Introduction to Māori authorities: Glossary
Glossary of Māori authority terms
This glossary explains general terms, words or phrases used in this section. For more specific legal definitions, you'll need to refer to the relevant legislation.
| Base ratio | Māori authority credit account year |
| Benchmark distribution | Māori authority tax rate |
| Beneficiaries | Māori Incorporation |
| Committee of Management | Members |
| Company | Shareholders |
| Further income tax | Trust |
| Māori authority credit | Trustee |
| Māori authority credit account (MACA) |
Base ratio
This provides the maximum tax rate that can be applied to a taxable Māori authority distribution and is calculated using the formula:
Māori authority credit divided by the distribution
Māori authority credit is the amount of the Māori authority credit attached to the distribution. If a Māori authority credit is not attached, that amount is zero.
Distribution is the amount of the distribution by the Māori authority, not including any Māori authority credit.
Benchmark distribution
The first taxable Māori authority distribution paid by an authority during the specified period is referred to as the benchmark distribution. All subsequent taxable distributions paid during that year must carry credits at the same base ratio as set by the benchmark distribution.
Beneficiaries
Beneficiaries are entitled (according to their individual shares) to receive benefits from the income for the year earned by the trust. Trustees determine the amounts of distribution of this income.
Committee of Management
An interim Committee of Management is appointed for a period of time to manage the affairs of the new incorporation.
After the first annual general meeting the shareholders must elect and appoint a new Committee of Management.
Company
The definition of a company for tax purposes is broad. It includes any body corporate or other organisation that has a legal existence distinct from those of its members.
Section 250 of Te Ture Whenua Māori Act 1993 deems a Māori incorporation to be a body corporate.
Further income tax
The amount of further tax payable if the Māori authority credit account has a debit closing balance for the year. The amount will be equal to the debit amount.
Māori authority credit
The amount attached to a distribution or withholding tax deduction.
Māori authority credit account year
This is also known as an imputation year.
This a 12-month period commencing 1 April in any year and ending the following 31 March, regardless of an authority's balance date.
Māori authority tax rate
Taxable income received by Māori authorities attracts a tax rate of 19.5% from the 2005-11 income years and 17.5% from the 2012 income year onwards.
Māori authority credit account (MACA)
A Māori authority credit account (MACA) is a memorandum or record-keeping account. Its purpose is to keep track of how much tax a Māori authority has paid, and how much credit for that tax is available to pass on to the members. It has an opening balance, credit and debit entries, and a closing balance.
Māori incorporation
A Māori incorporation is a structure similar to a company established to facilitate and promote the use and administration of Māori freehold land on behalf of the owners.
Māori incorporations are intended to manage whole blocks of land and are some of the most commercial types of Māori land management structures.
Members of Māori authorities
A person or group of persons who are shareholders, if the Māori authority is a company, or beneficiaries where the Māori authority is a trustee of a trust.
Shareholders
Members of Māori incorporations are referred to as shareholders. The shareholders of Māori incorporations could be individuals, trusts, or corporate bodies.
Dividends are payments made to shareholders from Māori incorporation income based on their shares.
Trust
The legal definition of a trust is an 'equitable obligation' binding a person, (the trustee) to deal with property over which (s)he has control (the trust property) for the benefit of certain persons (the beneficiaries).
The trust is established by an order under Te Ture Whenua Māori Act 1993 (Māori Land Act 1993) and adopts the trust deed, setting out aims and objectives of the trust.
Trustee
A trustee is someone who has been given the legal responsibility of looking after someone else's (beneficiary's) assets and liabilities for that person's benefit.
Although beneficiaries nominate trustees, it is through the court order that the Māori Land Court appoints the trustees.
The court order lists the responsibilities of the trustees in managing the affairs of the trust.
Date published: 30 Mar 2011
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