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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 1: General rules for companies with imputation credit accounts

You could also call this:

“Rules for companies that need to keep a special tax account”

If you’re a company that lives in New Zealand, you need to set up and keep a special account called an imputation credit account for each tax year. This account is important for your taxes.

But not all companies in New Zealand need to do this. You don’t need an imputation credit account if:

You’re a company that can’t give money to your shareholders because your rules say so.

You only make money that doesn’t get taxed, except for some specific types of income from owning things.

You’re treated like you don’t live in New Zealand under a special agreement with another country.

You’re a Maori authority, which is a special type of organisation for Maori groups.

You’re a local authority, like a city council.

You’re a Crown Research Institute, which is a special type of science organisation.

You’re part of the Accident Compensation Corporation or related to it in a certain way.

You’re a multi-rate PIE, which is a special type of investment company.

If any of these apply to you, you don’t have to set up an imputation credit account.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518696.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 1General rules for companies with imputation credit accounts

  1. A company that is resident in New Zealand is a company (an ICA company) that must establish and maintain an imputation credit account for a tax year. Subsection (2) overrides this subsection.

  2. A company that is resident in New Zealand is excluded from being an ICA company if it is—

  3. a company that—
        1. has a constitution that prohibits a distribution to a shareholder; or
          1. derives only exempt income other than income exempt under sections CW 9 and CW 10 (which relate to income from equity); or
            1. under a double tax agreement, is treated as not being resident in New Zealand; or
            2. a Maori authority; or
              1. a local authority; or
                1. a Crown Research Institute; or
                  1. a subsidiary of the Accident Compensation Corporation affected by section 266 of the Accident Compensation Act 2001, or section 334(1) of the Accident Insurance Act 1998; or
                    1. a multi-rate PIE.

                      1. Repealed
                      Compare
                      Notes
                      • Section OB 1(1): amended (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 119(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
                      • Section OB 1(2)(a)(i): repealed (with effect on 1 April 2008), on , by section 378(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section OB 1(2)(a)(ii): repealed, on , by section 258 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                      • Section OB 1(2)(a)(iv): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 128(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
                      • Section OB 1(2)(a)(iv): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 91(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
                      • Section OB 1(2)(e): amended, on , by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                      • Section OB 1(2)(f): substituted, on (applying for the 2010–11 and later income years), by section 378(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section OB 1(3) heading: repealed (with effect on 1 April 2008), on , pursuant to section 378(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section OB 1(3): repealed (with effect on 1 April 2008), on , by section 378(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section OB 1 list of defined terms Australian ICA company: repealed (with effect on 1 April 2008), on , by section 378(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section OB 1 list of defined terms multi-rate PIE: inserted, on , by section 378(6)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section OB 1 list of defined terms portfolio tax rate entity: repealed, on , by section 378(6)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section OB 1 list of defined terms resident in Australia: repealed (with effect on 1 April 2008), on , by section 378(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).