Section LK 1 — Income Tax Act 2007: Tax credits relating to attributed CFC income

LK 1 Tax credits relating to attributed CFC income Amount of credit (1) A person who has an amount of attributed CFC income for an income year has a tax credit for the tax year corresponding to the income year equal to the following amounts paid or payable in relation to the attributed CFC income: (a) an amount of income tax paid by the CFC from which the income is derived: (b) an amount of tax withheld and paid on behalf of the CFC from which the income is derived: (c) the amount of foreign income tax paid by the CFC from which the income is derived: (d) the amount of foreign income tax paid by the person under legislation of another country or territory that is the equivalent of the international tax rules. Amount adjusted (2) The amount of the person’s credit in subsection (1) may be reduced or increased if section LK 7 applies. Limitation to quarantined amount (3) The person’s use under section LA 2 (Satisfaction of income tax liability) of a credit referred to in subsection (1) is limited to the amount (the quarantined amount ) that would be their income tax liability for the tax year if their only assessable income were attributed CFC income derived from a CFC resident in the foreign country or territory referred to in subsection (1) in the accounting period in which the amount of tax giving rise to the credit was paid or payable. Tax withheld (4) In subsection (1), a payment of income tax or foreign income tax by the CFC includes a payment of an amount of tax withheld from income. When subsection (7) applies (5) Subsection (7) applies when— (a) a person has a credit under subsection (1) in relation to an amount of income tax or foreign income tax; and (b) the credit has been used under section LA 2 (Satisfaction of income tax liability) or is carried forward under section LK 4 ; and (c) the person has received a refund, amount, or benefit (the refund ) determined directly or indirectly by reference to some or all of the tax paid. When refund received before assessment (6) If the person receives the refund before they assess their income tax liability for a tax year, the amount of tax credit for the tax paid is reduced by the lesser of— (a) the amount of the refund: (b) the amount of New Zealand tax payable on the foreign-sourced income calculated under section LJ 5 (Calculation of New Zealand tax). Credit repayable or extinguished (7) The amount of the credit— (a) must be paid to the Commissioner if it has been used under section LA 2 : (b) is extinguished, if it is carried forward under section LK 4 . Date for payment (8) In subsection (7)(a), the date for payment is 30 days after the later of— (a) the date on which the person who paid the tax receives the refund: (b) the date of the notice of assessment in relation to which the person has used the credit. Associated persons (9) For the purposes of subsections (5) to (8), the refund is treated as received by the person, whether it is received by the person, a person who paid the foreign income tax, or a person associated with either of them. Defined in this Act: accounting period , amount , amount of tax , assessable income , assessment , associated person , attributed CFC income , CFC , Commissioner , controlled foreign company , corresponding income year , foreign income tax , income tax , income tax liability , income year , international tax rules , New Zealand tax , notice , NRWT , pay , quarantined amount , segment of foreign-sourced income , tax credit , tax withheld , tax year , Compare: 2004 No 35 s LC 4(1), (4) Section LK 1(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 340(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(3): amended (with effect on 30 June 2009), on 6 October 2009, by section 340(2)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(3): amended (with effect on 30 June 2009), on 6 October 2009, by section 340(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(5) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(5): added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(6) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(6): added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(7) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(7): added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(8) heading: substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 104(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section LK 1(8): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 104(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section LK 1(9) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1(9): added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms assessment : inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms associated person : inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms Commissioner : inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms conduit tax relief : repealed (with effect on 30 June 2009), on 6 October 2009, by section 340(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms CTR company : repealed (with effect on 30 June 2009), on 6 October 2009, by section 340(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms international tax rules : inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms New Zealand tax : inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms notice : inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms NRWT : inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section LK 1 list of defined terms segment of foreign-sourced income : inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).