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Income Tax Act 2007

Memorandum accounts - Maori authority credit accounts (MACA)

OK 20: MACA benchmark distribution rules

You could also call this:

“Rules for Māori authorities when distributing money multiple times in a tax year”

When a Maori authority gives out money more than once in a tax year, there are some rules they need to follow. The first time they give out money in the year is called the benchmark distribution. This is important because all the other times they give out money that year, they have to use the same Maori authority credit ratio as they did for the benchmark distribution.

If the Maori authority doesn’t follow this rule, they might have to pay a debt. This debt is calculated using a special formula in section OK 16(1).

However, the Maori authority can tell the Commissioner that they’re not trying to get an unfair tax advantage. They do this by sending a special statement called a ratio change declaration. This statement says that the distribution isn’t part of a plan to get around the tax rules in sections GB 35 and GB 36. They need to send this statement before they give out the money, or later if the Commissioner says it’s okay. If they do this, they might not have to pay the debt mentioned earlier.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519393.

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 20MACA benchmark distribution rules

  1. This section applies when a Maori authority pays a taxable Maori authority distribution on more than 1 occasion during a tax year.

  2. The first distribution of the tax year is the benchmark distribution.

  3. The Maori authority credit ratio of a distribution made after the benchmark distribution must be the same as the Maori authority credit ratio of the benchmark distribution.

  4. A breach of subsection (3) gives rise to a Maori authority debit under section OK 16 (table O18: Maori authority debits, row 8 (breach of Maori authority credit ratio)) for an amount calculated using the formula in section OK 16(1).

  5. A Maori authority may notify the Commissioner that the distribution is not part of an arrangement to obtain a tax advantage by providing a ratio change declaration stating that the distribution is not part of an arrangement to which sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage) apply. The Maori authority must provide the declaration before the distribution is made, or by a later date if the Commissioner allows. For the purposes of this subsection, the distribution must not be part of an arrangement to obtain a tax advantage. This subsection overrides subsection (4).

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