Section OB 73 — Income Tax Act 2007: Statutory producer boards attaching imputation credits to cash distributions

OB 73 Statutory producer boards attaching imputation credits to cash distributions Election (1) On meeting the requirements of subsection (2), a statutory producer board that is an ICA company may choose, for an income year, to attach an imputation credit to a cash distribution paid to a member of the producer board. Requirements (2) The producer board may make an election under subsection (1) if— (a) the distribution is made to all persons who were members of the board at a time in the income year; and (b) the board proposes to pay the distribution based on 1 of the factors set out in subsection (3); and (c) the board would, in the absence of this section, have a deduction for some or all of the distribution, whether as an association rebate under subpart HE (Mutual associations) or under some other provision of this Act. Methods (3) The amount of the distribution must be based on 1 of the following methods of determination, as applicable, for an income year: (a) all payments for a member’s produce transactions during the income year as a proportion of total payments for all members’ produce transactions during the income year; or (b) all levies payable by a member for the income year as a proportion of total levies payable by members for the income year; or (c) another method of determination approved by the Commissioner. Total credits attached (4) The total amount of imputation credit attached to the distribution is calculated using the formula— total net dividend × tax rate 1 − tax rate. Definition of items in formula (5) In the formula in subsection (4),— (a) total net dividend is the total amount of the distribution excluding the amount of imputation credit: (b) tax rate is the basic rate of income tax set out in schedule 1 , part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) for the income year. Member’s credits (6) The amount of a member’s share of an imputation credit attached under subsection (4) is calculated using the formula— member's distribution × total imputation credit attached. total distribution Definition of items in formula (7) In the formula in subsection (6),— (a) member’s distribution is the amount of the member’s share of the distribution excluding the amount of imputation credit: (b) total distribution is the amount of the total distribution paid excluding the amount of imputation credit: (c) total imputation credit attached is total amount of imputation credit attached to the distribution calculated under subsection (4). When producer board chooses not to have deduction (8) If a producer board chooses to treat a distribution as a dividend, it is denied a deduction for the amount of the distribution under section DV 18 (Statutory producer boards and co-operative companies). Relationship with section OZ 15 (9) Section OZ 15 (Attaching imputation credits and notional distributions: modifying amounts) may apply to modify subsection (4). Defined in this Act: amount , association rebate , basic rate , Commissioner , deduction , dividend , ICA company , imputation credit , income tax , income year , levy , member , pay , produce transactions , statutory producer board , Compare: 2004 No 35 ss ME 30 , ME 31 Section OB 73(5)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section OB 73(9) heading: added, on 1 April 2008, by section 500 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section OB 73(9): added, on 1 April 2008, by section 500 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).