Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Income - Exempt income

CW 15: Dividends paid by qualifying companies

You could also call this:

“Tax-free portions of dividends from qualifying companies for NZ residents”

When a qualifying company pays you a dividend and you live in New Zealand, any amount that’s more than a fully imputed distribution is exempt income for you. This means you don’t have to pay tax on that extra amount.

If you’re a trustee shareholder of a qualifying company and you get a dividend, it might become beneficiary income for someone who lives in New Zealand. If this happens, that dividend is exempt income for the beneficiary. This means the beneficiary doesn’t have to pay tax on it.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513178.

Topics:
Money and consumer rights > Taxes
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Part C Income
Exempt income

CW 15Dividends paid by qualifying companies

  1. To the extent to which the amount of a dividend that a qualifying company pays to a person resident in New Zealand is more than a fully imputed distribution, the amount is exempt income of the person.

  2. If a dividend paid by a qualifying company to a trustee shareholder is, or becomes, beneficiary income of a beneficiary resident in New Zealand, the dividend is exempt income of the beneficiary.

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Notes
  • Section CW 15(1): substituted (with effect on 1 April 2008), on , by section 43(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
  • Section CW 15 list of defined terms bonus issue: repealed, on , by section 15 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
  • Section CW 15 list of defined terms fully imputed: inserted (with effect on 1 April 2008), on , by section 43(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).