Section LB 7 — Income Tax Act 2007: Tax credits related to personal service rehabilitation payments: providers

LB 7 Tax credits related to personal service rehabilitation payments: providers When this section applies (1) This section applies when— (a) a person— (i) is paid under the Accident Compensation Act 2001 a personal service rehabilitation payment for a period for a key aspect of social rehabilitation referred to in the definition of personal service rehabilitation payment ; and (ii) pays another person (a provider ) for providing the key aspect to them for the period; or (b) the Accident Compensation Corporation pays a provider a personal service rehabilitation payment for a period for providing a key aspect of social rehabilitation to the person. Tax credit (2) The provider has a tax credit for the tax year corresponding to the income year in which the period falls. Amount (3) The amount of the tax credit is calculated using the formula— amount paid × tax rate 1 − tax rate. Definition of items in formula (4) In the formula,— (a) amount paid is the amount paid to the provider for providing a key aspect of social rehabilitation to the person for the period, to the extent to which the amount is equal to or less than the amount of the personal service rehabilitation payment for the period after taking into account any amount of tax withheld: (b) tax rate is the rate of tax applying to the personal service rehabilitation payment under schedule 4, part I, clause 1 (Rates of tax for schedular payments) unless the payment is 1 of the following kinds, in which case the rate of tax is that set out in the subparagraph: (i) for a payment to which section RD 18 (Schedular payments without notification) applies, the rate under schedule 4, part I, clause 1 together with any additional amount required to be withheld under section RD 18, determined using the rates set out in that section: (ii) for a payment to which a special tax rate certificate applies, the rate applying to the payment as determined by the Commissioner under section 24N of the Tax Administration Act 1994. Defined in this Act: amount , amount of tax , income year , pay , personal service rehabilitation payment , tax credit , tax year Compare: 2004 No 35 s LD 1B Section LB 7: added, on 1 July 2008, by section 438(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section LB 7(1)(a)(i): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010, No 130). Section LB 7(4)(b): substituted (with effect on 1 July 2008), on 6 October 2009, by section 315(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).