The ICA provisions should be amended to expressly recognise RLWT credits and to provide for the timing of such credit for vendors that are ICA companies. Comment New Zealand-resident companies are able to maintain an imputation credit account (ICA). A company has imputation credits for income tax or provisional tax paid. are then attached to dividends paid by the company to reduce the amount of tax payable on those dividends by their shareholders. Given that the proposed RLWT would be paid on account of income tax, amending the ICA provisions to expressly recognise RLWT credits would lead to double counting. Recommendation That the submission be declined. Clauses 38 and 39 Issue: Tax credits Submission (EY) Clarification is required as to the availability of RLWT credits when are a number of look-through-companies, limited partnerships, trustees and nominee legal owners. Comment This is an area that will require further guidance. However, officials’ intent is that the availability of RLWT credits in circumstances when there is not a single owner should follow the procedure for other types of withholding taxes. The treatment of RLWT credits will be clarified in guidance on the RLWT such as the special report and the relevant Further guidance will also be provided to Tax Information Bulletin item. RLWT agents, where appropriate. Recommendation That the submission be noted. Clause 44
The ICA provisions should be amended to expressly recognise RLWT credits and to provide for the timing of such credit for vendors that are ICA companies. Comment New Zealand-resident companies are able to maintain an imputation credit account (ICA). A company has imputation credits for income tax or provisional tax paid. are then attached to dividends paid by the company to reduce the amount of tax payable on those dividends by their shareholders. Given that the proposed RLWT would be paid on account of income tax, amending the ICA provisions to expressly recognise RLWT credits would lead to double counting. Recommendation That the submission be declined. Clauses 38 and 39 Issue: Tax credits Submission (EY) Clarification is required as to the availability of RLWT credits when are a number of look-through-companies, limited partnerships, trustees and nominee legal owners. Comment This is an area that will require further guidance. However, officials’ intent is that the availability of RLWT credits in circumstances when there is not a single owner should follow the procedure for other types of withholding taxes. The treatment of RLWT credits will be clarified in guidance on the RLWT such as the special report and the relevant Tax Information Bulletin item. Further guidance will also be provided to RLWT agents, where appropriate. Recommendation That the submission be noted. Clause 44
2016-or-rlwtgstossl.docx