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Income Tax Act 2007

Taxation of certain entities - Qualifying companies (QC)

HA 17: Dividends derived by qualifying companies

You could also call this:

“Qualifying companies must pay tax on dividends from related NZ companies”

This part of the law talks about what happens when a qualifying company gets a dividend. A dividend is money that a company gives to its shareholders.

If you’re a qualifying company and you get a dividend from another company in New Zealand that’s part of the same group, something special happens. Usually, this kind of dividend wouldn’t be taxed. But for qualifying companies, it is taxed.

There’s one exception to this rule. If the dividend comes from a company overseas, it might not be taxed. You can check section CW 9 to see if this applies to your situation.

Remember, this law only applies to qualifying companies. If you’re not sure if your company is a qualifying company, you might need to check other parts of the law or ask for help.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1517174.

Topics:
Money and consumer rights > Taxes
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“Tax rules for trustees and beneficiaries receiving dividends from qualifying companies”

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HA 18: Treatment of dividends when qualifying company status ends, or

“How dividends are handled when a company loses its qualifying status”

Part H Taxation of certain entities
Qualifying companies (QC)

HA 17Dividends derived by qualifying companies

  1. This section applies to a dividend—

  2. that is derived by a qualifying company; and
    1. to which section CW 10 (Dividend within New Zealand wholly-owned group) applies.

      1. The dividend is not exempt income under section CW 10, except to the extent to which section CW 9 (Dividend derived by company from overseas) applies to it.

      Compare
      Notes
      • Section HA 17(1)(a): amended, on (with effect on 1 April 2008 and applying for the 2008–09 and later income years), by section 125(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section HA 17(1)(b): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 74(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
      • Section HA 17(2): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 74(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).