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The first dividend your company pays each tax year is called the benchmark dividend. The ratio between the benchmark dividend and the imputation credits your company attaches to it is called the benchmark dividend ratio. 

Your company must use the same ratio for the rest of that tax year. If the benchmark dividend has no credits attached, the company cannot attach credits to any other dividends it pays in that tax year.

The only time you can change the ratio is when both:

  • you are not paying the following dividend payments as part of an arrangement to get a tax advantage
  • your company completes a Ratio change declaration form - IR407 and sends it to us before it pays those following dividends to its shareholders.

The benchmark dividend rules do not apply to supplementary dividends paid under the foreign investor tax credit (FITC) rules.

For more information, check out our Imputation guide for New Zealand companies - IR274.