COMPANY TAX.

Auckland Star, Volume LXIX, Issue 207, 2 September 1938, Page 9

COMPANY TAX.

NEW PROVISION. SHILLING IN POUND. SOCIAL, SECURITY LEVY. ißy Telegraph.—Parliamentary Reporter.) WELLINGTON", Thursday. Included ill the list of amendments to the Social Security Bill introduced to-day was a clause which imposes liability on companies for a charge on income for the purines of the social security scheme. Taxation will lie levied at the rate of 1/ in the £ on the chargeable income of the company, which, with minor modifications, is income assessable for income tax. Exemption from the payment of the tax may be allowed to particular classes of companies by Order-iii-Council. Definite exemptions are allowed in the case of companies engaged ill £okl mining, sclieelite mining, life insurance, banking and petroleum mining. Dividends from these companies will lie taxed in ths hands of shareholders. The charge : payable by any company oil its charge'able income for any year will be due and payable on dates to be determined by Order-in-Council. It is specifically stated that taxation will be levied in the same manner as it is on individuals other than companies. In addition to the tax on the chargeable incomes of companies, which is regarded as a tax 011 profits, there is provision for taxation on profits which may be distributed to shareholders by non-taxable companies. Dividends in the hands of a shareholder received from a company liable to the social security charge will be exempt fiom tax, but anything in the nature of bonus shares or debentures or distributed profits will l»e regarded as dividends. If a company is liquidated and shareholders receive more than they paid up, the excess amount will •be liable to tax.