Taxation Laws Amendment Act (No. 3) 1998 (47 of 1998)

Schedule 8   Distributions from private companies

Part 1   Income Tax Assessment Act 1936

1   After subsection 108(1)

Insert:

(2AA) For the purposes of this section, the Commissioner must not consider an amount paid or credited by a private company to represent a distribution of profits to the extent that the private company:

(a) is taken under section 109C, 109D or 109E to pay a dividend to the associated person because of the payment or crediting of the amount; or

(b) would be taken under section 109C, 109D or 109E to pay a dividend to the associated person because of the payment or crediting of the amount, apart from sections 109J, 109L, 109N, 109NA, 109NB, 109P and 109Q.

Note: Sections 109C and 109D treat a private company as paying a dividend to an associated person (except a company) if the private company makes a payment or loan to the associated person on or after 4 December 1997. Section 109E treats a private company as paying a dividend if it does not receive minimum payments in relation to loans it made in earlier years (but on or after 4 December 1997).