Section CD 18 — Income Tax Act 2007: Dividend reduced if foreign tax paid on company’s income

CD 18 Dividend reduced if foreign tax paid on company’s income When this section applies (1) This section applies when a person— (a) derives a dividend from a company that is a foreign company; and (b) has a liability under the laws of a country or territory outside New Zealand for income tax on income of the company corresponding to the liability that the person would have under the laws of New Zealand for income tax on income of the company if the company were a partnership in which the person were a partner; and (c) pays the income tax; and (d) provides to the Commissioner upon request, in the time allowed by the Commissioner, sufficient information to satisfy the Commissioner as to the amount of income tax paid. Amount of dividend reduced (2) The amount of the dividend is reduced by the greater of zero and the amount calculated using the formula— total tax paid − earlier reductions. Definition of items in formula (3) In the formula,— (a) total tax paid is the total amount of income tax on income of the company that the person has paid in the country by the time that the person derives the dividend: (b) earlier reductions is the total amount of reductions under this section that, by the time that the person derives the dividend, have affected other dividends derived by the person from the company. Defined in this Act: Commissioner , company , dividend , foreign company , income , income tax , New Zealand , pay Compare: 2004 No 35 s CD 10C