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Income Tax Act 2007

Memorandum accounts - Imputation credit accounts (ICA)

OB 47B: Tax paid by recipients of R&D loss tax credits

You could also call this:

“Tax repayment for companies receiving R&D loss tax credits”

If you own a company that pays income tax in New Zealand, this law might affect you if your company got a special tax credit called an R&D loss tax credit. This credit is for companies that do research and development.

The law says that if your company got this credit, you might have to pay some tax back. This happens through something called an imputation debit. An imputation debit is like a charge against your company’s tax account.

The amount of this debit is the smaller of two things:

  1. The tax credit your company got for the current year.
  2. The total of all your R&D loss tax credits from past years up to now, minus any imputation debits you’ve already had for those credits.

This debit happens on the last day of your company’s tax year. It’s recorded in a special table that keeps track of these debits.

Remember, this only applies if your company hasn’t already had to pay back the R&D loss tax credit under section MX 7.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6772691.

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Part O Memorandum accounts
Imputation credit accounts (ICA)

OB 47BTax paid by recipients of R&D loss tax credits

  1. This section applies for an ICA company and a tax year (the current year) when the company has an R&D loss tax credit under section MX 4 (R&D loss tax credits) for the current year, or an earlier tax year, that does not give rise to R&D repayment tax under section MX 7 (Reinstatement of R&D tax losses and R&D repayment tax) before or in the income year corresponding to the current year.

  2. The ICA company has an imputation debit for the current year equal to the lesser of the following:

  3. the imputation credit that the company has for the current year under section OB 4:
    1. the total amount of the company’s R&D loss tax credits, for the period that begins with the earliest tax year to which the tax credits relate and ends with the current year, minus the total amount of imputation debits under this section for tax years that are in that period and end before the current year.

      1. The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 20B (recipients of R&D loss tax credits).

      2. The debit date is the last day of the current year.

      Notes
      • Section OB 47B: inserted (with effect on 1 April 2015 and applying for income years beginning on or after that date), on , by section 215(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
      • Section OB 47B(1): amended, on (with effect on 1 April 2015), by section 170 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).