Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 30: ICA payment of dividend

You could also call this:

“Imputation debit when a company pays a dividend with an attached imputation credit”

When you’re part of an ICA company, you need to know about imputation debits. These happen when your company pays a dividend with an imputation credit attached to it. The amount of the imputation credit becomes an imputation debit for your company.

You can find this imputation debit listed in a special table called ‘table O2: imputation debits’. It’s in row 2, which is labelled ‘payment of dividend’.

The date of the debit is important. It’s recorded on the same day that you pay out the dividend.

Sometimes, there’s a special rule that might apply. It’s called Section GB 37, and it’s about ‘Arrangements for payment of dividend by other companies’. This rule might make an amount count as a debit under this section, even if it wouldn’t normally.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518762.

Topics:
Money and consumer rights > Taxes
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OB 29: ICA payment of schedular income tax, or

“Credit for tax paid on specific income by Australian companies”

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OB 31: ICA allocation of provisional tax, or

“Sharing provisional tax with another company creates a debit in your imputation credit account”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 30ICA payment of dividend

  1. An ICA company has an imputation debit for the amount of an imputation credit attached to a dividend paid by the company.

  2. The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 2 (payment of dividend).

  3. The debit date is the day the dividend is paid.

  4. Section GB 37 (Arrangements for payment of dividend by other companies) may apply to treat an amount as a debit under this section.

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