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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 32: ICA refund of tax or transfer from account

You could also call this:

“Debit for tax refunds or transfers from an imputation credit account”

When you’re an ICA company, you get an imputation debit for the amount of income tax refunded to you or for tax transferred to another account. This doesn’t include refunds for periods when you weren’t an ICA company or refunds for life insurers’ schedular policyholder base income. It also doesn’t include refunds linked to specific debits in some cases.

If you’re only an ICA company for part of a tax year, the debit is calculated using a formula. You multiply the refund amount by the number of days you were an ICA company, then divide by 365.

The debit date for a refund is when the refund is made. For transferred tax, the debit date depends on when you requested the transfer and the status of your ICA.

This rule doesn’t apply to amounts that cause a debit under section OB 37.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518766.

Topics:
Money and consumer rights > Taxes
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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”

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OB 33: ICA amount applied to pay other taxes, or

“Using overpaid income tax to pay other taxes”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 32ICA refund of tax or transfer from account

  1. An ICA company has an imputation debit for the amount of a refund of income tax paid to the company or the amount of a transfer of excess income tax or excess provisional tax under section 173L or 173M of the Tax Administration Act 1994 or section RC 32(5)(b) (Wholly-owned groups of companies). Subsection (2) overrides this subsection.

  2. A debit under subsection (1) does not include—

  3. a refund of income tax paid for a period when the company was not an ICA company; or
    1. a refund of income tax paid by a life insurer to satisfy its schedular income tax liability for schedular policyholder base income; or
      1. a refund of income tax paid before a debit arises under section OB 41, but only to the extent to which the amount of the refund is less than or equal to the amount of the debit; or
        1. a refund under subpart LP (Tax credits for supplementary dividends) because the supplementary dividend generating the refund was paid before a debit arises under section OB 41, but only to the extent to which the amount of the refund is less than the amount of the debit.

          1. The table references are as follows:

          2. the imputation debit in subsection (1) is referred to in table O2: imputation debits, row 4 (refund of income tax), row 4B (transfer from ICA under section 173L or 173M of the Tax Administration Act 1994 or section RC 32(5)(b)), row 4C (transfer from ICA under section 173L or 173M of the Tax Administration Act 1994 or section RC 32(5)(b)), or row 4D (transfer from ICA under section 173L or 173M of the Tax Administration Act 1994 or section RC 32(5)(b)):
            1. the imputation debit in subsection (2)(b) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity):
              1. the imputation debit in subsection (2)(c) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity).

                1. The amount of the debit that arises from a refund of income tax if the company is an ICA company for only part of a tax year is an amount calculated using the formula—

                  (ICA days ÷ 365) × refund.

                  Where:

                  • In the formula,—

                  • ICA days is the number of days in which the company is an ICA company:
                    1. refund is the amount of the refund.

                      1. The debit date for—

                      2. a refund of income tax is the day the refund is made; or
                        1. an amount of excess tax transferred in a tax year (the transfer year) to another period or tax type of the ICA company on a date under section 173L of the Tax Administration Act 1994, or to another ICA company on a date under section 173M of that Act or section RC 32(5)(b), is—
                          1. despite section 173L(2)(a) to (bb) of the Tax Administration Act 1994, 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 the Tax Administration Act 1994, 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, 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. This section does not apply to an amount that gives rise to a debit under section OB 37.

                              Compare
                              Notes
                              • Section OB 32 heading: replaced, on , by section 138(1) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                              • Section OB 32(1): amended, on , by section 138(2) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                              • Section OB 32(2)(ab): inserted, on , by section 388(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                              • Section OB 32(2)(b): amended (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 97(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
                              • Section OB 32(3)(a): amended, on , by section 138(3) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                              • Section OB 32(4): amended, on , by section 138(4) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                              • Section OB 32(6): replaced, on , by section 138(5) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                              • Section OB 32(7) heading: added (with effect on 1 April 2008), on , by section 388(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                              • Section OB 32(7): added (with effect on 1 April 2008), on , by section 388(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                              • Section OB 32 list of defined terms life insurer: inserted, on , by section 388(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                              • Section OB 32 list of defined terms schedular income tax liability: inserted, on , by section 388(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                              • Section OB 32 list of defined terms schedular policyholder base income: inserted, on , by section 388(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).