Section OB 2 — Income Tax Act 2007: Australian companies with imputation credit accounts

OB 2 Australian companies with imputation credit accounts Company resident in Australia (1) A company that is resident in Australia may choose to establish and maintain an imputation credit account. Ineligibility (2) Despite meeting the residency requirements, a company is not eligible to make an election referred to in subsection (1) if— (a) the company— (i) is a company referred to in section OB 1(2)(a)(ii) to (iv) , and (b) to (f); or (ii) is treated as resident in a country other than Australia under an agreement between Australia and the other country that would be a double tax agreement if negotiated between New Zealand and that other country; or (b) an earlier election has been revoked by the Commissioner under subsection (7)(b), and the company has not shown the Commissioner that it has taken adequate steps to prevent the grounds of revocation occurring again. Election, and when status starts (3) The election is made by notifying the Commissioner, and the company must maintain an imputation credit account from the following date, as applicable: (a) the first day of the tax year in which the Commissioner is notified: (b) for the purposes of section OB 60 ,— (i) for a company that is formed or becomes eligible in the tax year, the first day of the tax year in which the Commissioner receives the notice and the Commissioner notifies the company of that date; or (ii) if subparagraph (i) does not apply, 30 days after the date on which the Commissioner receives the notice. Joint and several liability (4) A company that is part of the same wholly-owned group of companies as an Australian ICA company may have joint and several liability with the Australian ICA company for further income tax, civil penalties, and interest under Part 7 of the Tax Administration Act 1994 imposed on the Australian ICA company for a breach by the Australian ICA company of the imputation rules. Exclusion (5) Despite subsection (4), no joint and several liability arises if the Australian ICA company is prohibited by an independent regulatory body from being subject to the liability. Dividend in Australian currency (6) An Australian ICA company that pays a dividend in Australian currency must make a currency conversion under section OB 60(6) . How status ends (7) A company ends its status as an Australian ICA company if— (a) the company becomes ineligible to maintain an imputation credit account; or (b) the company revokes the election by notifying the Commissioner; or (c) the Commissioner gives the company notice revoking the election. When status ends (8) For the purposes of subsection (7), the company ends its status as an Australian ICA company— (a) from the day on which the relevant circumstance of ineligibility in subsection (2) applies; or (b) unless paragraph (c) applies, from the last day of the tax year in which the company or the Commissioner revokes the election; or (c) for the purposes of section OB 60 ,— (i) when the company notifies the Commissioner, on the date on which the Commissioner receives the notice; or (ii) on the date set out in the Commissioner’s notice. Outstanding obligations (9) A company that stops being an Australian ICA company for a tax year must nevertheless satisfy all obligations that the company had as an Australian ICA company. Defined in this Act: Australian ICA company , Commissioner , company , dividend , double tax agreement , imputation credit account , imputation rules , income , New Zealand , notice , notify , pay , resident in Australia , tax year , wholly-owned group of companies , Compare: 2004 No 35 s ME 1A Section OB 2(1) heading: substituted (with effect on 1 April 2008), on 6 October 2009, by section 379(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section OB 2(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 379(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section OB 2(2)(a)(i): amended, on 1 April 2008, by section 493(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section OB 2(2)(a)(ii): substituted, on 1 April 2008, by section 493(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section OB 2 list of defined terms resident in New Zealand : repealed (with effect on 1 April 2008), on 6 October 2009, by section 379(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).