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Income Tax Act 2007

Memorandum accounts - Maori authority credit accounts (MACA)

OK 19: Maori authority credits attached to distributions

You could also call this:

“Māori authorities can add tax credits to their distributions”

When a Maori authority gives out money or goods that can be taxed, they can add a Maori authority credit to it. This credit is like a special bonus that comes with the distribution.

To figure out how much credit to add, you need to use a special math formula. You divide the credit amount by the distribution amount (not counting the credit). This gives you the credit ratio.

There’s a limit to how much credit a Maori authority can add. They can’t add more than what’s allowed by the rules in section OA 18(2).

If a Maori authority is also a co-operative company, they can add a credit to something called a “notional distribution”. This works a bit like how companies add credits to their distributions, but with some special rules for Maori authorities.

Sometimes, a Maori authority might need to add a credit to a distribution after it’s already been given out. They can do this if the amount of the distribution changes because of certain tax rules about how businesses work with each other.

When a Maori authority adds a credit after the distribution has been given out, they follow similar rules to what companies do when they add credits late. But instead of talking about company accounts and credits, they use Maori authority accounts and credits.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519387.

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 19Maori authority credits attached to distributions

  1. When a Maori authority makes a taxable Maori authority distribution, it may attach a Maori authority credit to the distribution.

  2. A distribution referred to in subsection (1) must have a Maori authority credit ratio calculated using the formula—

    credit attached ÷ net distribution.

    Where:

    • In the formula,—

    • credit attached is the amount of Maori authority credit attached to the distribution:
      1. net distribution is the amount of distribution made, excluding the amount of Maori authority credit.

        1. A Maori authority credit attached to a distribution must not be more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).

        2. A Maori authority that is also a co-operative company may attach a Maori authority credit to a notional distribution. The provisions of section OB 79 (Co-operative companies attaching imputation credits to notional distributions) apply to the notional distribution as if references in that section to—

        3. an imputation credit were a reference to a Maori authority credit; and
          1. an imputation credit account were a reference to a Maori authority credit account.

            1. A Maori authority may retrospectively attach a Maori authority credit to a taxable Maori authority distribution arising from an adjustment, under section GC 7 or GC 8 (which relate to transfer pricing arrangements), of the amount of a distribution that would have been a non-cash dividend if made by a company.

            2. The provisions of section OB 62 (Retrospective attachment of imputation credits) apply to a distribution referred to in subsection (6) as if a reference in that section to—

            3. an ICA company were a reference to the Maori authority; and
              1. an imputation credit were a reference to a Maori authority credit; and
                1. an imputation credit account were a reference to a Maori authority credit account.

                  Compare
                  Notes
                  • Section OK 19(6): amended (with effect on 1 April 2008), on , by section 168(1) (and see section 168(5) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                  • Section OK 19(7): amended (with effect on 1 April 2008), on , by section 168(2) (and see section 168(5) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                  • Section OK 19(7)(aa): inserted (with effect on 1 April 2008), on , by section 168(3) (and see section 168(5) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                  • Section OK 19 list of defined terms ICA company: inserted (with effect on 1 April 2008), on , by section 168(4) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                  • Section OK 19 list of defined terms non-cash dividend: inserted (with effect on 1 April 2008), on , by section 168(4) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).