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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

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

You could also call this:

“Extra tax for companies ending their ICA status”

If you’re an ICA company, you need to pay extra income tax when you stop being one. This happens if your imputation credit account has a debit balance when you stop being an ICA company.

You have to pay this extra tax to the Commissioner by the day you stop being an ICA company. But if you stop being an ICA company because you become a portfolio investment entity, you have until the end of the tax year to pay.

If you stop being an ICA company on the last day of the tax year, you have to pay the extra tax under this rule, not under section OB 65.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518872.

Topics:
Money and consumer rights > Taxes
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OB 65: Further income tax for ICA closing debit balance, or

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

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OB 67: Reduction of further income tax, or

“How ICA companies can reduce extra income tax owed”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 66Further income tax when company stops being ICA company

  1. An ICA company is liable to pay further income tax for a debit balance in the company’s imputation credit account when the company stops being an ICA company.

  2. The company must pay the further income tax to the Commissioner—

  3. by the day the company stops being an ICA company; or
    1. for a company that is no longer an ICA company because it becomes a portfolio investment entity, by the end of the tax year in which it stops being an ICA company.

      1. A company that stops being an ICA company on the last day of a tax year is liable to pay further income tax under this section and not under section OB 65.

      Compare
      Notes
      • Section OB 66(2): substituted, on , by section 499(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
      • Section OB 66 list of defined terms portfolio investment entity: inserted, on , by section 499(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).