23 April 2013
Dunne: transitional imputation penalty set for repeal
A tax penalty implemented as part of the company tax rate change is likely to be repealed, Revenue Minister Peter Dunne announced today.
Parliament’s Finance and Expenditure Select Committee is considering repealing the transitional imputation penalty as part of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Bill, Mr Dunne said.
The penalty, which applied as at 31 March 2013, is designed to stop deliberate over-imputing of dividends at 30% (instead of 28%) during the two-year transitional period.
Mr Dunne said that after considering submissions, officials had recommended repealing the penalty.
“The current penalty rate set at 10% is regarded as excessive. And given the fact that the transitional period is now finished, it is more straightforward to simply repeal the penalty than adjust the rate,” he said.
A recommendation to the select committee to repeal the transitional imputation penalty was therefore included in the officials’ report on submissions to the Bill.
Mr Dunne said companies that have over-imputed dividends during the transitional period are required to pay the penalty by 20 June 2013, but that the penalty may be cancelled if the select committee recommends the repeal and the Bill is passed.
The select committee is due to report the Bill back to the House by the end of May.
Mark Stewart | Press Secretary | Office of Hon Peter Dunne
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