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Income Tax Act 2007

Memorandum accounts - Maori authority credit accounts (MACA)

OK 16: MACA breach of Maori authority credit ratio

You could also call this:

“Penalty for not attaching enough credits to Māori authority distributions”

You may get a Maori authority debit if you break the rules about Maori authority credit ratio in a tax year. This happens when you don’t attach enough credits to the distributions you make.

To figure out if you’ve broken the rules, you need to do a calculation. First, you look at all the taxable distributions you’ve made during the year, not counting the credits attached. Then, you multiply this by the highest credit ratio you’re allowed to use. From this, you subtract the actual credits you attached to your distributions.

The credit ratio you use in the calculation is either the maximum allowed by law, or the highest ratio you actually used in your distributions that year, whichever is lower.

If this calculation shows you didn’t attach enough credits, you’ll get a debit. But, you won’t get a debit if you tell the tax department about a change in your ratio.

This debit is listed in a special table of Maori authority debits. It’s counted on the last day of the tax year.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519376.

Topics:
Money and consumer rights > Taxes
Māori affairs > Treaty of Waitangi
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Part O Memorandum accounts
Maori authority credit accounts (MACA)

OK 16MACA breach of Maori authority credit ratio

  1. A Maori authority has a Maori authority debit for a breach in a tax year of the Maori authority credit ratio under section OK 20(3) for an amount calculated using the formula—

    (net distributions × Maori authority credit ratio) − credits attached.

    Where:

    • In the formula,—

    • net distributions is the total amount of all taxable Maori authority distributions made by the Maori authority during the tax year, excluding the amount of Maori authority credits attached to the distributions:
      1. Maori authority credit ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios) or, if less, the greatest Maori authority credit ratio of all taxable Maori authority distributions made by the Maori authority during the tax year:
        1. credits attached is the total amount of all Maori authority credits attached to distributions paid by the Maori authority during the tax year.

          1. A debit under subsection (1) does not arise if the Maori authority provides a ratio change declaration under section OK 20(5).

          2. The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 8 (breach of Maori authority credit ratio).

          3. The debit date is the last day of the tax year.

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