Tag Archives: Dividends

Dividend taxation – muddled, muddied and needs modification?

In its 23 January opinion piece “Tax system needs constant reform” the Australian Financial Review noted that dividend imputation occurs only in Australia and New Zealand among OECD countries. Now comes draft taxation ruling TR 2011/D8 on s 254T of the Corporations Act and the assessment and franking of dividends from 29 June 2010. Here the ATO gives its views on the impact of the amended s 254T on dividends. The draft ruling is based on the premise that s … Continue reading

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Frankly my dear I'm confused

It was welcome when it came and now it’s got everyone hot and bothered. I am referring to the corporation law amendment that allowed dividends to be paid if the balance sheet test was satisfied, no need that dividends can only be ‘out of profits’. Section 254 T of the Corporations Act provided that no dividends may be paid unless: The company’s assets exceeded its liabilities immediately before the dividend is declared and the excess is sufficient for the payment … Continue reading

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Taxing dividend- hike certain to hurt stock values

Dividend taxation has always been fraught with the spectre of double taxation, except when franking credits or imputation are provided to ease the tax burden on the individual investor. The debate is revving up in the U.S with the prospect of a steep jump in dividend taxation in 2011 from 15 to 39.6 percent unless the Congress intervenes and allows the current rate of 15 percent to continue. In the US income from companies is subjected to tax at two … Continue reading

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