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CW 13: Proceeds from share or option acquired under venture investment agreement
or “Tax-free profits from selling certain venture investments”
You could also call this:

“How tax rules apply to dividends for former qualifying companies”

When you’re a company that used to be a qualifying company, there are special rules about dividends you receive. These rules apply if you get a dividend within 7 years after you stop being a qualifying company.

If you get a dividend that would normally be tax-free under section CW 10, it might not be tax-free in this case. This happens if you paid out a dividend that was tax-free under section CW 15 when you were still a qualifying company.

In this situation, the dividend you receive is not tax-free under section CW 10. However, it might still be partly tax-free if section CW 9 applies to it.

These rules are meant to make sure that companies can’t use their status as a qualifying company to avoid paying tax on dividends unfairly.

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Next up: CW 15: Dividends paid by qualifying companies

or “Tax-free portions of dividends from qualifying companies for NZ residents”
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Part C Income
Exempt income

CW 14Dividends derived by qualifying companies

  1. This section applies when a company derives a dividend (the derived dividend) after it becomes a qualifying company, if—

  2. the derived dividend is derived less than 7 years after the company ceases to be a qualifying company; and
    1. section CW 10 applies to the derived dividend; and
      1. the company paid a dividend that section CW 15 applied to, when the company was a qualifying company.

        1. The derived dividend is not exempt income under section CW 10, except to the extent to which section CW 9 applies.

        Notes
        • Section CW 14: replaced (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 32(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
        • Section CW 14(1)(b): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 33(1)(a) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
        • Section CW 14(2): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 33(1)(b) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).