Non-cash dividends

Clause 120

Issue: Drafting correction

Submission

(Ernst & Young)

The proposed remedial amendment is technically correct, but it needs to be repeated in section RE 16(3).

Comment

Officials agree with the submitter on this drafting correction.

Recommendation

That the submission be accepted.

Issue: Reconciling tax treatment of bonus issues

Submission

(Ernst & Young)

That the resident withholding tax treatment of the two types of bonus issue should be reconciled.

Comment

Officials agree that there is some scope for refinement in this area. The matter has been previously raised with officials by another firm of accountants and is being considered as part of the review of the tax rules for closely held companies that is currently on the Government’s tax policy work programme.

Recommendation

That the submission be noted subject to officials’ comments.