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Income Tax Act 2007

Taxation of certain entities - Qualifying companies (QC)

HA 14: Dividends paid by qualifying companies

You could also call this:

“Special tax rules for dividends from qualifying companies to NZ residents”

When a qualifying company pays a dividend to someone living in New Zealand, there are special rules that apply. You don’t have to pay tax on the part of the dividend that is more than a fully imputed distribution. This is called exempt income and is explained in section CW 15.

If you have a different balance date than the usual tax year end, and you get a dividend after the tax year ends but before your balance date, the dividend is counted as if you got it the day after your balance date.

The dividend is not considered resident passive income. This means it’s treated differently from other types of income for tax purposes.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517158.

Topics:

Money and consumer rights > Taxes

HA 13: Qualifying companies’ distributions, or

“Rules for qualifying companies giving value to shareholders”

HA 15: Fully imputed distributions, or

“Rules for fully imputed dividends paid by qualifying companies”

Part H Taxation of certain entities
Qualifying companies (QC)

HA 14Dividends paid by qualifying companies

This section applies when a qualifying company pays a dividend to a person resident in New Zealand.
The dividend is exempt income of the person under section CW 15 (Dividends paid by qualifying companies) to the extent to which it is more than a fully imputed distribution.
If the person has a non-standard balance date and the dividend is derived after the end of the tax year but before their balance date, the dividend is allocated to the day after the balance date.
The dividend does not constitute resident passive income.

Compare

2004 No 35 ss HG 9(1), HG 13(1)

Notes

Section HA 14(2): amended (with effect on 1 April 2008), on 6 October 2009, by section 255(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section HA 14 list of defined terms fully imputed: inserted (with effect on 1 April 2008), on 6 October 2009, by section 255(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).