RE 16Taxable Maori authority distributions

1. This section applies when a Maori authority makes a payment of resident passive income that consists of a taxable Maori authority distribution in the form of a sum of money or an amount of a credit in the balance of an account with the Maori authority.

2. The amount of tax for the payment that the Maori authority must withhold and pay to the Commissioner is calculated using the formula—

   $(tax\; rate\; \times \; (distribution\; amount\; +\; credit\; attached))\; -\; credit\; attached.$

   Where:

3. Despite subsection (2), if the resident passive income is not paid in cash, the amount of tax for the payment that the Maori authority must pay to the Commissioner is calculated using the formula—

   $(tax\; rate\; \times \; distribution\; amount\; ÷\; (1\; -\; tax\; rate))\; -\; credit\; attached.$

   Where:

4. In the formulas in subsections (2) and (3),—

5. tax rate is the basic rate set out in schedule 1, part D, clause 6 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits):
6. distribution amount is the amount of the distribution before the amount of tax is determined:
7. credit attached is the amount of the Maori authority credit attached to the distribution.