We have been asked if we can release refunds from income tax where an ICA (imputation credit account) return (or the relevant year’s income tax return) hasn’t been filed, if the company can give us a reasonable assurance that it has sufficient imputation credits to entitle it to a refund.
Unfortunately, the answer is no. The requirement to file an ICA return is a legislative one, and we do not have discretion to depart from it.
The company needs to file its ICA return because its income tax refund is limited under section RM 13 of the Income Tax Act 2007 to the balance of its ICA account. If the company has not filed the ICA return, we simply don’t know if it is entitled to the refund and so we can’t release it.
It isn’t just an administrative requirement to file an ICA return, it is a necessary step to allow us to determine if it is actually entitled to the refund at all.