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Income Tax Act 2007

Memorandum accounts - Memorandum accounts of consolidated groups - Introductory provisions

OP 6: Provisions applying to consolidated imputation groups

You could also call this:

“Rules for treating company groups as one for certain tax matters”

This law explains how certain rules apply to consolidated imputation groups for tax purposes in New Zealand. Here’s what you need to know:

When a group of companies forms a consolidated imputation group, they’re treated as if they were one big company for some tax rules. This affects how they handle things like dividends, extra income tax, and penalties.

The law lists specific sections that apply to these groups. These cover things like dividend rules, additional taxes, and penalties. When dealing with these issues, the group is treated as one company, and all the companies in the group share responsibility for any taxes or penalties.

There are some special rules about tax refunds for these groups. Generally, the refund limits that apply to a single company also apply to the whole group. However, there’s an exception that allows individual companies in the group to get refunds in some cases.

If a company in the group wants a refund for overpaid income tax, they need to tell the tax department themselves. When this happens, the refund rules look at the group’s imputation credit account as if it belonged to that company.

Remember, this is a simplified explanation of a complex law. If you need to use these rules, it’s a good idea to ask a tax expert for help.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519422.

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Money and consumer rights > Taxes
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“Rules for group-level tax credits and debits in consolidated imputation groups”

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Part O Memorandum accounts
Memorandum accounts of consolidated groups: Introductory provisions

OP 6Provisions applying to consolidated imputation groups

  1. The provisions listed in subsection (2) apply, modified as necessary, to a consolidated imputation group and to the imputation credit account of the group as if—

  2. the group were a single company; and
    1. a reference to a company’s liability for further income tax, late payment penalty, or imputation penalty tax were a reference to a joint and several liability owed by group companies when the tax or penalty becomes payable.

      1. The provisions are—

      2. section OB 61 (ICA benchmark dividend rules); and
        1. sections OB 65 and OB 66 (which relate to further income tax); and
          1. sections OB 71 and OB 72 (which relate to imputation additional tax); and
            1. sections 97, 101, 139B, 140B, 140D, and 180 of the Tax Administration Act 1994.

              1. Sections FM 4 and FM 5 (which relate to the liabilities of group companies) override subsection (1)(b).

              2. Sections GB 35 and GB 36 (which relate to tax advantage arrangements), LE 1(5) (Tax credits for imputation credits), OA 2(5) (Memorandum accounts), and sections 90AF and 104B of the Tax Administration Act 1994 apply, modified as necessary, in a case that involves accounts of a consolidated imputation group as if—

              3. the group were a single company; and
                1. references to the provisions of this Act or the Tax Administration Act 1994 were references to the equivalent provisions applicable to the equivalent accounts.

                  1. Sections RM 13 to RM 17, RM 32, and RZ 6 (which relate to limits on refunds) apply, modified as necessary, in relation to income tax paid by a consolidated imputation group as if—

                  2. the group were a single company; and
                    1. a reference to that company when it stops being an ICA company were a reference to the consolidated group when it stops being a consolidated imputation group; and
                      1. references to the provisions of this Act or the Tax Administration Act 1994 were references to the equivalent provisions applicable to the equivalent accounts.

                        1. Despite subsection (5), sections RM 13 to RM 17, RM 32, and RZ 6 do not apply to limit a refund payable to a company that is part of a consolidated imputation group in relation to income tax paid individually by the company to the extent to which those sections would not have limited the refund if it had been a refund payable to the group in relation to income tax paid by the group. However, if an amount is refunded and would not have been payable but for this subsection, section RM 15(1) (Changes in credit balances) applies as if the refund were made in relation to income tax paid by the group.

                        2. If a company that is part of an imputation group is entitled to a refund under section RM 2, RM 4, or RM 5 (which relate to refunds for overpaid income tax), the company must apply for a refund by notifying the Commissioner. Sections RM 13 to RM 17, RM 32, and RZ 6 apply to the entitlement as if—

                        3. the imputation credit account of the group were the imputation credit account of the company:
                          1. a credit in the imputation credit account for the purposes of those sections were reduced by the amount of a refund to a company that is part of the group.

                            Compare
                            Notes
                            • Section OP 6(2)(a): substituted (with effect on 1 April 2008), on , by section 446(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(2)(ab): inserted (with effect on 1 April 2008), on , by section 446(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(2)(ac): inserted (with effect on 1 April 2008), on , by section 446(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(4) heading: added (with effect on 1 April 2008), on , by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(4): added (with effect on 1 April 2008), on , by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(5) heading: added (with effect on 1 April 2008), on , by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(5): added (with effect on 1 April 2008), on , by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(6) heading: added (with effect on 1 April 2008), on , by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(6): added (with effect on 1 April 2008), on , by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(7) heading: added (with effect on 1 April 2008), on , by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(7): added (with effect on 1 April 2008), on , by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6(7): amended (with effect on 1 April 2013), on , by section 83 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                            • Section OP 6 list of defined terms apply: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                            • Section OP 6 list of defined terms Commissioner: inserted (with effect on 1 April 2008), on , by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6 list of defined terms consolidated group: inserted (with effect on 1 April 2008), on , by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6 list of defined terms ICA company: inserted (with effect on 1 April 2008), on , by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6 list of defined terms imputation additional tax: inserted (with effect on 1 April 2008), on , by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6 list of defined terms imputation group: inserted (with effect on 1 April 2008), on , by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6 list of defined terms income tax: inserted (with effect on 1 April 2008), on , by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6 list of defined terms notify: inserted (with effect on 1 April 2008), on , by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                            • Section OP 6 list of defined terms tax: added (with effect on 1 April 2008), on , by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).