Annex 2.2: Mechanisms for Taxing the Dividend Component

The taxation implications of company law reform

A discussion document

December 1993

Shareholder	REPURCHASING COMPANIES
	Resident Non-Qualifying Company		Resident Qualifying Company	Non-Resident Company
	On-Market selective only	Off-Market pro rata or selective	Off-Market pro rata or selective	On Market	Off-Market
Resident Non-Corporate	Dividend exempt to recipient. Debit to ICA	Ordinary dividend treatment. ICA, RWT credits attached	Ordinary dividend treatment. ICA, RWT credits attached	No Tax	Ordinary dividend treatment
Resident Corporate	As above	As above	As above	No Tax	As above
Resident Vendor Taxable on share gain	As above plus tax on gain	As above plus tax on gain over and above dividend	As above plus tax on gain over and above dividend	No Tax	As above plus tax on gain over and above dividend
Resident Tax Exempt	Debit to ICA	Ordinary dividend treatment (exempt)	Ordinary dividend treatment (exempt)	No Tax	Ordinary dividend treatment
Non-Residents	No NRWT. Debit to ICA	Ordinary dividend NRWT deduction	Ordinary dividend NRWT deduction	No Tax	No Tax