Income from equity

CW 9 Dividend derived from foreign company
Exempt income

(1)

A dividend from a foreign company is exempt income if derived by a company that is resident in New Zealand.

Exclusions

(2)

Subsection (1) does not apply to a dividend if the dividend is paid in relation to rights that are—

(a)

a direct income interest that meets the requirements of neither section EX 34 (CFC rules exemption) nor section EX 35 (Exemption for interest in FIF resident in Australia) and is excluded from being an attributing interest by—

(i)

section EX 31 (Exemption for ASX-listed Australian companies):

(ii)

section EX 32 (Exemption for Australian unit trusts with adequate turnover or distributions):

(iii)

section EX 36 (Venture capital company emigrating to grey list country: 10-year exemption):

(iv)

section EX 37 (Grey list company owning New Zealand venture capital company: 10-year exemption):

(v)

section EX 37B (Share in grey list company acquired under venture investment agreement):

(vi)

section EX 39 (Terminating exemption for grey list company with numerous New Zealand shareholders):

(b)

a fixed-rate foreign equity:

(c)

rights to a deductible foreign equity distribution.

Non-application to certain dividends

(3)

This section does not apply to a dividend—

(a)

derived by a portfolio investment entity:

(b)

excluded by section CD 36(2) (Foreign investment fund income) from the effect of section CD 36(1).

Defined in this Act: company, dividend, deductible foreign equity distribution, exempt income, fixed-rate foreign equity, portfolio investment entity, resident in New Zealand

Section CW 9: substituted (with effect on 30 June 2009), on 6 October 2009, by section 41(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section CW 9(2)(a): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 9(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section CW 9(3) heading: replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 9(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section CW 9(3): replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 9(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section CW 9 list of defined terms multi-rate PIE: repealed (with effect on 1 July 2011), on 7 May 2012, by section 9(3)(a) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section CW 9 list of defined terms portfolio investment entity: inserted (with effect on 1 July 2011), on 7 May 2012, by section 9(3)(b) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section CW 9 list of defined terms portfolio tax rate entity: repealed (with effect on 1 July 2011), on 7 May 2012, by section 9(3)(a) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).