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Income Tax Act 2007

Taxation of certain entities - Portfolio investment entities - Using tax credits

HM 55FB: Notified foreign investors and tax credits for supplementary dividends

You could also call this:

“Foreign investors in PIEs may get extra dividend payments from NZ companies”

When a foreign investment PIE (Portfolio Investment Entity) owns shares in a New Zealand company, and the PIE has investors from other countries who meet certain rules, there are some steps that need to be followed when the company pays out dividends.

If you’re a non-resident investor in the PIE and you meet specific requirements, the PIE needs to tell the company about you. They need to do this before the company pays the dividend. The PIE has to give the company enough information about you so that they can work out if you should get an extra payment called a supplementary dividend.

The company then uses this information to figure out how much supplementary dividend to pay to the PIE for you. This helps make sure that you, as a foreign investor, are treated fairly when it comes to getting dividends from New Zealand companies.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM5138319.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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“Tax rules for foreign investors in special investment funds”

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Part H Taxation of certain entities
Portfolio investment entities: Using tax credits

HM 55FBNotified foreign investors and tax credits for supplementary dividends

  1. This section applies when—

  2. a foreign investment PIE has an investment consisting of shares in a company resident in New Zealand; and
    1. a notified foreign investor in the PIE is a non-resident who meets the requirements of section LP 2(1)(c) (Tax credits for supplementary dividends); and
      1. the company has declared a dividend to be paid on a later date.

        1. The PIE must notify the company of the investors referred to in subsection (1)(b) who have an investor interest in the PIE on the date on which ownership of the shares determines a legal entitlement to the dividend. The PIE must provide the information before the date of payment of the dividend.

        2. The information provided by the PIE about the investor must be sufficient to enable the calculation and payment of a supplementary dividend to the PIE in relation to the investor.

        3. The company must use the information provided by the PIE in calculating and paying the supplementary dividend.

        Notes
        • Section HM 55FB: inserted, on (applying for the 2013–14 and later income years), by section 107(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
        • Section HM 55FB(1)(b): amended (with effect on 1 April 2013 and applying for the 2013–14 and later income years), on , by section 91(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).