Is dividends tax payable if the dividend is distributed by a PTY company to a NON PROFIT company which is a shareholder of the PTY?
Author: Peter Surtees
Important:
This answer is based on tax law year ending 28 February 2020.
Answer:
Section 64F(1) of the Income Tax Act:
“Any dividend is exempt from the dividends tax to the extent that it does not consist of a dividend that comprises a distribution of an asset in specie if the beneficial owner is- (a) a company which is a resident”.
I assume the non-profit company is a resident. If so, then, provided the dividend is not a dividend in specie, the dividend will be exempt from the dividends tax.