Section 94M — Income Tax Assessment Act 1936: Drawings etc. deemed to be dividends paid out of profits

(1) If the partnership pays or credits an amount to a partner in the partnership: (a) against the profits or anticipated profits of the partnership; or (b) otherwise in anticipation of the profits of the partnership; (whether or not the amount of the profits or anticipated profits is ascertainable), the amount paid or credited is taken, for the purposes of the income tax law, to be a dividend paid by the partnership to the partner out of profits derived by the partnership. (2) If the partnership makes a subsequent distribution, the Commissioner must take such steps (if any) as are necessary to ensure that the partner is not subject to double taxation.