Section LB 8 — Income Tax Act 2007: Tax credits related to personal service rehabilitation payments: payers

LB 8 Tax credits related to personal service rehabilitation payments: payers When this section applies (1) This section applies when— (a) a person 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 (b) the person pays another person (the provider ) for providing the key aspect to them for the period; and (c) the amount paid to the provider is less than the amount of the personal service rehabilitation payment to the person for the period after taking into account any amount of tax withheld. Tax credit (2) The person has a tax credit for the tax year corresponding to the income year in which the period falls to the extent of the amount calculated using the formula— total tax withheld − amount paid × tax rate 1 − tax rate. Definition of items in formula (3) In the formula,— (a) total tax withheld is the total amount of tax withheld from the personal service rehabilitation payment paid to the person for the period: (b) amount paid is the amount paid to the provider: (c) 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 code 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 1C Section LB 8: added, on 1 July 2008, by section 438(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section LB 8(1)(a): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010, No 130). Section LB 8(3)(c): substituted (with effect on 1 July 2008), on 6 October 2009, by section 316(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).