Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 68: Income tax paid satisfying liability for further income tax

You could also call this:

“Using income tax to pay off extra company tax”

If you are an ICA company and you owe further income tax, you can choose to pay it using regular income tax. To do this, you need to meet some conditions. You must pay the income tax after the end of the tax year when you got the debit balance. Also, you need to pay it for an income year when your company is an ICA company. When you pay the income tax this way, it counts as paying your further income tax. The government sees your further income tax as paid on the day they get your income tax payment.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1518879.

Topics:
Money and consumer rights > Taxes
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OB 67: Reduction of further income tax, or

“How ICA companies can reduce extra income tax owed”

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OB 69: Further income tax paid satisfying liability for income tax, or

“Using extra tax paid to cover income tax or provisional tax bills”

Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 68Income tax paid satisfying liability for further income tax

  1. On meeting the requirements of subsection (2), an ICA company that is liable for further income tax may choose to satisfy the liability through a payment of income tax.

  2. The company must pay the income tax—

  3. after the end of the tax year in which the relevant debit balance arises; and
    1. for an income year corresponding to the tax year in which the company is an ICA company.

      1. The payment of income tax satisfies the company’s liability to pay further income tax.

      2. The further income tax is treated as paid on the date on which the Commissioner receives the payment of income tax.

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