Forum Archive Index - December 2002

["winner69 ." <wwinner69@hotmail.com>]

Companies have to deduct non-resident withholding tax from NZ income 
received by non-residents.

Dividends paid to Australian residents, for example, are taxed at 15%

A supplementary dividend is paid to these poor non-residents so when the 15% 
is taken off their dividend is the same as that paid to NZers.

Snoopy - add the 0.8824 to the 5.00 and take off 15% you get 5.00.

Are NZ shareholders screwed (or subsiding foreigners). No - becasue the 
company recieves a tax credit equivalent to the supplementary dividends 
paid.

How individuals treat this depends on personal circumstances.

Accounting treatment is much the same as for normal dividends. Snoopy - you 
have a RBD half yearly report, have a look at the movement in equity page to 
get a feel how this and the tax credit works.

Hope this helps mate. Is a lot more complicated than this but that's the 
general gist




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