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Income Tax Act 2007

Memorandum accounts - Memorandum accounts of consolidated groups - Imputation credits of consolidated imputation groups

OP 24: Consolidated ICA reversal of tax advantage arrangement

You could also call this:

“Fixing unfair tax credits for company groups sharing tax”

When a group of companies share their tax credits, it’s called a consolidated imputation group. Sometimes, these groups might wrongly get extra tax credits by trying to trick the system. This is not allowed.

If someone finds out that a group got extra tax credits unfairly, they need to fix it. The group will get a credit in their account to cancel out the extra tax credit they shouldn’t have had.

This credit is listed in a special table called “imputation credits of consolidated imputation groups”. It’s in row 19 of this table, and it’s called “reversal of tax advantage arrangement”.

The unfair extra credit that’s being fixed is also listed in another table. This table is called “imputation debits of consolidated imputation groups”. It’s in row 20, and it’s called “tax advantage arrangement”.

The date when the group gets the new credit to fix things is the same as the date when the unfair extra credit was first added to their account.

If you want to know more about how the unfair extra credit is removed, you can look at section OP 46.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519459.

Topics:
Money and consumer rights > Taxes
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OP 23: Consolidated ICA elimination of double debit, or

“Removing duplicate tax debits for company groups”

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OP 25: Consolidated ICA non-resident withholding tax withheld, or

“Tax credits for groups with Australian companies paying non-resident withholding tax”

Part O Memorandum accounts
Memorandum accounts of consolidated groups: Imputation credits of consolidated imputation groups

OP 24Consolidated ICA reversal of tax advantage arrangement

  1. This section applies when it is established that an imputation credit in a consolidated imputation group’s imputation credit account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.

  2. The consolidated imputation group has an imputation credit for an amount equal to the amount of a debit in the group’s account under section OP 46.

  3. The imputation credit in subsection (2) is referred to in table O19: imputation credits of consolidated imputation groups, row 19 (reversal of tax advantage arrangement). The imputation debit in subsection (2) is referred to in table O20: imputation debits of consolidated imputation groups, row 20 (tax advantage arrangement).

  4. The credit date is the same as the debit date for the debit.

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