RE 15 Bonus issues in lieu and shares issued under profit distribution plans
When this section applies

(1)

This section applies when a person makes a payment of resident passive income that consists of a dividend that is—

(a)

a bonus issue in lieu:

(b)

a share issued under a profit distribution plan.

Calculation of amount of tax

(2)

The amount of tax for the payment is calculated using the formula—

(tax rate × (alternative amount + tax paid or credit attached))
− tax paid or credit attached.

Definition of items in formula

(3)

In the formula,—

(a)

tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits):

(b)

alternative amount is, as applicable,—

(i)

the net amount of money offered as an alternative to the bonus issue before the amount of tax is determined; or

(ii)

for a share issued under a profit distribution plan, the net amount offered by the company for the reacquisition of the share before the amount of tax is determined:

(c)

tax paid or credit attached is the total of the following amounts:

(i)

if the dividend is paid in relation to shares issued by an ICA company, the amount of an imputation credit attached to the dividend:

(ii)

if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable on the amount of dividend.

(iii)
[Repealed]

Defined in this Act: amount, amount of tax, bonus issue in lieu, Commissioner, company, dividend, foreign withholding tax, ICA company, imputation credit, pay, profit distribution plan, RWT rules, resident in New Zealand, resident passive income, share

Compare: 2004 No 35 s NF 2(1)(d)

Section RE 15 heading: replaced (with effect on 1 October 2012), on 2 November 2012, by section 148(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RE 15(1): replaced (with effect on 1 October 2012), on 2 November 2012, by section 148(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RE 15(3)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RE 15(3)(b) alternative amount: replaced (with effect on 1 October 2012), on 2 November 2012, by section 148(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RE 15(3)(b)(ii): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on 24 February 2016, by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section RE 15(3)(c)(ii): amended, on 1 April 2017, by section 269(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section RE 15(3)(c)(iii): repealed, on 1 April 2017, by section 269(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section RE 15 list of defined terms Commissioner: inserted (with effect on 1 October 2012), on 2 November 2012, by section 148(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RE 15 list of defined terms FDP credit: repealed, on 1 April 2017, by section 269(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section RE 15 list of defined terms profit distribution plan: inserted (with effect on 1 October 2012), on 2 November 2012, by section 148(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RE 15 list of defined terms RWT rules: inserted (with effect on 1 October 2012), on 2 November 2012, by section 148(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).