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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 65: Further income tax for ICA closing debit balance

You could also call this:

“Extra tax payable for negative balance in company's imputation credit account”

If you’re a company with an imputation credit account (ICA), you need to know about a special tax rule. At the end of each tax year, if your ICA has a negative balance (called a debit balance), you have to pay extra tax. This extra tax is called ‘further income tax’.

There’s one exception to this rule. If the negative balance in your ICA comes from transferring money from a member fund, you don’t have to count that when figuring out if you owe further income tax.

If you do owe further income tax, you must pay it to the Commissioner of Inland Revenue. The deadline for this payment is 20 June after the end of the tax year.

Remember, this rule applies to companies with imputation credit accounts. If you’re not sure what that means or if it applies to you, you might want to ask an adult or a tax expert for help.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518870.

Topics:
Money and consumer rights > Taxes
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“How to add imputation credits to replacement payments when borrowing shares”

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OB 66: Further income tax when company stops being ICA company, or

“Extra tax for companies ending their ICA status”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 65Further income tax for ICA closing debit balance

  1. An ICA company is liable to pay further income tax for a debit balance in the company’s imputation credit account at the end of a tax year.

  2. An imputation debit arising under section OB 46 (table O2: imputation debits, row 19 (transfer from member fund)) is disregarded when determining under subsection (1) if the company has a debit balance at the end of a tax year.

  3. The company must pay the further income tax to the Commissioner no later than 20 June following the end of the tax year.

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