Most New Zealand-resident companies, unit trusts, producer boards and cooperatives must file an imputation return each year. The following bodies don't have to file imputation returns:
non-resident companies
look-through companies (LTCs)
trustee companies (but not group investment funds with Category A income)
any company with a constitution preventing it from distributing all its income or property to any proprietor, member or shareholder
companies whose income is completely exempt from tax
local authorities
Crown research institutes
non-active companies
Maori authorities.
Trans-Tasman imputation and imputation groups
Australian companies can elect to maintain a New Zealand imputation account from the 2003–04 tax year. An alternative form of grouping (for imputation purposes only) is available, which Australian companies may join.
Returns for trans-Tasman imputation
Australian companies, which elect under the trans-Tasman rules, are required to file a 2019 Annual imputation return (IR4J) by 31 July 2019.
The return is completed for the New Zealand tax year (1 April to 31 March) regardless of your accounting year. Only fields 1 to 10A of this return need to be completed.
A $250 penalty may be charged where returns aren’t filed on time.
Returns for imputation groups
The imputation group representative will file the Annual imputation return (IR4J) on behalf of the imputation group.
Imputation group members should not file individual imputation details. An exception applies for the nominated company of a resident imputation group, where there is an imputation credit account (ICA) debit balance.
Where payment of any further income tax (a debit ICA balance) is made, attach a note of how the corresponding income tax credit should be allocated to group members.
For further details go to https://www.ird.govt.nz/topics/income-tax/imputation
Foreign dividend payments (FDP)
The FDP rules have been fully repealed from 1 April 2017. This means FDP can no longer be included in your annual imputation return. Please do not include FDP credits at 7B and 8B.
Multi-rate PIE (MRP)
An MRP isn’t required to maintain an ICA. Credits in the ICA on the date a company becomes an MRP are lost. Where there is a debit in the ICA on the date a company becomes an MRP, the company has until the end of the tax year to clear the debit. Listed PIEs will continue to pay tax and file income tax returns as a company and must maintain an ICA.
For more help see the booklet Portfolio investment entity guide (IR860).
Limitation on tax refunds
Inland Revenue may hold all or part of a refund if:
the company is expecting an income tax refund, and
the credit balance in the ICA at 31 March 2019 is less than the refund.
If there have been additional credits to the ICA since 31 March 2019, the company may file an interim 2020 IR4J return in anticipation of an IR4 annual return being filed at a later date. Inland Revenue may then be able to release the refund.
Inland Revenue can also apply non-refundable overpaid income tax to a company’s previous years’ income tax liabilities, where these debits exist, rather than transferring the credit forward to the next year’s provisional tax.
This avoids further payments having to be made to satisfy back-year debts.
Research and development (R&D) loss tax credit
No credit balance due to provisional or income tax paid will arise in the imputation credit account of a company that has claimed the R&D loss tax credit, until that company has repaid the cashed-out amounts. This is to maintain tax neutrality with companies who are not able to cash out losses.
Repayment of the R&D loss tax credit can occur by paying sufficient:
future income tax (i.e by trading into profit), and/or
R&D repayment tax following a loss recovery event (LRE).
For more information on the impacts to imputations, and examples on the R&D loss tax credit go to www.ird.govt.nz (search keywords: R&D).
Completing the return
The information on the first page of the return helps Inland Revenue to be sure that any correspondence they send goes to the right place.
Questions 1 to 5
Please make sure you fill in Questions 1 to 5, if these details are not already shown. Inland Revenue ask for your daytime phone number at Question 5 so they can call you, if necessary, to ask questions about the return.
Question 3 Postal address
If you have a new postal address, write the details at Question 3.
If your new address is a PO Box number, please show your box lobby if you have one. If you are unsure of your box lobby, please contact New Zealand Post.
If the company uses its tax agent’s postal address, leave this address panel blank. The agent will let Inland Revenue know of any change of address when updating their client list.
