Income Tax Act 2007 section 952

Conditions for a set-off claim

Section 952 sets out the conditions that must be met before a person who makes certain qualifying payments (known as section 946 payments) can claim to set off income tax they have suffered by deduction at source against income tax they are required to pay over on payments they have made.

• A set-off claim can be made at the end of a return period falling within an accounting period, provided two conditions (A and B) are both satisfied
• Condition A requires that during the return period the person has either made a section 946 payment or received a payment on which they have suffered income tax by deduction
• Condition B requires that at the end of the return period there is both a net amount of income tax suffered and a net amount of income tax payable, each calculated on a cumulative basis from the start of the accounting period
• The net amounts are determined by comparing cumulative tax suffered or payable against amounts already treated as repaid or paid through previous set-off claims in the same accounting period