Section RE 15 — Income Tax Act 2007: Bonus issues in lieu and shares issued under profit distribution plans

RE 15 Bonus issues in lieu and shares issued under profit distribution plans When this section applies (1) This section applies when a person makes a payment of resident passive income that consists of a dividend that is— (a) a bonus issue in lieu: (b) a share issued under a profit distribution plan. Calculation of amount of tax (2) The amount of tax for the payment is calculated using the formula— (tax rate × (alternative amount + tax paid or credit attached)) – tax paid or credit attached. Definition of items in formula (3) In the formula,— (a) tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits): (b) alternative amount is, as applicable,— (i) the net amount of money offered as an alternative to the bonus issue before the amount of tax is determined; or (ii) for a share issued under a profit distribution plan, the net amount offered by the company for the repurchase of the share before the amount of tax is determined: (c) tax paid or credit attached is the total of the following amounts: (i) if the dividend is paid in relation to shares issued by an ICA company, the amount of an imputation credit attached to the dividend: (ii) if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable on the amount of dividend: (iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of an FDP credit attached to the dividend. Defined in this Act: amount , amount of tax , bonus issue in lieu , Commissioner , company , dividend , FDP credit , foreign withholding tax , ICA company , imputation credit , pay , profit distribution plan RWT rules , resident in New Zealand , resident passive income , share , Compare: 2004 No 35 s NF 2(1)(d) Section RE 15 heading: replaced (with effect on 1 October 2012), on 2 November 2012, by section 148(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section RE 15(1): replaced (with effect on 1 October 2012), on 2 November 2012, by section 148(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section RE 15(3)(a) tax rate : amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section RE 15(3)(b): replaced (with effect on 1 October 2012), on 2 November 2012, by section 148(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section RE 15 list of defined terms Commissioner : inserted (with effect on 1 October 2012), on 2 November 2012, by section 148(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section RE 15 list of defined terms profit distribution plan : inserted (with effect on 1 October 2012), on 2 November 2012, by section 148(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section RE 15 list of defined terms RWT rules : inserted (with effect on 1 October 2012), on 2 November 2012, by section 148(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).