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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 4: ICA payment of tax or transfer to account

You could also call this:

“Imputation credits for tax payments or transfers to a company's account”

This law explains how an ICA company can get an imputation credit for paying income tax or provisional tax, or when excess tax is transferred to their account. Here’s what you need to know:

You can get an imputation credit when you pay income tax or provisional tax, or when excess tax is transferred to your account from another period, tax type, or company.

The credit is usually given on the day you pay the tax. But if it’s a transfer of excess tax, the credit date might be the day you asked for the transfer or a different date, depending on certain conditions.

There are some situations where you won’t get an imputation credit. For example, you won’t get a credit for:

  • Transferring money from a tax pooling account to a tax account with the Commissioner
  • Income tax paid on money earned when you weren’t an ICA company
  • Income tax paid by a life insurer on certain types of income
  • Income tax paid using other tax credits
  • Income tax paid using a research and development tax credit
  • Some other specific types of tax payments

You can only get one imputation credit for each amount of tax paid.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518705.

Topics:
Money and consumer rights > Taxes
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OB 3B: General rule for life insurer's policyholder base, or

“Life insurers: No imputation credits or debits for policyholder base”

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OB 5: ICA deposit in tax pooling account, or

“ICA companies get credits for depositing money into tax pooling accounts”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 4ICA payment of tax or transfer to account

  1. An ICA company has an imputation credit for an amount of income tax or provisional tax paid or an amount of excess tax transferred under section 173L or 173M of the Tax Administration Act 1994 or section RC 32(5)(b) (Wholly-owned groups of companies). Subsection (3) overrides this subsection.

  2. The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 2 (provisional tax or income tax paid), row 2B (transfer to ICA under section 173L or 173M of the Tax Administration Act 1994 or section RC 32(5)(b)), row 2C (transfer to ICA under section 173L or 173M of the Tax Administration Act 1994 or section RC 32(5)(b)), and row 2D (transfer to ICA under section 173L or 173M of the Tax Administration Act 1994 or section RC 32(5)(b)).

  3. An ICA company does not have an imputation credit for an amount of—

  4. a transfer from a tax pooling account to a tax account with the Commissioner; or
    1. income tax paid on income derived when the company is not an ICA company; or
      1. income tax paid by a life insurer to satisfy its schedular income tax liability for schedular policyholder base income; or
        1. 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
              1. income tax paid by a tax credit under subpart LP (Tax credits for supplementary dividends); or
                1. income tax paid by crediting a research and development tax credit against income tax liability; or
                  1. further income tax applied under section OB 69 to pay income tax or provisional tax; or
                        1. 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).

                          1. The credit date is—

                          2. for an amount of income tax or provisional tax paid other than an amount referred to in paragraph (c), the day the tax is paid:
                              1. for an amount of excess tax transferred in a tax year (the transfer year) from another period or tax type of the ICA company on a date under section 173L of the Tax Administration Act 1994, or from another ICA company on a date under section 173M of that Act or section RC 32(5)(b),—
                                1. despite section 173L(2)(a) to (bb) of that Act, the date of the request for the transfer if that date is in the transfer year; or
                                  1. despite section 173L(2)(a) to (bb) of that Act, the date of the request for the transfer if that date is in the tax year following the transfer year and, at the end of the transfer year, the credit in the ICA from which the amount is transferred equals or exceeds the amount of all transfers from that account requested in the transfer year under section 173L or 173M of that Act or section RC 32(5)(b), and the ICA to which the transfer is made is in credit; or
                                    1. the date referred to in the opening words of this paragraph, if the requirements of neither subparagraph (i) nor subparagraph (ii) are met.

                                    2. No amount may give rise to more than 1 imputation credit.

                                    Compare
                                    Notes
                                    • Section OB 4 heading: replaced, on , by section 137(1) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                    • Section OB 4(1): replaced, on , by section 137(2) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                    • Section OB 4(2): amended, on , by section 137(3) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                    • Section OB 4(3)(c): substituted, on , by section 381(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                    • Section OB 4(3)(e): repealed, on , by section 189(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                                    • Section OB 4(3)(eb): repealed (with effect on 1 April 2009), on , by section 189(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                                    • Section OB 4(3)(fb): inserted, on , by section 11(1) (and see section 3 for application) of the Taxation (Research and Development Tax Credits) Act 2019 (2019 No 15).
                                    • Section OB 4(3)(gb): repealed, on , by section 189(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                                    • Section OB 4(3)(h): repealed, on (applying for income years beginning on or after that date), by section 92(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
                                    • Section OB 4(4): substituted (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 112(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                    • Section OB 4(4)(a): amended, on , by section 137(4) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                    • Section OB 4(4)(b): repealed, on , by section 137(5) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                    • Section OB 4(4)(c): inserted, on , by section 137(5) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                    • Section OB 4 list of defined terms branch equivalent tax account: repealed, on , by section 92(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
                                    • Section OB 4 list of defined terms FDP credit: repealed, on , by section 189(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                                    • Section OB 4 list of defined terms notice: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                                    • Section OB 4 list of defined terms policyholder base income tax liability: repealed, on , by section 381(3)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                    • Section OB 4 list of defined terms research and development tax credit: inserted, on , by section 11(2) (and see section 3 for application) of the Taxation (Research and Development Tax Credits) Act 2019 (2019 No 15).
                                    • Section OB 4 list of defined terms schedular income tax liability: inserted, on , by section 381(3)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                    • Section OB 4 list of defined terms schedular policyholder base income: inserted, on , by section 381(3)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).