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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 33: ICA amount applied to pay other taxes

You could also call this:

“Using overpaid income tax to pay other taxes”

When an ICA company uses money from overpaid income tax to pay other taxes, it gets an imputation debit. This debit happens in two ways:

  1. If the company uses overpaid income tax to pay any amount owed under the Inland Revenue Acts.

  2. If the company uses extra money from a tax pooling account to pay any amount owed under the Inland Revenue Acts, except for income tax.

This debit is listed in a special table called ‘table O2: imputation debits’ under row 5.

There are some cases where this debit doesn’t apply. It doesn’t include overpaid income tax used to pay income tax or provisional tax. It also doesn’t include overpaid income tax related to a special situation called ‘loss of shareholder continuity’, but only up to the amount of that loss.

The date of the debit is the day when the money is used to pay the other taxes.

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=DLM1518772.

Topics:
Money and consumer rights > Taxes
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OB 32: ICA refund of tax or transfer from account, or

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

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OB 34: ICA refund from tax pooling account, or

“Recording a company's tax refund from a pooling account”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 33ICA amount applied to pay other taxes

  1. An ICA company has an imputation debit for—

  2. an amount of overpaid income tax applied to pay an amount due under the Inland Revenue Acts:
    1. an increased amount of tax as described in section RP 17B(3) (Tax pooling accounts and their use) applied to pay an amount due under the Inland Revenue Acts other than income tax.

      1. The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 5 (amount applied to pay other taxes).

      2. A debit under subsection (1) does not include an amount of overpaid income tax—

      3. applied to satisfy a liability for income tax or provisional tax; or
        1. relating to income tax paid before an imputation debit arises under section OB 41 (table O2: imputation debits, row 14 (debit for loss of shareholder continuity)), but only to the extent to which the amount of overpaid income tax is no more than the amount of the debit for loss of shareholder continuity.

          1. The debit date is the day the amount is applied.

          2. This section does not apply to an amount that gives rise to a debit under section OB 37.

          Compare
          Notes
          • Section OB 33(1): substituted, on , by section 389(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
          • Section OB 33(5) heading: added (with effect on 1 April 2008), on , by section 389(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
          • Section OB 33(5): added (with effect on 1 April 2008), on , by section 389(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).