• Other deemed dividends - section 108

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    Under section 108 of the Act, the Tax Office may treat as a dividend:

    • an amount paid by a private company to a shareholder - or a shareholder's associate - by way of an advance or loan, or
    • an amount paid or credited on behalf of, or for the individual benefit of, a shareholder or a shareholder's associate.

    To deem these payments to be dividends, the Tax Office must be of the opinion that the payments and credits represent a distribution of profits.

    Section 108 will not apply to an amount paid or credited after 2 June 1990 by an unlisted country CFC if that amount is deemed, under section 47A, to be a dividend.

    Last modified: 05 Dec 2006QC 18000