Section LB 1 — Income Tax Act 2007: Tax credits for PAYE income payments

LB 1 Tax credits for PAYE income payments When this section applies (1) This section applies in a tax year when an employer provides the Commissioner with an employer monthly schedule that shows an amount of tax withheld from a PAYE income payment of a person who is an employee. Amount of credit (2) The person has a tax credit for the tax year equal to the amount of tax shown as withheld. Application to close companies (3) Despite subsection (2), the amount of the tax credit must be no more than the amount of tax paid to the Commissioner if— (a) the employer is a close company; and (b) the employer and the person are associated persons, or the employer and the spouse, civil union partner, or de facto partner of the person are associated persons; and (c) the employer withheld the amount of tax for the PAYE income payment shown in the employer monthly schedule. Exclusions (4) The person's credit is extinguished if the Commissioner does not receive an employer monthly schedule for the relevant amount of tax, or when the relevant particulars of the schedule are incorrect. However, the credit is restored to the person if the relevant matter is corrected and, for the purposes of this section, it is as if the error had not been made. Defined in this Act: amount , amount of tax , associated person , close company , Commissioner , employee , employer , employer monthly schedule , pay , PAYE income payment , tax credit , Section LB 1: substituted (with effect on 1 April 2008), on 6 October 2009, by section 312 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).