Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 25: ICA reversal of tax advantage arrangement

You could also call this:

“Fixing an incorrect tax advantage in your imputation credit account”

If you’re an ICA company, this is about fixing a mistake in your imputation credit account. Sometimes, people might try to get a tax advantage they shouldn’t have. If this happens with your company’s imputation credits, and it’s found out, you need to correct it.

When this happens, you get an imputation credit in your account. This credit is the same amount as the debit that was put in your account under section OB 54. This is to balance things out and make sure everything is fair.

In the official records, this credit is listed in a special table called “table O1: imputation credits”. It’s in row 23, which is called “reversal of tax advantage arrangement”. The debit that it’s fixing is listed in another table called “table O2: imputation debits”. You can find that in row 27, which is called “tax advantage arrangement”.

The date of this new credit is the same as the date of the debit that was put in under section OB 54. This helps keep everything lined up properly in your accounts.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518751.

Topics:
Money and consumer rights > Taxes
Previous

OB 24: ICA credit on resident’s restricted amalgamation, or

“Tax credit for companies combining in a special way”

Next

OB 26: ICA elimination of double debit, or

“Replacing tax credits lost due to shareholder changes”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 25ICA reversal of tax advantage arrangement

  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.

  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.

  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).

  4. The credit date is the same as the debit date of the debit under section OB 54.

Compare