounts
(3) A debit listed in subsection (4) arises only in the FDP account of a consolidated FDP group and not in the FDP account of a group company.
Particular debits
(4) The debit referred to in subsection (3) is a debit under the following sections and described in the following rows of table O22: FDP debits of consolidated FDP groups:
(a) section OP 64, row 2 (payment of dividend):
(b) section OP 66, row 4 (refund of FDP):
(c) section OP 68, row 6 (refund of tax credit):
(d) section OP 72, row 10 (breach of FDP ratio).
Defined in this Act: company, consolidated FDP group, FDP account,
Compare: 2004 No 35 s MG 16(1)
OP 55 Provisions applying to consolidated FDP groups
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Single company, tax liabilities
(1) The provisions set out in subsection (2) apply, modified as necessary, to a consolidated FDP group and to the FDP account of the group as if—
(a) the group were a single company; and
(b) a reference to a section of this Act were to an equivalent provision applicable to a consolidated group; and
(c) a reference to a company’s liability for further FDP, late payment penalty, or FDP penalty tax were a reference to a joint and several liability owed by group companies when the tax or penalty becomes payable.
Other provisions
(2) The provisions are—
(a) sections OC 30 and OC 31 (which relate to further FDP); and
(b) sections 103, 104, 139B, 140C, 140D, and 181 of the Tax Administration Act 1994.
Consolidation provisions
(3) Sections FM 3 and FM 4 (which relate to the liabilities of consolidated groups and group companies) overrides subsection (1)(c).
Defined in this Act: company, consolidated FDP group, consolidated group, FDP account, FDP penalty tax, further FDP, pay,
Compare: 2004 No 35 s MG 16A(2)
FDP credits of consolidated FDP groups
OP 56 Consolidated FDPA payment of FDP
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Credit
(1) A consolidated FDP group has an FDP credit for a payment of FDP by a group company. Subsection (3) overrides this subsection.
Table reference
(2) The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 2 (payment of FDP).
No credit
(3) A consolidated FDP group does not have an FDP credit for an amount of FDP paid—
(a) by crediting an amount of further FDP under sections OC 34 (Further FDP paid satisfying liability for FDP) and OP 55; or
(b) by reducing a tax loss under section FM 26 (Using tax losses to pay FDP).
Credit date
(4) The credit date is the day the FDP is paid.
Defined in this Act: amount, company, consolidated FDP group, FDP, FDP credit, further FDP, pay, tax loss,
Compare: 2004 No 35 s MG 14(1)(a), (2)(a)
OP 57 Consolidated FDPA payment of further FDP
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Credit
(1) A consolidated FDP group has an FDP credit for a payment of further FDP under section OC 30 or OC 31 (which relate to further FDP).
Table reference
(2) The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 3 (payment of further FDP).
Credit date
(3) The credit date is the day the further FDP is paid.
Defined in this Act: consolidated FDP group, FDP credit, further FDP, pay,
Compare: 2004 No 35 s MG 14(1)(c), (2)(a)
OP 58 Consolidated FDPA dividend derived with FDP credit
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Credit
(1) A consolidated FDP group has an FDP credit for the amount of an FDP credit attached to a dividend derived by a group company.
Table reference
(2) The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 4 (dividend derived with FDP credit).
Credit date
(3) The credit date is the day the dividend is paid.
Defined in this Act: amount, company, consolidated FDP group, dividend, FDP credit, pay,
Compare: 2004 No 35 s MG 14(1)(b), (2)(a)
OP 59 Consolidated FDPA group company’s credit
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Credit
(1) A consolidated FDP group has an FDP credit for the amount of a credit arising as follows:
(a) an FDP credit described in a row of table O3: FDP credits, arises in the FDP account of a group company; and
(b) an FDP debit described in a row of table O22: FDP debits of consolidated FDP groups, arises in the group FDP account; and
(c) the debit is not offset by a credit arising in the group account before or on the same date on which the credit arose in the group company’s account.
Table reference
(2) The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 5 (group company’s credits).
Offsetting debits
(3) For the purposes of subsection (1)(c), to determine whether the debit has been offset by a credit in the group account,—
(a) credits are treated as reducing debits in the order in which the credits arise; and
(b) a credit, whether some or all, is counted only once in determining whether a debit has been offset; and
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(c) credits in the accounts of more than 1 group company become a credit to the group account—
(i) in the order of their credit date; and
(ii) as chosen by the group, if credits arise on the same credit date; and
(iii) on a pro rata basis, if no election is made under subparagraph (ii).
Credit date
(4) The credit date is immediately before the debit date for the debit to the group account.
Defined in this Act: amount, company, consolidated FDP group, FDP account, FDP credit, FDP debit,
Compare: 2004 No 35 ss MG 14(1)(e), (2)(c), MG 16(2), (4)
OP 60 Consolidated FDPA credit transfer to company
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Credit
(1) A consolidated FDP group has an FDP credit for the amount of an FDP credit shown in a credit transfer notice given to a company that is part of the consolidated FDP group when the notice is given.
Table reference
(2) The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated imputation groups, row 6 (credit transfer).
Credit date
(3) The credit date is the day the notice is given.
Defined in this Act: amount, company, consolidated FDP group, credit transfer notice, FDP credit,
Compare: 2004 No 35 s MG 14(1)(bb), (2)(ab)
OP 61 Consolidated FDPA transfer from group’s CTR account
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Credit
(1) A consolidated FDP group has an FDP credit for a tax year for an amount equal to the amount of a CTR debit under section OP 88 for the transfer of a closing credit balance to the FDP account.
Table references
(2) The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 7 (transfers from group’s CTR account). The CTR debit in subsection (1) is referred to in table O24: CTR debits of consolidated groups, row 3 (transfer to group’s FDP account).
Credit date
(3) The credit date is the last day of the tax year.
Defined in this Act: amount, CTR debit, consolidated FDP group, FDP account, FDP credit, tax year,
Compare: 2004 No 35 s MI 20(2)
OP 62 Consolidated FDPA transfer for net foreign attributed income
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Credit
(1) A consolidated FDP group has an FDP credit for an amount equal to the amount of an imputation debit under section OP 38 for a transfer to the FDP account on account of net foreign attributed income.
Table references
(2) The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 8 (transfer for net foreign attributed income). The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 12 (transfer for net foreign attributed income).
Credit date
(3) The credit date is the same as the debit date in the imputation credit account.
Defined in this Act: amount, consolidated FDP group, consolidated imputation group, FDP account, FDP credit, foreign attributed income, imputation credit account, imputation debit,
Compare: 2004 No 35 s MG 14(1)(f), (2)(d)
OP 63 Consolidated FDPA reversal of tax advantage arrangement
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When this section applies
(1) This section applies when it is established that an FDP credit in a consolidated FDP group’s FDP account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.
Credit
(2) The consolidated FDP group has an FDP credit for an amount equal to a debit in the group’s FDP account under section OP 76.
Table references
(3) The FDP credit in subsection (2) is referred to in table O21: FDP credits of consolidated FDP groups, row 9 (reversal of tax advantage arrangement). The FDP debit in subsection (2) is referred to in table O22: FDP debits of consolidated FDP groups, row 14 (tax advantage arrangement).
Credit date
(4) The credit date is the same as the debit date of the debit.
Defined in this Act: amount, consolidated FDP group, FDP account, FDP credit, tax advantage,
Compare: 2004 No 35 s MG 14(1)(d), (2)(b)
FDP debits of consolidated FDP groups
OP 64 Consolidated FDPA payment of dividend
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Debit
(1) A consolidated FDP group has an FDP debit for the amount of an FDP credit attached to a dividend paid by a group company that is part of the group when the dividend is paid.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 2 (payment of dividend).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: amount, company, consolidated FDP group, dividend, FDP account, FDP credit, FDP debit, pay,
Compare: 2004 No 35 s MG 15(1)(a), (2)(a)
OP 65 Consolidated FDPA credit transfer by company
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Debit
(1) A consolidated FDP group has an FDP debit for the amount of an FDP credit attached to a dividend paid to a company if—
(a) at the time of payment, the company is a part of the consolidated FDP group; and
(b) the amount is shown in a credit transfer notice given by the company.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 3 (credit transfer notice).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: amount, consolidated FDP group, credit transfer notice, dividend, FDP credit, FDP debit, pay,
Compare: 2004 No 35 s MG 15(1)(ab), (2)(ab)
OP 66 Consolidated FDPA refund of FDP
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Debit
(1) A consolidated FDP group has an FDP debit for a refund of FDP paid to a group company that is part of the group when it derived the dividend giving rise to the payment of FDP and the refund. Subsection (2) overrides this subsection.
No debit
(2) A debit under subsection (1) does not arise if—
(a) the payment of FDP giving rise to the refund was made before an FDP debit arises under section OP 73; and
(b) the debit for the refund is no more than the debit for loss of shareholder continuity.
Table references
(3) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 4 (refund of FDP). The FDP debit in subsection (2)(a) is referred to in table O22: FDP debits of consolidated FDP groups, row 11 (debit for loss of shareholder continuity).
Debit date
(4) The debit date is the day the refund is made.
Defined in this Act: company, consolidated FDP group, dividend, FDP, FDP debit, pay, shareholder,
Compare: 2004 No 35 s MG 15(1)(d), (2)(d)
OP 67 Consolidated FDPA overpayment of FDP
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Debit
(1) A consolidated FDP group has an FDP debit for an overpayment of FDP that is—
(a) paid by a group company that is part of the group at the time it derived the dividend giving rise to the overpayment of FDP; and
(b) applied to pay an amount due under the Inland Revenue Acts.
No debit
(2) Despite subsection (1), the debit does not include an overpayment of FDP to the extent to which it is—
(a) applied to satisfy a liability for FDP; or
(b) for a payment of FDP before an FDP debit arises under section OP 73, no more than the debit for loss of shareholder continuity.
Table references
(3) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 5 (overpayment of FDP). The FDP debit in subsection (2)(b) is referred to in table O22: FDP debits of consolidated FDP groups, row 11 (debit for loss of shareholder continuity).
Debit date
(4) The debit date is the day the amount is applied.
Defined in this Act: amount, company, consolidated FDP group, dividend, FDP, FDP debit, Inland Revenue Acts, pay, shareholder,
Compare: 2004 No 35 s MG 15(1)(1), (2)(j)
OP 68 Consolidated FDPA refund of tax credit
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Debit
(1) A consolidated FDP group has an FDP debit for a refund of a tax credit under section LA 6 (Remaining refundable credits: PAYE, RWT, and certain other items) relating to a dividend derived by a group company that is part of the group at the time it derived the dividend.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 6 (refund of tax credit).
Debit date
(3) The debit date is the day the refund is made.
Defined in this Act: company, consolidated FDP group, tax credit, dividend, FDP debit,
Compare: 2004 No 35 s MG 15(1)(e), (2)(d)
OP 69 Consolidated FDPA transfer to imputation credit account
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Debit
(1) A consolidated FDP group has an FDP debit for a tax year for an amount equal to a closing credit balance transferred under section FM 29 (Treatment of credit balance in consolidated group’s FDP account) to the group’s imputation credit account.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 7 (transfer to imputation credit account).
Debit date
(3) The debit date is the last day of the tax year.
Defined in this Act: amount, consolidated FDP group, FDP debit, imputation credit account, tax year,
Compare: 2004 No 35 s MG 15(1)(c), (2)(c)
OP 70 Consolidated FDPA transfer to group’s CTR account
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Debit
(1) A consolidated FDP group has an FDP debit for a tax year for an amount equal to a CTR credit under section OP 85 for the transfer of a credit balance to the group’s CTR account.
Table references
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 8 (transfer to group’s CTR account). The CTR credit in subsection (1) is referred to in table O23: CTR credits of consolidated groups, row 6 (transfer from group’s FDP account).
Debit date
(3) The debit date is the last day of the tax year.
Defined in this Act: amount, CTR account, CTR credit, consolidated FDP group, FDP debit, tax year,
Compare: 2004 No 35 s MI 20(1)
OP 71 Consolidated FDPA group company’s debit
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Debit
(1) A consolidated FDP group has an FDP debit for an amount to the extent to which it would, in the absence of subsection (2), give rise to—
(a) an FDP debit described in a row of table O4: FDP debits, in the FDP account of a group company; and
(b) an FDP debit that would create or increase a debit balance in the group company’s FDP account.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 9 (group company’s debit).
No debit for group company
(3) The amount referred to in subsection (1) does not give rise to an FDP debit in the group company’s account although otherwise eligible to be one.
Debit date
(4) The debit date is the day that would be the debit date for the amount in the absence of subsection (3).
Defined in this Act: amount, company, consolidated FDP group, FDP account, FDP debit,
Compare: 2004 No 35 ss MG 15(1)(k), (2)(i), MG 16(5)
OP 72 Consolidated FDPA breach of FDP ratio
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Debit
(1) A consolidated FDP group has an FDP debit for a tax year for the amount of a debit that would arise under section OC 22 (FDPA breach of FDP ratio) in the FDP account of a group company in the absence of section OP 54(3).
Table references
(2) The group’s FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 10 (breach of FDP ratio). The group company’s FDP debit in subsection (1) is referred to in table O4: FDP debits, row 11 (breach of FDP ratio).
Debit date
(3) The debit date is the last day of the tax year.
Defined in this Act: amount, company, consolidated FDP group, FDP account, FDP debit, tax year,
Compare: 2004 No 35 s MG 15(1)(f), (2)(e)
OP 73 Consolidated FDPA debit for loss of shareholder continuity
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Debit
(1) A consolidated FDP group has an FDP debit for the amount of an FDP credit retained in the group’s FDP account and unused before the date on which shareholder continuity is lost.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 11 (debit for loss of shareholder continuity).
Debit date
(3) The debit date is the day of loss of shareholder continuity.
Defined in this Act: amount, consolidated FDP group, FDP account, FDP credit, FDP debit, shareholder,
Compare: 2004 No 35 s MG 15(1)(i), (2)(g)
OP 74 Consolidated FDPA transfer to policyholder credit account
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Debit
(1) A consolidated FDP group has an FDP debit for the amount equal to a credit balance transferred under section FM 30(3) and (4) (Application of certain provisions to consolidated groups) to the group’s policyholder credit account.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 12 (transfer to policyholder credit account).
Debit date
(3) The debit date is the day of election under section FM 30(2).
Defined in this Act: amount, consolidated FDP group, FDP account, FDP debit, policyholder credit account,
Compare: 2004 No 35 s MG 15(1)(b), (2)(b)
OP 75 Consolidated FDPA breach of FDP ratio by PCA company
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Debit
(1) A consolidated FDP group has an FDP debit for a tax year for the amount of a debit that would arise under section OC 23 (FDPA breach of FDP ratio by PCA company) in the FDP account of a group company in the absence of section OP 54(4)(d).
Table references
(2) The group’s FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 13 (breach of FDP ratio by PCA company). The group company’s FDP debit in subsection (1) is referred to in table O4: FDP debits, row 12 (breach of FDP ratio by PCA company).
Debit date
(3) The debit date is the last day of the tax year.
Defined in this Act: amount, company, consolidated FDP group, FDP account, FDP debit, tax year,
Compare: 2004 No 35 s MG 15(1)(g), (2)(e)
OP 76 Consolidated FDPA tax advantage arrangement
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Debit
(1) A consolidated FDP group has an FDP debit for the amount of a debit for a tax advantage arrangement determined under sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage).
Table reference
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 14 (tax advantage arrangement).
Debit date
(3) The debit date is the last day of the tax year in which the arrangement began.
Defined in this Act: amount, arrangement, consolidated FDP group, FDP account, FDP debit, tax advantage, tax year,
Compare: 2004 No 35 s MG 15(1)(h), (2)(f)
OP 77 Consolidated FDPA final balance
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Debit
(1) A consolidated FDP group has an FDP debit for a credit balance in the FDP account when the group stops being a consolidated FDP group.
Table reference
(2) The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 15 (final balance).
Debit date
(3) The debit date is the day the group stops being a consolidated FDP group.
Defined in this Act: consolidated FDP group, FDP account, FDP debit,
Compare: 2004 No 35 s MG 15(1)(j), (2)(h)
Table O21 : credits of consolidated FDP groups
| Row | FDP credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | FDP paid by group company | day of payment | section OP 56 |
| 3 | Further FDP paid | day of payment | section OP 57 |
| 4 | FDP credit attached to dividend derived | day on which dividend is paid | section OP 58 |
| 5 | Credit of group company | set out in section OP 59 | section OP 59 |
| 6 | FDP credit attached to dividend and shown in credit transfer notice | day on which notice is given | section OP 60 |
| 7 | Transfer of closing credit balance from group's conduit tax relief account | 31 March | section OP 61 |
| 8 | Transfer from group'simputation credit account for foreign attributed income | debit date in imputation credit account | section OP 62 |
| 9 | Reversal of debit for tax advantage arrangement | debit date for debit | section OP 63 |
Table O22 : FDP debits of consolidated FDP groups
| Row | FDP debit | Debit date | Further defined |
| 1 | opening debit balance | 1 April | section OA 7 |
| 2 | FDP credit attached to dividend paid by group company | day on which dividend is paid | section OP 64 |
| 3 | FDP credit attached to dividend and show to credit transfer notice | day on which dividend is paid | section OP 65 |
| 4 | Refund of FDP | day of refund | section OP 66 |
| 5 | Overpaid FDP applied to satisfy amount other than FDP due under Inland Revenue Acts | day of application | section OP 67 |
| 6 | Refund of tax credit | day of refund | section OP 68 |
| 7 | Transfer of year-end credit balance to imputation credit account | 31 March | section OP 69 |
| 8 | Transfer of year-end credit balance to group's conduit tax relief account | 31 March | section OP 70 |
| 9 | Debit that would increase debit balance for group company | set out in section OP 71 | section OP 71 |
| 10 | Debit for breach of FDP ratio | 31 March | section OP 72 |
| 11 | Debit for loss of shareholder continuity | day of loss of continuity | section OP 73 |
| 12 | Transfer of credit balance to group's policyholder credit account | day of election | section OP 74 |
| 13 | Branch of FDP ratio by group company that is PCA company | 31 March | section OP 75 |
| 14 | Debit for tax advantage arrangement | last day of tax year in which arrangement begun | section OP 76 |
| 15 | Credit balance when group stops being consolidated FDP group | days on which group stops being consolidated FDP group | section OP 77 |
Consolidated groups and CTR credits
Introductory provisions
OP 78 CTR accounts of consolidated groups
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Consolidated group accounts
(1) A consolidated group has a group CTR account for a tax year if a group company is a CTR company at a time during the tax year.
Group company’s status
(2) Every company that is part of a consolidated group with a CTR account is a CTR company, despite the absence of an election under section OD 1(1) (General rules for companies with CTR accounts) by a group company.
Defined in this Act: company, CTR account, CTR company, consolidated group, tax year,
Compare: 2004 No 35 ss MI 14, MI 16
OP 79 When credits and debits arise only in CTR group accounts
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Credits only in the group accounts
(1) A credit listed in subsection (2) arises only in the CTR account of a consolidated group and not in the CTR account of a group company.
Particular credits
(2) The credit referred to in subsection (1) is a credit under the following sections and described in the following rows of table O5: CTR credits
(a) section OD 5 (CTRA tax credit for conduit tax relief), row 2 (tax credit for conduit tax relief):
(b) section OD 7 (CTRA dividend derived with CTR credit), row 4 (dividend derived with CTR credit):
(c) section OD 8 (CTRA reduction of FDP), row 5 (reduction of FDP).
Debits only in the group accounts
(3) A debit listed in subsection (4) arises only in the CTR account of a consolidated group and not in the CTR account of a group company.
Particular debits
(4) The debit referred to in subsection (3) is a debit under the following sections and described in the following rows of table O6: CTR debits
(a) section OD 10 (CTRA payment of dividend), row 2 (payment of dividend):
(b) section OD 13 (CTRA adjustment for conduit tax relief), row 5 (adjustment for conduit tax relief):
(c) section OD 17 (CTRA breach of CTR ratio), row 9 (breach of CTR ratio).
Defined in this Act: company, CTR account, CTR credit, CTR debit, CTR ratio, consolidated group,
Compare: 2004 No 35 s MI 19(1), (2)
OP 80 Provisions applying to consolidated groups with CTR accounts
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Single company, tax liabilities
(1) The provisions set out in subsection (2) apply, modified as necessary, to a consolidated group and to the CTR account of the group as if—
(a) the group were a single company; and
(b) a reference to a section of this Act were to an equivalent provision applicable to a consolidated group; and
(c) a reference to a company’s liability for further FDP, late payment penalty, or FDP penalty tax were a reference to a joint and several liability owed by group companies when the tax or penalty becomes payable.
Other provisions
(2) The provisions are—
(a) sections OD 22 and OD 23 (which relate to credits attached to dividends and FDP payable); and
(b) sections 103, 104, 139B, 140C, 140D, and 181 of the Tax Administration Act 1994.
Consolidation provisions
(3) Sections FM 4 and FM 5 (which relate to the liability of consolidated groups) override subsection (1)(c).
Defined in this Act: company, CTR account, consolidated group, FDP penalty tax, further FDP,
Compare: 2004 No 35 s MI 22(1)
CTR credits of consolidated groups
OP 81 Consolidated CTRA tax credit for conduit tax relief
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Credit
(1) A consolidated group has a CTR credit for a tax year for the amount of a tax credit allowed to the group under sections LQ 1 and LQ 2 (which relate to conduit tax relief) for an income year corresponding to the tax year. The amount of the credit is calculated under subsection (2).
Calculating amount of credit
(2) Having determined the amount of its tax credit for a tax year, a consolidated group must apportion the amount to calculate the amount of the credit using the formula—
Definition of items in formula
(3) In the formula,—
(a) FDP last day credit is the part of the amount of the FDP credit arising in the group’s FDP account on the last day of the tax year under section OP 38(2) for which the date is set out in subsection (9)(a) of that section:
(b) total FDP credit is the total amount transferred from the imputation credit account to the FDP account under section OP 62:
(c) amount of tax credit is the amount of the tax credit allowed under sections LQ 1 and LQ 2.
Amount included in component of formula
(4) The formula in subsection (2) takes into account an FDP credit under section OP 55 in the group’s FDP account.
Table references
(5) The table references are as follows
(a) the CTR credit in subsection (1) is referred to in table O23: CTR credits of consolidated groups, row 2 (tax credit for conduit tax relief):
(b) the FDP credit in subsection (3)(b) is referred to in table O21: FDP credits of consolidated FDP groups, row 8 (transfer for net foreign attributed income):
(c) the FDP credit in subsection (4) is referred to in table O21: FDP credits of consolidated FDP groups, row 8 (transfer for net foreign attributed income).
Credit date
(6) The credit date is—
(a) the last day of the tax year corresponding with the income year for which the tax credit is allowed for the amount of the credit calculated under subsection (2); and
(b) the day the company files its return of income for the tax year for the balance of the credit.
Defined in this Act: amount, CTR credit, consolidated group, tax credit, FDP account, FDP credit, imputation credit account, income tax, income year, return of income, tax year,
Compare: 2004 No 35 s MI 17(1)(a), (2)(a)
OP 82 Consolidated CTRA reduction of FDP
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Credit
(1) A consolidated group has a CTR credit for the amount of a reduction of FDP that is allowed to a group company under section RG 7 (Reduction of payments for conduit tax relief) for a dividend derived when the company is part of the group at the time the reduction occurred.
Table reference
(2) The CTR credit in subsection (1) is referred to in table O23: CTR credits of consolidated groups, row 3 (reduction of FDP).
Credit date
(3) The credit date is the due date for payment of FDP under section RG 7.
Defined in this Act: amount, company, CTR credit, consolidated group, dividend, FDP,
Compare: 2004 No 35 s MI 17(1)(b), (2)(b)
OP 83 Consolidated CTRA dividend derived with CTR credit
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Credit
(1) A consolidated group has a CTR credit for the amount of a CTR credit attached to a dividend derived by a group company that is part of the group when the dividend is derived.
Table reference
(2) The CTR credit in subsection (1) is referred to in table O23: CTR credits of consolidated groups, row 4 (dividend derived with CTR credit).
Credit date
(3) The credit date is the day the dividend is paid.
Defined in this Act: amount, company, CTR credit, consolidated group, dividend, pay,
Compare: 2004 No 35 s MI 17(1)(c), (2)(c)
OP 84 Consolidated CTRA group company’s credit
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Credit
(1) A consolidated group has a CTR credit for the amount of a credit that arises when—
(a) a CTR credit described in a row of table O5: CTR credits, arises in the CTR account of a group company; and
(b) a CTR debit described in a row of table O24: CTR debits of consolidated groups, arises in the CTR account of the group; and
(c) the debit is not offset by a credit arising in the group account before the credit arose in the group company’s account; and
(d) the amount of the credit is no more than the amount of the debit.
Table reference
(2) The CTR credit in subsection (1) is referred to in table O23: CTR credits of consolidated groups, row 5 (group company’s credit).
Offsetting debits
(3) For the purposes of subsection (1)(c), to determine whether a debit has been offset by a credit in the group account,—
(a) a credit retains its separate character and is not treated as part of a credit under section OA 7 (Opening balances of memorandum accounts); and
(b) credits are treated as reducing debits in the order in which the credits arise; and
(c) a credit, whether some or all, is counted only once in determining whether the debit has been offset; and
-
(d) credits in the accounts of more than 1 group company become a credit to the group account—
(i) in the order of their credit date; and
(ii) as chosen by the group, if the credits arise on the same credit date; and
(iii) on a pro rata basis, if no election is made under subparagraph (ii).
Credit date
(4) The credit date is the day the credit is recorded as transferred to the group account.
Defined in this Act: amount, company, CTR account, CTR credit, CTR debit, consolidated group,
Compare: 2004 No 35 ss MI 17(1)(e), (2)(e), MI 19(3), (4)
OP 85 Consolidated CTRA transfer from group’s FDP account
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Credit
(1) A consolidated group has a CTR credit for a tax year for an amount of a credit balance in the group’s FDP account that is treated as transferred to the group’s CTR account when—
(a) a credit balance exists in the group’s FDP account immediately before the end of the tax year; and
(b) a debit balance exists in the group’s CTR account immediately before the end of the tax year.
Finding balances
(2) For the purposes of subsection (1),—
-
(a) the debit balance in the CTR account is determined after a CTR credit arises at the end of the tax year under the following sections and described in the following rows of table O23: CTR credits of consolidated groups—
(i) section OP 81, row 2 (tax credit for conduit tax relief); and
(ii) section OP 84, row 5 (group company’s credit); and
(b) the credit balance in the FDP account is determined after an FDP credit arises under section OP 62 before the end of the tax year.
Amount of credit and debit
(3) The amount of the credit is equal to the smaller of the 2 balances referred to in subsection (1), and becomes—
(a) the CTR credit; and
(b) the FDP debit under section OP 70.
Table references
(4) The table references are as follows
(a) the CTR credit in subsection (1) is referred to in table O23: CTR credits of consolidated groups, row 6 (transfer from group’s FDP account):
(b) the FDP credit in subsection (2)(b) is referred to in table O21: FDP credits of consolidated FDP groups, row 8 (transfer for net foreign attributed income):
(c) the CTR credit in subsection (3)(a) is referred to in table O23: CTR credits of consolidated groups, row 6 (transfer from group’s FDP account):
(d) the FDP debit in subsection (3)(b) is referred to in table O22: FDP debits of consolidated groups, row 8 (transfer to groups CTR account).
Credit date
(5) The credit date is the last day of the tax year.
Defined in this Act: amount, company, CTR account, CTR credit, consolidated group, FDP account, FDP credit, FDP debit, tax year,
Compare: 2004 No 35 ss MI 17(1)(f), (2)(f), MI 20(1)
OP 86 Consolidated CTRA reversal of tax advantage arrangement
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When this section applies
(1) This section applies when it is established that a CTR credit in a consolidated group’s CTR account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.
Credit
(2) The consolidated group has a CTR credit for an amount equal to a debit in the group’s CTR account under section OP 93.
Table references
(3) The CTR credit in subsection (2) is referred to in table O23: CTR credits of consolidated groups, row 7 (reversal of tax advantage arrangement). The CTR debit in subsection (2) is referred to in table O24: CTR debits of consolidated groups, row 8 (tax advantage arrangement).
Credit date
(4) The credit date is the same as the debit date for the debit.
Defined in this Act: amount, CTR account, CTR credit, consolidated group, tax advantage,
Compare: 2004 No 35 s MI 17(1)(d), (2)(d)
CTR debits of consolidated groups
OP 87 Consolidated CTRA payment of dividend
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Debit
(1) A consolidated group has a CTR debit for the amount of a CTR credit attached to a dividend paid by a group company that is part of the group when the dividend is paid.
Table reference
(2) The CTR debit in subsection (1) is referred to in table O24: CTR debits of consolidated groups, row 2 (payment of dividend).
Debit date
(3) The debit date is the day the dividend is paid.
Defined in this Act: amount, company, CTR credit, CTR debit, consolidated group, dividend, pay,
Compare: 2004 No 35 s MI 18(1)(a), (2)(a)
OP 88 Consolidated CTRA transfer to group’s FDP account
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Debit
(1) A consolidated group has a CTR debit for a tax year for the amount of a credit balance in the CTR account that is treated as transferred to the group’s FDP account when—
(a) a credit balance exists in the group’s CTR account immediately before the end of the tax year; and
(b) a debit balance exists in the group’s FDP account immediately before the end of the tax year.
Finding balances
(2) For the purposes of subsection (1),—
(a) the credit balance and the debit balance are determined before the transfer is made under this section; and
-
(b) the credit balance in the CTR account is found after a CTR credit arises at the end of the tax year under the following sections and described in the following rows of table O23: CTR credits of consolidated groups—
(i) section OP 81, row 2 (tax credit for conduit tax relief):
(ii) section OP 85, row 6 (transfer from group’s FDP account).
Amount of credit and debit
(3) The amount of the credit is equal to the smaller of the 2 balances referred to in subsection (1), and becomes—
(a) the CTR debit; and
(b) the FDP credit under section OP 61.
Table references
(4) The table references are as follows
(a) the CTR debit in subsection (1) is referred to in table O24: CTR debits of consolidated groups, row 3 (transfer to the group’s FDP account):
(b) the CTR debit in subsection (3)(a) is referred to in table O24: CTR debits of consolidated groups, row 3 (transfer to group’s FDP account):
(c) the FDP credit in subsection (3)(b) is referred to in table O21: FDP credits of consolidated FDP groups, row 7 (transfer from group’s CTR account).
Debit date
(5) The debit date is the last day of the tax year.
Defined in this Act: amount, CTR account, CTR debit, consolidated group, dividend, FDP account, FDP credit, tax year,
Compare: 2004 No 35 ss MI 18(1)(g), (2)(g), MI 20(2)
OP 89 Consolidated CTRA adjustment for conduit tax relief
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Debit
(1) A consolidated group has a CTR debit for a tax year for the amount of an adjustment allowed under section FF 7(8) (Surplus to foreign dividends) to a group company that is part of the group on the last day of the income year corresponding to the tax year for which the adjustment is allowed.
Table reference
(2) The CTR debit in subsection (1) is referred to in table O24: CTR debits of consolidated groups, row 4 (adjustment for conduit tax relief).
Debit date
(3) The debit date is the day the company files a return of income for the tax year corresponding to the income year for which the adjustment is made.
Defined in this Act: amount, company, CTR debit, consolidated group, income year, return of income, tax year,
Compare: 2004 No 35 s MI 18(1)(b), (2)(b)
OP 90 Consolidated CTRA group company’s debit
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Debit
(1) A consolidated group has a CTR debit for an amount to the extent to which the amount would, in the absence of section OP 54(3), give rise to—
(a) a CTR debit described in a row of table O6: CTR debits, in the CTR account of a group company; and
(b) a CTR debit that would create or increase a debit balance in the group company’s CTR account.
Table reference
(2) The CTR debit in subsection (1) is referred to in table O24: CTR debits of consolidated groups, row 5 (group company’s debit).
Debit date
(3) The debit date is the day that would be the debit date if the debit had arisen in the company’s account.
Defined in this Act: amount, company, CTR account, CTR debit, consolidated group,
Compare: 2004 No 35 s MI 19(5)
OP 91 Consolidated CTRA increase in resident shareholding
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Debit
(1) A consolidated group has a CTR debit for the amount of a CTR credit in the group’s CTR account if the resident shareholding requirements of subsection (2) and section OA 8 (Shareholder continuity requirements for memorandum accounts) are not met.
Resident shareholding requirements
(2) For the purposes of subsection (1), the resident shareholding requirements are that—
(a) the credit continues to exist to the extent to which it is not reduced by a later CTR debit; and
(b) since the credit date for the credit, the percentage of the group’s shareholders who are resident in New Zealand does not increase by 34% or more; and
(c) an amount that is the CTR debit under subsection (1) arises for the amount of the credit that still exists when the requirement of paragraph (b) is not met.
Supporting rules
(3) The following rules apply for the purposes of subsection (2)
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(a) the percentage of shareholders resident in New Zealand at any time is found by taking the highest of the following percentages:
(i) the percentage of direct voting interests held in the group by residents; and
(ii) the percentage of direct market value interests held in the group, if a direct market value circumstance exists, by residents; and
(iii) if not all shares held by the group’s shareholders are shares of the same class, the percentage of total dividends that would be derived by residents if the group were liquidated:
(b) a credit retains its separate character and is not treated as part of a credit referred to in section OA 7 (Opening balances of memorandum accounts) in a later tax year; and
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(c) the amount by which a credit is reduced by an earlier or later debit is found by—
(i) treating debits as reducing credits in the order in which the credits arise; and
(ii) counting a debit, whether some or all, only once in the reduction of a credit; and
(d) the credit date for a credit arising under section OP 84 is the credit date when the credit arose in the CTR account of the group company; and
(e) the debit still arises despite an arrangement affecting the company’s shares that has a purpose or effect of defeating the intent and application of the resident shareholding requirements.
Table references
(4) The CTR debit in subsection (1) is referred to in table O24: CTR debits of consolidated groups, row 6 (increase in resident shareholding). The CTR credit in subsection (3)(d) is referred to in table O23: CTR credits of consolidated groups, row 5 (group company’s credits).
Debit date
(5) The debit date is the day on which the shareholding threshold is first reached or passed.
Defined in this Act: amount, arrangement, company, CTR account, CTR credit, CTR debit, consolidated group, direct market value circumstance, direct market value interest, direct voting interest, dividend, liquidation, resident, resident in New Zealand, share, shareholder, shares of the same class, tax year,
Compare: 2004 No 35 s MI 18(1)(e), (2)(e), (3), (4)
OP 92 Consolidated CTRA breach of CTR ratio
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Debit
(1) A consolidated group has a CTR debit for a tax year for the amount of a debit under section OD 17 (CTRA breach of CTR ratio) that would arise in the CTR account of a group company in the absence of OP 79.
Table references
(2) The group’s CTR debit in subsection (1) is referred to in table O24: CTR debits of consolidated groups, row 7 (breach of CTR ratio). The group company’s CTR credit in subsection (1) is referred to in table O6: CTR debits, row 9 (breach of CTR ratio).
Debit date
(3) The debit date is the last day of the tax year.
Defined in this Act: amount, company, CTR account, CTR debit, consolidated group, tax year,
Compare: 2004 No 35 s MI 18(1)(c), (2)(c)
OP 93 Consolidated CTRA tax advantage arrangement
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Debit
(1) A consolidated group has a CTR debit for the amount of a debit for a tax advantage arrangement determined under sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage) which apply to a CTR credit as if it were an FDP credit.
Table reference
(2) The CTR debit in subsection (1) is referred to in table O24: CTR debits of consolidated groups, row 8 (tax advantage arrangement).
Debit date
(3) The debit date is the last day of the tax year in which the arrangement began.
Defined in this Act: amount, arrangement, CTR debit, consolidated group, tax advantage, tax year,
Compare: 2004 No 35 s MI 18(1)(d), (2)(d)
OP 94 Consolidated CTRA final balance
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Debit
(1) A consolidated group has a CTR debit for a credit balance in the CTR account when the group is no longer required to maintain the account.
Table reference
(2) The CTR debit in subsection (1) is referred to in table O24: CTR debits of consolidated groups, row 9 (final balance).
Debit date
(3) The debit date is the day before the group is no longer required to maintain a CTR account.
Defined in this Act: consolidated group, CTR account, CTR debit,
Compare: 2004 No 35 s MI 18(1)(f), (2)(f)
Consolidated groups’ FDP payments and refunds
OP 95 FDP payable for credits and debits in group’s CTR account
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Liability for FDP
(1) A consolidated FDP group is liable to pay FDP for a tax year for the amount of—
(a) a CTR credit under section OP 85 (table O23: CTR credits of consolidated groups, row 6 (transfer from group’s FDP account)) at the end of the tax year; and
(b) a CTR debit set out in subsection (2) arising in the group’s CTR account during the tax year.
Particular debits
(2) The debit referred to in subsection (1)(b) is a debit under the following sections as described in the following rows of table O24: CTR debits of consolidated groups:
(a) section OP 91, row 6 (increase in resident shareholding):
(b) section OP 92, row 7 (breach of CTR ratio):
(c) section OP 93, row 8 (tax advantage arrangement):
(d) section OP 94, row 9 (final balance).
No FDP credit
(3) No FDP credit arises for an amount of FDP paid for a debit referred to in subsection (2)(a) to (c).
Payment dates
(4) The due date for payment to the Commissioner of the FDP is—
(a) 20 June following the end of the tax year for an FDP liability arising under subsection (1)(a); or
(b) the 20th day of the month following the end of the quarter in which the debit arises for an FDP liability arising under subsection (1)(b).
Defined in this Act: amount, Commissioner, CTR account, CTR credit, CTR debit, consolidated FDP group, FDP, FDP account, FDP credit, pay, quarter, tax year,
Compare: 2004 No 35 s MI 21
OP 96 Refund on transfer from group’s FDP account
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Refund
(1) A consolidated FDP group is entitled to a refund for the amount referred to in section OP 85 for a transfer from the group’s CTR account.
Table reference
(2) The amount in subsection (1) is referred to in table O23: CTR credits of consolidated groups, row 6 (transfer from group’s FDP account).
Application of refund
(3) The Commissioner may apply the amount of the refund to pay an amount due under the Inland Revenue Acts.
Defined in this Act: amount, Commissioner, CTR account, consolidated FDP group,
Compare: 2004 No 35 s MI 22(4)
Table O23 : conduit tax relief credits of consolidated groups
| Row | Conduit tax relief credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | Tax credit of tax for conduit relief | set out in section OP 81 | section OP 81 |
| 3 | Reduction of FDP for dividend derived | due date for payment of FDP | section OP 82 |
| 4 | CTR credit attached to dividend derived | day on which dividend is paid | section OP 83 |
| 5 | Credit from group company's CTR account | set out section OP 84 | section OP 84 |
| 6 | Transfer from group's FDP account | 31 March | section OP 85 |
| 7 | Reversal of debt to tax advantage arangement | debit date for debit | section OP 86 |
Table O23 : conduit tax relief debits of consolidated groups
| Row | Conduit tax relief debit | Debit date | Further defined |
| 1 | opening debit balance | 1 April | section OA 7 |
| 2 | CTR credit atttached to dividend paid by group company | day on which dividend is paid | section OP 87 |
| 3 | Transfer of closing credit balance to group's FDP account | 31 March | section OP 88 |
| 4 | Adjustment for conduit relief | day on which return of income with adjustment is filed | section OP 89 |
| 5 | Debit that would increase debit balance for group company | company's debit date | section OP 90 |
| 6 | Increase in resident shareholding by more than 34% | day of shareholding change | section OP 91 |
| 7 | Debit for breach of CTR ratio | 31 March | section OP 92 |
| 8 | Debit for tax advantage arrangement | last day of tax year in which arrangement began | section OP 93 |
| 9 | Credit balance when group is no longer required to maintain CTR account | day on which account stops | section OP 94 |
Consolidated groups and branch equivalent tax accounts
Introductory provisions
OP 97 Branch equivalent tax accounts of consolidated BETA groups
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Consolidated group accounts
(1) A consolidated group is a consolidated branch equivalent tax account (BETA) group for a tax year if—
(a) a group company is a BETA company at a time during the tax year; or
(b) the group chooses to maintain a branch equivalent tax account.
Notifying Commissioner
(2) The nominated company of a consolidated BETA group must notify the Commissioner of an election under subsection (1)(b)—
(a) no later than 21 days after the day of election; or
(b) by a later date if the Commissioner allows.
Defined in this Act: BETA company, branch equivalent tax account, Commissioner, consolidated BETA group, consolidated group, nominated company, notify, tax year,
Compare: 2004 No 35 s MF 7(1), (2)
OP 98 Choosing to stop being consolidated BETA group
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Election
(1) The nominated company of a consolidated BETA group may choose that the group’s status as a consolidated BETA group is to end.
No election
(2) An election under subsection (1) may be made during a tax year that is later than the tax year in which the group chooses under section OP 97 to become a consolidated BETA group.
When group ends status
(3) The election takes effect from the first day of the tax year after the tax year in which the election referred to in subsection (2) is made, but only if—
(a) the group files an annual ICA return for the year of election in the time allowed by section 69 of the Tax Administration Act 1994; and
(b) no group company is a BETA company in the tax year after the year of the election.
Defined in this Act: annual ICA return, BETA company, company, consolidated BETA group, nominated company, tax year,
Compare: 2004 No 35 s MF 7(3), (4)
OP 99 When credits and debits arise only in branch equivalent tax group accounts
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Credits only in group accounts
(1) A credit listed in subsection (2) arises only in the branch equivalent tax account of a consolidated BETA group and not in the branch equivalent tax account of a group company.
Particular credits
(2) The credit referred to in subsection (1) is a credit under the following sections and described in the following rows of table O25: branch equivalent tax credits of consolidated BETA groups:
(a) section OP 100, row 2 (payment of income tax on foreign income); and
(b) section OP 103, row 4 (refund of FDP).
Debits only in group accounts
(3) A debit listed in subsection (4) arises only in the branch equivalent tax account of a consolidated BETA group and not in the branch equivalent tax account of a group company.
Particular debits
(4) The debit referred to in subsection (3) is a debit under the following sections and described in the following rows of table O26: branch equivalent tax debits of consolidated BETA groups:
(a) section OP 105, row 2 (payment of FDP); and
(b) section OP 107, row 4 (refund of income tax).
Defined in this Act: branch equivalent tax account, branch equivalent tax credit, branch equivalent tax debit, company, consolidated BETA group,
Compare: 2004 No 35 s MF 9
Branch equivalent tax credits of consolidated BETA groups
OP 100 Consolidated BETA payment of income tax on foreign income
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Credit
(1) A consolidated BETA group has a branch equivalent tax credit for an income year for an amount calculated using the formula—
((group CFC income − group deductions) × tax rate) − foreign tax − debit balances.
Definition of items in formula
(2) In the formula,—
(a) group CFC income is the amount of attributed foreign income derived by the consolidated BETA group during the income year:
-
(b) group deductions is the total amount for the group for the income year of—
(i) attributed controlled foreign company (CFC) loss; and
(ii) attributed CFC net loss; and
(iii) foreign investment fund (FIF) loss; and
(iv) FIF net loss:
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(c) tax rate is the basic rate of income tax set out in—
(i) schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) if the company is not a Maori authority; or
(ii) schedule 1, part A, clause 7 if the company is a Maori authority:
(d) foreign tax is the amount of foreign tax credits allowed under sections LK 1 to LK 7 (which relate to tax credits relating to attributed CFC income), as applicable, relating to the group’s income tax liability for the income year:
(e) debit balances is the amount of all debit balances in a branch equivalent tax account applied to satisfy the group’s income tax liability for the income year.
Table reference
(3) The branch equivalent tax credit in subsection (1) is referred to in table O25: branch equivalent tax credits of consolidated BETA groups, row 2 (payment of income tax on foreign income).
Credit date
(4) The credit date is the day the nominated company files the return of income for the tax year corresponding to the income year for which the calculation is made.
Defined in this Act: amount, attributed CFC loss, attributed CFC net loss, attributed foreign income, basic rate, branch equivalent tax account, branch equivalent tax credit, consolidated BETA group, FDP, FIF loss, FIF net loss, foreign tax, income tax, income tax liability, income year, Maori authority, nominated company, return of income, tax year,
Compare: 2004 No 35 s MF 8(2)(a), (3)(a)
OP 101 Consolidated BETA payment of income tax
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When this section applies
(1) This section applies when a consolidated BETA group has a debit balance in its branch equivalent tax account or in the branch equivalent tax account of a group company arising as follows:
-
(a) the income of the group for an income year includes attributed CFC income that is derived by—
(i) the group; or
(ii) a company (group company B) that would be part of the same group of companies as the group if the group were a single company; and
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(b) an amount of FDP that gives rise to a debit included in the debit balance has been paid—
(i) directly; or
(ii) by reducing a tax loss; or
(iii) to reduce an FDP liability under section RG 7 (Reduction of payments for conduit tax relief).
Election
(2) The nominated company of the consolidated BETA group may choose to apply some or all of the debit balance to satisfy an income tax liability of the group or of group company B for a tax year that corresponds to the income year referred to in subsection (1).
Credit
(3) The amount that is applied to satisfy the income tax liability referred to in subsection (2) is a branch equivalent tax credit in the group’s branch equivalent tax account.
Table reference
(4) The branch equivalent tax credit in subsection (3) is referred to in table O25: branch equivalent tax credits of consolidated BETA groups, row 3 (payment of income tax).
Income tax paid
(5) For the purposes of this section, the income tax liability—
(a) is calculated by applying the formula in section OP 100 on the basis that the item debit balances is zero; and
(b) is satisfied to the extent to which the liability is no more than the income tax payable in relation to the amount of attributed CFC income.
Who makes the election
(6) The consolidated BETA group makes the election referred to in subsection (2) as follows:
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(a) if the group’s income tax liability is to be satisfied, the election may be made by—
(i) the nominated company; or
(ii) another group company; or
(iii) a company that would be part of the same group of companies as the group if the group were a single company; and
(b) if group company B’s income tax liability is to be satisfied, the election must be made by the nominated company.
How election made
(7) An election is made under subsection (6) by recording the credit in the branch equivalent tax account of the group or group company B, as applicable.
Credit date
(8) The credit date is the day of election.
Defined in this Act: amount, attributed CFC income, branch equivalent tax account, branch equivalent tax credit, company, consolidated BETA group, dividend, FDP, group of companies, income, income tax, income tax liability, income year, Maori authority, nominated company, pay, tax loss, tax year,
Compare: 2004 No 35 ss MF 8(2)(c), (3)(b), MF 10(4)–(6)
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OP 102 Consolidated BETA remaining debit balances
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When this section applies
(1) This section applies for the purposes of section OP 101 when an income tax liability of a consolidated BETA group or group company is satisfied by applying some of a debit balance in the group’s branch equivalent tax account, or in the account of another company in the same consolidated BETA group, and an unused portion of the debit balance remains after the income tax liability is satisfied.
Conversion to tax loss
(2) The unused amount is converted into a tax loss component for the purposes of sections IA 2 to IA 10 (which relate to the treatment of tax losses). The amount of the tax loss component is calculated using the formula—
Definition of items in formula
(3) In the formula,—
(a) balance is the amount of the debit balance remaining in the branch equivalent tax account:
-
(b) tax rate is the basic rate of income tax set out in—
(i) schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits) if the company is not a Maori authority; or
(ii) schedule 1, part A, clause 7 if the company is a Maori authority.
Group’s tax loss
(4) The tax loss belongs to the consolidated group.
Defined in this Act: amount, attributed CFC income, basic rate, branch equivalent tax account, branch equivalent tax credit, company, consolidated BETA group, dividend, income tax, income tax liability, Maori authority, tax loss component,
Compare: 2004 No 35 ss MF 8(2)(c), (3)(b), MF 10(4)–(6)
OP 103 Consolidated BETA refund of FDP
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Credit
(1) A consolidated BETA group has a branch equivalent tax credit for a tax year for the amount of a refund of FDP. Subsections (2) and (3) override this subsection.
Refund giving rise to debit
(2) A refund under subsection (1) must be a refund of a payment of FDP that gave rise to a debit under section OP 105.
Reduction
(3) The amount of the credit under subsection (1) is reduced to the extent to which—
(a) the payment of FDP is made before a branch equivalent tax credit arises under section OP 104 in the group’s branch equivalent tax account; and
(b) the amount of the refund is no more than the amount of the credit for the loss of shareholder continuity.
Table references
(4) The table references are as follows:
(a) the branch equivalent tax credit in subsection (1) is referred to in table O25: branch equivalent tax credits of consolidated BETA groups, row 4 (refund of FDP):
(b) the branch equivalent tax debit in subsection (2) is referred to in table O26: branch equivalent tax debits of consolidated BETA groups, row 2 (payment of FDP):
(c) the branch equivalent tax credit in subsection (3)(a) is referred to in table O25: branch equivalent tax credits of consolidated BETA groups, row 5 (credit for loss of shareholder continuity).
Credit date
(5) The credit date is the day the refund is made.
Defined in this Act: amount, branch equivalent tax account, branch equivalent tax credit, consolidated BETA group, consolidated group, FDP, pay, shareholder, tax year,
Compare: 2004 No 35 s MF 8(2)(d), (3)(c)
OP 104 Consolidated BETA credit for loss of shareholder continuity
-
Credit
(1) A consolidated BETA group has a branch equivalent tax credit for the amount of a branch equivalent tax debit retained in the branch equivalent tax account and unused before the date on which shareholder continuity is lost.
Table reference
(2) The branch equivalent tax credit in subsection (1) is referred to in table O25: branch equivalent tax credits of consolidated BETA groups, row 5 (credit for loss of shareholder continuity).
Credit date
(3) The credit date is the day of loss of shareholder continuity.
Defined in this Act: amount, branch equivalent tax account, branch equivalent tax credit, branch equivalent tax debit, consolidated BETA group, shareholder,
Compare: 2004 No 35 s MF 8(2)(e), (3)(d)
Branch equivalent tax debits of consolidated BETA groups
OP 105 Consolidated BETA payment of FDP
-
Debit
(1) A consolidated BETA group has a branch equivalent tax debit for a payment of FDP that—
(a) is calculated before a reduction in liability under section RG 7 (Reduction of payments for conduit tax relief); and
(b) must have been payable in relation to a dividend derived by a group company from an income interest in a CFC; and
(c) may have been paid by choosing to reduce a tax loss.
Table reference
(2) The branch equivalent tax debit in subsection (1) is referred to in table O26: branch equivalent tax debits of consolidated BETA groups, row 2 (payment of FDP).
Debit date
(3) The debit date is the day of payment.
Defined in this Act: branch equivalent tax account, branch equivalent tax debit, CFC, company, consolidated BETA group, dividend, FDP, income interest, pay, tax loss,
Compare: 2004 No 35 s MF 8(4)(a), (5)(a)
OP 106 Consolidated BETA reduction of FDP
-
Election
(1) The nominated company of a consolidated BETA group may choose to use some or all of a credit balance in the group’s branch equivalent tax account to reduce an FDP liability of—
(a) a group company; or
(b) a company that would be part of the same group of companies as the group if the group were a single company.
Debit
(2) The amount of the reduction is a debit arising in the group’s branch equivalent tax account.
Table reference
(3) The branch equivalent tax debit in subsection (2) is referred to in table O26: branch equivalent tax debits of consolidated BETA groups, row 3 (reduction of FDP).
Manner of election
(4) The nominated company makes the election by recording the amount of the credit balance used as a debit in the group’s branch equivalent tax account.
Debit date
(5) The debit date is the due date for the payment of FDP.
Defined in this Act: amount, branch equivalent tax account, branch equivalent tax debit, company, consolidated BETA group, dividend, FDP, group of companies, nominated company, pay,
Compare: 2004 No 35 ss MF 8(4)(b), (5)(b), MF 10(1)
OP 107 Consolidated BETA refund of income tax
-
Debit
(1) A consolidated BETA group has a branch equivalent tax debit for the amount of a refund of income tax attributable to income tax paid for a tax year on attributed CFC income as if it were the only income derived by the group.
Reduction
(2) The amount of the debit is reduced to the extent to which—
(a) a debit arises in the group’s branch equivalent tax account under section OP 108; and
(b) the income tax was paid before the debit date for the debit for loss of shareholder continuity.
Table references
(3) The branch equivalent tax debit in subsection (1) is referred to in table O26: branch equivalent tax debits of consolidated BETA groups, row 4 (refund of income tax). The branch equivalent tax debit in subsection (2)(a) is referred to in table O26: branch equivalent tax debits of consolidated BETA groups, row 5 (debit for loss of shareholder continuity).
Debit date
(4) The debit date is the day the refund is made.
Defined in this Act: amount, attributed CFC income, branch equivalent tax account, branch equivalent tax debit, consolidated BETA group, income, income tax, pay, shareholder, tax year,
Compare: 2004 No 35 s MF 8(4)(c), (5)(c)
OP 108 Consolidated BETA debit for loss of shareholder continuity
-
Debit
(1) A consolidated BETA group has a branch equivalent tax debit for the amount of a branch equivalent tax credit retained in the branch equivalent tax account and unused before the date on which shareholder continuity is lost.
Table reference
(2) The branch equivalent tax debit in subsection (1) is referred to in table O26: branch equivalent tax debits of consolidated BETA groups, row 5 (debit for loss of shareholder continuity).
Debit date
(3) The debit date is the day of loss of shareholder continuity.
Defined in this Act: amount, branch equivalent tax account, branch equivalent tax credit, branch equivalent tax debit, consolidated BETA group, shareholder,
Compare: 2004 No 35 s MF 8(4)(d), (5)(d)
Table O25 : branch equivalent tax credits of consolidated BETA groups
| Row | Branch equivalent tax credit | Credit date | Further defined |
| 1 | Opening credit balance | 1 April | section OA 7 |
| 2 | Income tax paid on foreign incom derived in income year | day on which return of income for income year is filed | section OP 100 |
| 3 | Debit balance applied to satisfy income tax liabilit | day of election | section OP 101 |
| 4 | Refund of FDP | day of refund | section OP 103 |
| 5 | Credit for loss of shareholder continuity | day of loss of continuity | section OP 104 |
Table O26 : branch equivalent tax debits of consolidated BETA groups
| Row | Brach equivalent debt | Debit date | Further defined |
| 1 | opening debit balance | 1 April | section OA 7 |
| 2 | FDP paid on dividend derived from CFC | day of payment | section OP 105 |
| 3 | Credit balance applied to satisfy FDP liability | due date for payment of FDP | section OP 106 |
| 4 | Refund of income tax for attributed CFC income | day of refund | section OP 107 |
| 5 | Debit for loss of shareholder continuity | day of loss of continuity | section OP 108 |
Consolidated groups and policyholder credit accounts
Introductory provision
OP 109 Policyholder credit accounts of consolidated groups
-
A consolidated group has a policyholder credit account if a group company is a policyholder credit account (PCA) company.
Defined in this Act: company, consolidated group, PCA company, policyholder credit account,
Compare: 2004 No 35 s ME 25
Policyholder credits of consolidated groups
OP 110 Consolidated PCA transfer from imputation credit account
-
Credit
(1) A consolidated group has a policyholder credit for an amount equal to an imputation debit under section OP 44.
Table references
(2) The policyholder credit in subsection (1) is referred to in table O27: policyholder credits of consolidated groups, row 2 (transfer from imputation credit account). The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 18 (transfer to policyholder credit account).
Credit date
(3) The credit date is the same as the debit date recorded for the transfer in the imputation credit account.
Defined in this Act: amount, consolidated group, imputation credit account, imputation debit, policyholder credit,
Compare: 2004 No 35 s ME 26(2)(a), (3)(a)
OP 111 Consolidated PCA transfer from FDP account
-
Credit
(1) A consolidated group has a policyholder credit for an amount equal to the amount of an FDP debit under section OP 74.
Table references
(2) The policyholder credit in subsection (1) is referred to in table O27: policyholder credits of consolidated groups, row 3 (transfer from FDP account). The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 12 (transfer to policyholder credit account).
Credit date
(3) The credit date is the day of election referred to in section OP 74.
Defined in this Act: amount, consolidated group, FDP debit, policyholder credit,
Compare: 2004 No 35 s ME 26(2)(b), (3)(b)
OP 112 Consolidated PCA group company’s credit
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Credit
(1) A consolidated group has a policyholder credit for the amount of a credit arising as follows:
(a) a policyholder credit described in a row of table O13: policyholder credits, arises in the policyholder credit account of a group company; and
(b) a policyholder debit described in a row of table O28: policyholder debits of consolidated groups, arises in the policyholder credit account of the group; and
(c) the debit is not offset by a credit arising in the group account before or on the same date on which the credit arose in the group company’s account.
Table reference
(2) The policyholder credit in subsection (1) is referred to in table O27: policyholder credits of consolidated groups, row 4 (group company’s credit).
Offsetting debits
(3) For the purposes of subsection (1)(c), to determine whether a debit has been offset by a credit in the group account—
(a) credits are treated as reducing debits in the order in which the credits arise; and
(b) a credit, whether some or all, is counted only once in determining whether the debit has been offset; and
-
(c) credits in the accounts of more than 1 group company become a credit to the group account—
(i) in the order of their credit date; and
(ii) as chosen by the group, if the credits arise on the same credit date; and
(iii) on a pro rata basis, if no election is made under subparagraph (ii).
Credit date
(4) The credit date is the day the debit is recorded in the group account.
Defined in this Act: amount, company, consolidated group, policyholder credit, policyholder credit account, policyholder debit,
Compare: 2004 No 35 ss ME 26(2)(c), (3)(c), ME 27(1), (3)
OP 113 Consolidated PCA maximum deficit debit in FDP account
-
Credit
(1) A consolidated group has a policyholder credit for a tax year for an amount equal to the amount of the FDP debit—
(a) that arises during the tax year in the group’s FDP account under section OP 75; and
(b) whose amount is calculated under sections OC 23 and OC 36 (which relate to the maximum deficit debit).
Table references
(2) The policyholder credit in subsection (1) is referred to in table O27: policyholder credits of consolidated groups, row 5 (credit for FDP account maximum deficit). The FDP debit in subsection (1)(a) is referred to in table O22: FDP debits of consolidated FDP groups, row 13 (breach of FDP ratio by PCA company).
Credit date
(3) The credit date is the last day of the tax year.
Defined in this Act: amount, consolidated group, FDP account, FDP debit, policyholder credit, tax year,
Compare: 2004 No 35 s ME 26(2)(d), (3)(d)
OP 114 Consolidated PCA reduced deficit debit in FDP account
-
Credit
(1) A consolidated group has a policyholder credit for a tax year for an amount equal to the amount of the FDP debit—
(a) that arises during the tax year in the group’s FDP account under section OP 75; and
(b) whose amount is calculated under sections OC 23 and OC 38 (which relate to the reduced deficit debit).
Table references
(2) The policyholder credit in subsection (1) is referred to in table O27: policyholder credits of consolidated groups, row 6 (credit for FDP account reduced deficit). The FDP debit in subsection (1)(a) is referred to in table O22: FDP debits of consolidated FDP groups, row 13 (breach of FDP ratio by PCA company).
Credit date
(3) The credit date is the last day of the tax year.
Defined in this Act: amount, consolidated group, FDP account, FDP debit, policyholder credit, tax year,
Compare: 2004 No 35 s ME 26(2)(e), (3)(d)
Policyholder debits of consolidated groups
OP 115 Consolidated PCA payment of tax relating to policyholder base
-
Election
(1) The nominated company of a consolidated group may choose for a tax year to apply some or all of a credit balance in the group’s policyholder credit account to satisfy—
(a) a policyholder base income tax liability of the group; or
(b) a provisional tax liability of the group for its policyholder base.
Manner of election
(2) The company makes an election under subsection (1) by recording as a debit in the group account the amount of the credit balance applied to satisfy the policyholder base income tax liability.
Effect of election
(3) As a result of the election—
(a) a policyholder debit arises in the policyholder credit account; and
(b) the group’s liability for the income tax or provisional tax is satisfied.
Table reference
(4) The policyholder debit in subsection (3)(a) is referred to in table O28: policy-holder debits of consolidated groups, row 2 (payment of tax relating to policyholder base).
Debit date
(5) The debit date is the last day of the income year corresponding to the tax year.
Defined in this Act: amount, consolidated group, income tax, income year, nominated company, policyholder base, policyholder base income tax liability, policyholder credit account, policyholder debit, provisional tax, tax year,
Compare: 2004 No 35 ss ME 26(4)(a), (5)(a), ME 28(1), (2)
OP 116 Consolidated PCA transfer to imputation credit account
-
Election
(1) The nominated company of a consolidated group may choose for a tax year to transfer some or all of a credit balance in the group’s policyholder credit account to the imputation credit account of—
(a) the consolidated imputation group that the company is part of; or
(b) the imputation group that includes the companies in the consolidated group.
Exclusion
(2) Despite subsection (1), the election must exclude an amount of the credit balance that arises in the following circumstances:
(a) the group has adopted a non-standard accounting year; and
-
(b) during the accounting year that includes the last day of the tax year, an election has been made that means the credit balance includes a credit under the following sections and described in the following rows of table O27: policyholder credits of consolidated groups:
(i) section OP 110, row 2 (transfer from imputation credit account):
(ii) section OP 111, row 3 (transfer from FDP account); and
(c) an election under this section would result in a debit to the policyholder credit account during the tax year.
Debit and credit
(3) The amount of the credit balance transferred under subsection (1) is—
(a) a debit in the group’s policyholder credit account; and
(b) a credit under section OP 21 in the imputation credit account of the relevant group.
Table references
(4) The policyholder debit in subsection (3)(a) is referred to in table O28: policyholder debits of consolidated groups, row 3 (transfer to imputation credit account). The imputation credit in subsection (3)(b) is referred to in table O19: imputation credits of consolidated imputation groups, row 16 (transfer from group’s policyholder credit account).
Credit balance reduced
(5) Despite subsection (2)(b), the credit balance includes a credit that is cancelled by a later debit to the account.
Cancellation
(6) Whether a debit cancels a credit for the purposes of subsection (3) is found by treating debits as offsetting credits in the order in which the credits arise in the account.
Manner of election
(7) The company makes the election by recording the amount of the credit balance transferred as—
(a) a debit in the group’s policyholder credit account; and
-
(b) a credit in the imputation credit account of—
(i) the consolidated imputation group; or
(ii) the imputation group.
Debit date
(8) The debit date is the day of election.
Defined in this Act: accounting year, amount, company, consolidated group, consolidated imputation group, imputation credit account, imputation group, nominated company, non-standard accounting year, PCA company, policyholder credit, policyholder credit account, policyholder debit, tax year,
Compare: 2004 No 35 ss ME 26(4)(b), (5)(b), ME 28(3), (4)
Table O27: policyholder credits of consolidated groups
Row Polictyholder credit Credit date Further defined 1 Opening credit balance 1 April section OA 7 2 Transfer of credit balance from imputation credit account debit date in imputation credit account for transfer section OP 110 3 Transfer of credit balance from FDP account day of election under section OP 74 section OP 111 4 Credit transferred from group company's policyholder credit account debit date in group company's account for transfer section OP 112 5 Debit of FDP account maximum deficit that arises during tax year 31 March section OP 113 6 Transfer of credit balance from FDP account for reduced deficit debit that arises during tax year 31 March section OP 114 Table O28: policyholder debits of consolidated groups
Row Policyholder debit Debit date Further defined 1 Opening debit balance 1 April section OA 7 2 Credit balance applied to satisfy policyholder base income tax or provisional tax liability for income year last day of income year section OP 115 3 Credit balance transferred to imputation credit account day of election section OP 116
Subpart OZ—Terminating provisions
OZ 1 No imputation credit for pre-imputation tax paid
-
No imputation credit arises in the imputation credit account of an imputation credit account (ICA) company for a payment of income tax imposed for a pre-imputation income year.
Defined in this Act: ICA company, imputation credit, imputation credit account, income tax, pay, pre-imputation income year,
Compare: 2004 No 35 s ME 4(1)(a)(viii)
OZ 2 No imputation debit for pre-imputation refund
-
No imputation debit arises in the imputation credit account of an ICA company for a refund of income tax for a pre-imputation income year.
Defined in this Act: ICA company, imputation credit account, imputation debit, income tax, pre-imputation income year,
Compare: 2004 No 35 s ME 5(1)(e)(i)
OZ 3 Overpaid income tax or foreign dividend payment for pre-imputation income year
-
Debit
(1) An ICA company has an imputation debit for an amount of overpaid income tax and foreign dividend payment (FDP) that is applied, when the company is not a foreign dividend payment account (FDPA) company, to satisfy the company’s income tax liability under BB 1 (Imposition of income tax) for a pre-imputation income year. Subsection (2) overrides this subsection.
No debit
(2) The debit does not include an amount of overpaid income tax and FDP that is—
(a) paid before an imputation debit under section OB 41 (ICA debit for loss of shareholder continuity); and
(b) no more than the debit for loss of shareholder continuity.
Table references
(3) The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 11 (overpayment of income tax or FDP). The imputation debit in subsection (2)(a) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity).
Debit date
(4) The debit date is the day the amount is applied.
Defined in this Act: amount, company, FDP, FDPA company, ICA company, imputation credit account, imputation debit, income tax, income tax liability, pay, pre-imputation income year, shareholder,
Compare: 2004 No 35 s ME 5(1)(n)
OZ 4 Terminating modifications to debits for loss of shareholder continuity
-
The terminating modifications that apply under section OA 8(8) (Shareholder continuity requirements for memorandum accounts) are—
(a) the shareholder continuity requirement does not apply to a credit that arises on or before 16 December 1988; and
-
(b) credits arising after 16 December 1988 and before 1 April 1992 are treated as 1 credit arising on 1 April 1992 and, until such time as the credit can be treated as cancelled by later debits,—
(i) the shareholder continuity requirement applying to the credit is the earlier version of the requirement incorporated in section 394E(2)(g) of the Income Tax Act 1976 (despite its repeal and replacement by section 51 of the Income Tax Act Amendment Act (No 2) 1992); and
(ii) the earlier version of the requirement of section 394E(2)(g) applies by reading the figure
“66”
instead of the figure“75”
.
Defined in this Act: shareholder,
Compare: 2004 No 35 ss ME 5(4), MG 5(4)
OZ 5 ASCA lost excess available subscribed capital
-
When this section applies
(1) This section applies when a public unit trust or a group investment fund that derives category A income—
(a) is in existence between 17 October 2002 and 30 September 2003 (both dates inclusive); and
(b) has redeemed a unit in the trust or fund; and
(c) the slice rule was used to determine the tax treatment of the proceeds from the redemption; and
(d) the amount paid on subscription for a unit is less than the amount paid on redemption.
Calculating opening balance
(2) The trust or fund may choose for the period to calculate an opening credit balance using 1 of the methods set out in subsections (3) and (4).
Method 1
(3) Method 1 requires the trust or fund to calculate the actual amount of available subscribed capital lost, that is the difference, in total, between the amount paid on subscription for a unit and the amount paid on redemption of the unit.
Method 2
(4) Method 2 requires the trust or fund to make a calculation for the notional winding up of the trust or fund by taking the following steps:
(a) step 1: determine the total amount of income tax that would be payable on liquidation, treating the value of assets and liabilities as determined at their market value at the date of the notional liquidation according to provisions applying at that date:
(b) step 2: determine the amount of notional credits that are available after notional tax is paid in relation to them:
(c) step 3: determine the amount of notional credits required to fully impute, for each unit holder, the payment of a redemption dividend, and aggregate the amounts, applying the maximum imputation ratio to the total amount:
(d) step 4: establish the imputation credit shortfall between the notional credits under step 2 and the credits required under step 3.
Opening balance
(5) The amount of the opening balance is—
(a) the amount of the difference for method 1; and
(b) the shortfall referred to in subsection (4)(d) for method 2.
Certain causes of shortfalls
(6) For the purposes of subsection (4), the structural features of the taxation and imputation systems that would allow a company that does not issue shares on terms subject to section CD 22(4) (Returns of capital: off-market share cancellations) to fully impute a distribution made on the liquidation of the company, include the tax effects of—
(a) non-taxable gains and losses, including exempt income but excluding a dividend subject to sections RG 2 and RG 3 (which relate to foreign dividends and liability for FDP); and
(b) imputation credits lost because shareholder continuity is lost; and
(c) foreign tax credits; and
(d) retained earnings generated before the trust or fund established an imputation credit account.
Date of notional liquidation, orderly calculations
(7) For the purposes of this section,—
(a) the date of notional liquidation is the date chosen by the trust or fund falling in the period referred to in subsection (1)(a):
(b) a calculation under this section must be undertaken in a manner consistent with the preparation of financial statements and unit pricing calculations, based on an orderly realisation of assets in the ordinary course of business and demonstrable market valuations.
Defined in this Act: amount, available subscribed capital, business, category A income, company, dividend, exempt income, financial statements, foreign tax, group investment fund, imputation credit, imputation credit account, imputation ratio, liquidation, pay, public unit trust, share, shareholder, slice rule,
Compare: 2004 No 35 ss MJ 1(2), MJ 4
OZ 6 ASCA redemption of unused investments
-
When this section applies
(1) The section applies when a public unit trust or a group investment fund that derives category A income—
(a) redeems a share within the meaning in paragraphs (c) and (d) of the definition of share in section YA 1 (Definitions); and
(b) has never established an ASC account.
Election
(2) The company may choose to establish an ASC account, and the only ASC credit arising in the account is an ASC credit for an opening balance calculated under section OZ 5(5).
Closing balance
(3) An opening balance under subsection (2) is treated as the closing balance of the account.
Defined in this Act: ASC account, ASC credit, category A income, complying trust, group investment fund, public unit trust, share,
Compare: 2004 No 35 s MJ 7
Legislative history | |
|---|---|
| 15 November 2006 | Introduction (Bill 92-1) |
| 23 November 2006 | First reading and referral to Finance and Expenditure Committee |
| 16 July 2007 | Reported from Finance and Expenditure Committee (Bill 91-2) |
| 16 August 2007 | Second reading |
| 21 August 2007 | Committee of the whole House |
| 25 October 2007 | Third reading |
| 1 November 2007 | Royal assent |
This Act is administered by the Inland Revenue Department.
Versions
Income Tax Act 2007
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