Section OB 62 — Income Tax Act 2007: Retrospective attachment of imputation credits

OB 62 Retrospective attachment of imputation credits When this section applies (1) This section applies in relation to a dividend arising from a transfer pricing arrangement or under subpart FL (Emigration of resident companies) when— (a) an ICA company pays a non-cash dividend whose amount is later adjusted under section GC 7 or GC 8 (which relate to transfer pricing arrangements): (b) an emigrating company that was an ICA company immediately before the time of emigration and is treated under section FL 2 (Treatment of emigrating companies and their shareholders) as paying a distribution to shareholders. Imputation credits attached retrospectively (2) The company may attach retrospectively an imputation credit to the dividend or distribution, as applicable. Limit for ICA company (3) The amount of all imputation credits attached retrospectively by a company referred to in subsection (1)(a) during a tax year must not be more than the lesser of— (a) the credit balance of the company’s imputation credit account at the end of the tax year in which the dividend is paid; or (b) the credit balance of the company’s imputation credit account at the end of each of the tax years in the period that runs from the tax year of payment of the dividend to the tax year in which the credit is attached retrospectively under subsection (1). Limit for emigrating company (4) The amount of all imputation credits attached retrospectively by a company referred to in subsection (1)(b) must be no more than the credit balance of the company’s imputation credit account immediately before the time of emigration. When subsection (6) applies (5) Subsection (6) applies if— (a) a company provides a company dividend statement and issues a shareholder dividend statement for a non-cash dividend at the time it retrospectively attaches an imputation credit; and (b) the adjustment under section GC 7 or GC 8 results in a payment of income tax; and (c) the attachment of the imputation credit would otherwise result in a liability for imputation penalty tax. New credit date (6) The credit date for the imputation credit arising for the payment of the income tax referred to in subsection (5)(b) is the day on which the non-cash dividend is paid, and the company is excused a breach of section 69 of the Tax Administration Act 1994 for not filing a correct annual ICA return through the retrospective attachment of an imputation credit. Statements still required (7) A company that does not meet the requirement of subsection (5)(a) remains liable to— (a) provide a company dividend statement; and (b) issue a shareholder dividend statement for the non-cash dividend and the retrospective attachment of an imputation credit. When subsection (9) applies (8) Subsection (9) applies when an amount of tax paid by an emigrating company is attributable to income derived before the time of emigration or to the application of subpart FL . Amount of tax paid by emigrating company (9) The amount of tax referred to in subsection (8) is treated for the purposes of this subpart as paid immediately before the time of emigration if— (a) the company determines to attach an imputation credit to a dividend; and (b) the imputation credit is not less than the amount of tax; and (c) the company notifies the Commissioner when providing the company dividend statement. Defined in this Act: amount , amount of tax , annual ICA return , arrangement , Commissioner , company dividend statement , dividend , emigrating company , ICA company , imputation credit , imputation credit account , imputation penalty tax , income , income tax , non-cash dividend , notify , pay , shareholder , shareholder dividend statement , tax year , time of emigration , Compare: 2004 No 35 s ME 6