New Zealand Legislation: Bills

16 New section CD 36B inserted

• (1) After section CD 36, the following is inserted:

  “CD 36B Distributions to resident company for deductible foreign equity and fixed-rate foreign equity

  • “Certain distributions not dividends

    “(1) A distribution by a foreign company in relation to an interest in the company of a company resident in New Zealand (the resident) is not a dividend if, at the time of the distribution,—

    • “(a) the distribution is a deductible foreign equity distribution:

    • “(b) the resident's interest in the company is a fixed-rate foreign equity.

    “Distributions treated as payments of interest

    “(2) An amount that is not a dividend as a result of subsection (1) is treated as a payment of interest for money lent to the company by the resident.

    “Defined in this Act: amount, company, deductible foreign equity distribution, dividend, fixed-rate foreign equity, interest, money lent”.

  (2) Subsection (1) applies for the 2009–10 and later income years.