COMPANY TAXES.

Auckland Star, Volume LXXI, Issue 206, 30 August 1940, Page 3

COMPANY TAXES.

INCOME LEVY CHANGES. SHARE CAPITAL TRANSFERS. WELLINGTON, thie day. Slight alterations in the income tax law ae it applies to companies are provided for in Finance Bill No. 2, which wae introduced in the House of Representatives yesterday and read a first time. A claiiee relating to gold mining companies eneures that double taxation of these companies ie avoided. It ie explained that a gold mining company is taxed not on profits in the ordinary way hut on dividends declared out of its. profits. If a-company received a dividend from a subsidiary company then the profits of the eu'beidiary company would be taxed twice.-

A clause enables the parent company to be allowed a credit for the amount of tax paid by a subsidiary company on dividends received by the parent company and paid out again as its dividends.

Another clause is deeigned to stop companies from transferring share capital to debenture capital with the object of avoiding taxation. The taxation net, as far as proprietary companies are concerned, ie tightened by another provision in the bill. — (Parliamentary Reporter.)