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Income Tax Act 2007

General collection rules - Refunds - ICA companies

RM 16: Treatment of amounts not refunded

You could also call this:

“How extra tax payments are handled when they can't be refunded”

If you’re part of a company that has paid too much income tax, sometimes the extra money can’t be given back to you or moved to another company you own. When this happens, here’s what you need to know:

The extra money that can’t be refunded or transferred will be used to pay off any income tax or provisional tax your company owes for that same tax year. If there’s still money left over, you can use it to pay off tax for other tax years.

If you don’t need the money to pay off any tax, the extra amount will stay in your company’s account with the tax office. This might happen if your company closes down or for other reasons.

Even though the money usually stays in your account, sometimes it can be used to pay for provisional tax on a specific date. This can happen if the Tax Administration Act 1994 says you need to pay residual income tax on a certain date.

There’s a special rule in Section RZ 6 that might change how long the money can stay in your account. This rule is about limits on refunds during certain time periods.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520447.

Topics:

Money and consumer rights > Taxes

RM 15: Changes in credit balances, or

“How refunds and shareholder changes affect your tax credit balance”

RM 17: Treatment of further income tax paid, or

“How paying extra company tax affects future refunds”

Part R General collection rules
Refunds: ICA companies

RM 16Treatment of amounts not refunded

This section applies when, through the application of sections RM 13 and RM 14, an overpayment of income tax by a company is not refunded to the company or transferred within a wholly-owned group of companies.
The amount prevented from being a refund or transfer—
is applied to satisfy an income tax or provisional tax liability of the company for the tax year of the entitlement; and
may be used by the company to satisfy an income tax or provisional tax liability for a tax year other than the tax year of entitlement; and
is retained in the company’s tax account with the Commissioner to the extent to which paragraphs (a) and (b) do not apply, whether because the company is liquidated or for another reason.

Despite subsection (2), the amount may be credited on a provisional tax instalment date if residual income tax is treated under the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.
Section RZ 6 (Limits on refunds: transitional dates) overrides subsection (2)(c).

Compare

2004 No 35 s MD 2(5), (5A)

Notes

Section RM 16(3): amended (with effect on 1 April 2008), on 18 March 2019, by section 267(1) (and see section 267(2) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).