Introduction to Maori authorities: Glossary
Glossary of Maori 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 | Maori authority credit account year |
| Benchmark distribution | Maori authority tax rate |
| Beneficiaries | Maori Incorporation |
| Committee of Management | Members |
| Company | Shareholders |
| Further income tax | Trust |
| Maori authority credit | Trustee |
| Maori authority credit account (MACA) |
Base ratio
This provides the maximum tax rate that can be applied to a taxable Maori authority distribution and is calculated using the formula:
Maori authority credit divided by the distribution
Maori authority credit is the amount of the Maori authority credit attached to the distribution. If a Maori authority credit is not attached, that amount is zero.
Distribution is the amount of the distribution by the Maori authority, not including any Maori authority credit.
Benchmark distribution
The first taxable Maori 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 Maori Act 1993 deems a Maori incorporation to be a body corporate.
Further income tax
Further tax payable if the Maori authority credit account has a debit closing balance for the year. The amount will be equal to the debit amount.
Maori Authority credit
The amount attached to a distribution or withholding tax deduction.
Maori authority credit account year
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.
Maori authority tax rate
Taxable income received by Maori authorities attracts a tax rate of 19.5% from the 2004 - 05 income year.
Maori authority credit account (MACA)
A Maori authority credit account (MACA) is a memorandum or record-keeping account. Its purpose is to keep track of how much tax a Maori 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.
Maori incorporation
A Maori incorporation is a structure similar to a company established to facilitate and promote the use and administration of Maori freehold land on behalf of the owners.
Maori incorporations are intended to manage whole blocks of land and are some of the most commercial types of Maori land management structures.
Members of Maori authorities
A person or group of persons who are shareholders, if the Maori authority is a company, or beneficiaries where the Maori authority is a trustee of a trust.
Shareholders
Members of Maori incorporations are referred to as shareholders. The shareholders of Maori incorporations could be individuals, trusts, or corporate bodies.
Dividends are payments made to shareholders from Maori 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 Maori Act 1993 (Maori 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 Maori Land Court appoints the trustees.
The court order lists the responsibilities of the trustees in managing the affairs of the trust.
Date published: 06 Apr 2006
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