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Income Tax Act 2007

Avoidance and non-market transactions - Avoidance: specific

GB 43: Reconstruction of Maori authority credit arrangements to obtain tax advantage

You could also call this:

“Rules to prevent unfair tax advantages in Maori authority credit arrangements”

If you’re part of a Maori authority, there are rules about how tax credits are handled. These rules are meant to stop people from getting unfair tax advantages.

If someone tries to get a tax advantage by changing how shares are given out or by directing credits to certain members, the Commissioner of Inland Revenue can step in. They can stop members from getting extra tax credits they shouldn’t have. They can also make the Maori authority pay back credits to their account.

If a Maori authority tries to direct credits unfairly on its own, it might have to pay back credits to its account.

The Commissioner decides how many credits need to be paid back or denied. They can make official decisions about this using section 90AG of the Tax Administration Act 1994.

In these rules, getting extra credits in the Maori authority’s account is called an “account advantage”. When a member gets a tax credit they shouldn’t, it’s called a “tax credit advantage”.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517023.

Topics:
Money and consumer rights > Taxes
Māori affairs > Māori land
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GB 42: Maori authority credit arrangements to obtain tax advantage, or

“Rules to prevent unfair use of Māori authority tax credits”

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Part G Avoidance and non-market transactions
Avoidance: specific

GB 43Reconstruction of Maori authority credit arrangements to obtain tax advantage

  1. In the case of an arrangement for a share disposal or issue as described in section GB 42(2) or a streaming arrangement as described in section GB 42(3), if the Commissioner decides this subsection should apply, the following paragraphs apply:

  2. a member who would get a tax credit advantage from the arrangement is denied it:
    1. a Maori authority that would get both a tax credit advantage and an account advantage from the arrangement has a debit to its Maori authority credit account in the tax year in which the arrangement began.

      1. In the case of a streaming arrangement as described in section GB 42(3) in which the Maori authority is the only party, or if the Commissioner decides this subsection should apply, the Maori authority has a debit to its Maori authority credit account in the tax year in which the arrangement began. Subsection (1) does not apply to the extent to which this subsection applies to the arrangement.

      2. The amount of the credit denied under subsection (1)(a) and the debit arising under subsection (1)(b) or (2) is in each case the amount of the Maori authority credit that the Commissioner determines is subject to the arrangement.

      3. The Commissioner may make determinations for the purposes of this section under section 90AG of the Tax Administration Act 1994.

      4. In this section and section 90AG of the Tax Administration Act 1994,—

        account advantage means a credit arising to a Maori authority credit account under sections OK 2 to OK 9 (which relate to credits arising to Maori authority credit accounts)

          tax credit advantage means a tax credit allowed under section LO 1 (Tax credits for Maori authority credits).

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