Section RM 18 — Income Tax Act 2007: Limits on refunds related to foreign dividends

RM 18 Limits on refunds related to foreign dividends Maximum refund (1) Despite section RM 3 , if the overpayment described in that section relates to an earlier tax year, the refund must be no more than the relevant credit balance as follows: (a) for an FDPA company, the credit balance of the company’s FDP account at the end of the tax year that is before the tax year in which the entitlement to the refund arises: (b) for an ICA company that is not an FDPA company, the credit balance of the company’s imputation credit account at the end of the tax year that is before that in which the entitlement to the refund arises: (c) for a company described in paragraph (a) or (b) that ends its residence in New Zealand, the credit balance, just before the company stops being resident, of— (i) the company’s imputation credit account arising as a debit under section OC 15 (FDPA overpayment of FDP); or (ii) the company’s FDP account arising as a debit under section OC 26 (FDPA final balance). Treatment of amount not refunded (2) If the amount of a company’s overpayment is not refunded because it is more than the maximum allowed under subsection (1), the amount may still be used to reduce FDP for a foreign dividend paid to the company. Reductions in credit balances (3) For the purposes of this section, a credit balance referred to in subsection (1) is treated as reduced by an earlier refund under this section paid to the company in the tax year in which the entitlement to the refund arises. The refund of income tax under sections RM 13 to RM 17 in the same tax year must be no more than the relevant credit balance. Defined in this Act: amount , company , FDP , FDP account , FDPA company , foreign dividend , ICA company , imputation credit account , income tax , pay , resident in New Zealand , tax year , Compare: 2004 No 35 s NH 4(2), (3)