Section OB 72 — Income Tax Act 2007: Imputation additional tax on joining wholly-owned group

OB 72 Imputation additional tax on joining wholly-owned group Liability (1) An ICA company to which subsection (2) applies may be liable for imputation additional tax under— (a) subsection (3) as the company’s first liability under this section: (b) subsection (5) as the company’s second liability under this section. Liable company (2) The company is 1 to which all of the following apply: (a) the company is or was recently part of a wholly-owned group of companies (the former group ); and (b) the company has or will soon join a different wholly-owned group of companies (the new group ); and (c) the former group has a loss balance carried forward from an earlier tax year of more than $1,000,000 for the tax year before the income year corresponding to the tax year in which the company changes groups. First liability (3) The company is liable for imputation additional tax if, at a particular time,— (a) a debit balance exists in the company’s imputation credit account; and (b) an imputation debit arose when the company was part of the former group; and (c) the imputation additional tax liability of the company has not been paid under section OB 71 by the company or another company in the former group. Amount of liability (4) The amount of the imputation additional tax liability under subsection (3) is equal to the amount of the imputation debit at the time the company becomes part of the new group. Second liability (5) The company is liable for an amount of imputation additional tax, equal to the excess entitlement determined under subsection (6), if a group of people hold common voting interests in the new group that exceed by 67% or more the common voting interests in the former group that are held by the same people immediately before the company joins the new group. Possible liability under section OB 72B (5B) The company is liable for an amount of imputation additional tax given by section OB 72B(8) if the requirements of that provision are met. Excess entitlement (6) The company’s excess entitlement at a particular time is 1 of the following amounts: (a) zero, if the credit balance of the company's imputation credit account at the time is equal to or more than the amount (the total refundable amount ) that is the total of the following: (i) the amount in the tax pooling account provided by or for the benefit of the company that is more than the company's liability to pay income tax or provisional tax at the time: (ii) the amount of the refund to which the company is entitled under sections RM 2 and RM 4 to RM 6 (which relate to refunds of excess tax), other than an amount affected by a restriction under section OB 72B(5) ; or (b) the total refundable amount, if there is no credit balance in the company's imputation credit account at the time; or (c) the excess of the total refundable amount over the credit balance in the company's imputation credit account at the time, if paragraph (b) does not apply. Due date (7) The imputation additional tax must be paid to the Commissioner no later than the 20th day of the month following the month in which the company stops being part of the former group. Joint liability (8) The company and all companies in the new group are jointly liable for the imputation additional tax. A payment of imputation additional tax does not satisfy any other liability of the company or the new group. Payment by excess tax (9) For a liability under subsections (3) and (5), the company or another company in the new group may choose to satisfy the liability by applying an excess tax payment in discharging it. Defined in this Act: amount , Commissioner , company , excess tax payment , ICA company , imputation additional tax , imputation credit account , imputation debit , income tax liability , income year , pay , provisional tax , tax loss , tax pooling account , tax year , wholly-owned group of companies , Compare: 2004 No 35 s ME 9C Section OB 72(1)(a): amended (with effect on 1 March 2010), on 7 September 2010, by section 101(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section OB 72(5): substituted (with effect on 1 March 2010), on 7 September 2010, by section 101(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section OB 72(5B) heading: inserted (with effect on 1 March 2010), on 7 September 2010, by section 101(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section OB 72(5B): inserted (with effect on 1 March 2010), on 7 September 2010, by section 101(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section OB 72(6)(a): substituted (with effect on 1 March 2010), on 7 September 2010, by section 101(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section OB 72(6)(b): substituted (with effect on 1 March 2010), on 7 September 2010, by section 101(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section OB 72(6)(c): substituted (with effect on 1 March 2010), on 7 September 2010, by section 101(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).