Section CD 40 — Income Tax Act 2007: Adjustment if dividend recovered by company

CD 40 Adjustment if dividend recovered by company When dividends recovered (1) If a company recovers a dividend from a shareholder under section 56 of the Companies Act 1993 or an equivalent provision of foreign law, this section applies to the extent necessary to ensure that— (a) the recovered dividend and any attached imputation credit or FDP credit are disregarded for the purposes of this Act; and (b) the resulting refunds are made. Amendment of assessments (2) Section 113B of the Tax Administration Act 1994 requires the Commissioner to amend assessments if given notice of the recovery. Refunds (3) If the Commissioner is given notice of the recovery, the Commissioner must refund any relevant— (a) income tax, FDP, or FDP penalty tax of the shareholder; and (b) non-resident withholding tax (NRWT) or resident withholding tax (RWT) of the company. Relationship with subpart RM (4) The refund is made despite sections RM 2 to RM 6 (which relate to refunds of excess tax) and RM 18 to RM 21 (which relate to limits on refunds), but subject to the other provisions of this Act. Adjustments to accounts (5) A credit or debit (as applicable) arises as at the date of recovery, and must be recorded in— (a) the imputation credit account of the company; or (b) if the shareholder is an imputation credit account (ICA) company or foreign dividend payment account (FDPA) company, the imputation credit account or FDP account of the shareholder. Defined in this Act: assessment , Commissioner , company , dividend , FDP , FDP account , FDP credit , FDP penalty tax , FDPA company , ICA company , imputation credit , imputation credit account , income tax , notice , NRWT , RWT , shareholder Compare: 2004 No 35 s CD 29