Income Tax Assessment Act 1936
(Repealed by No 79 of 2007 )
View history note
Hide history noteFormer s 108 repealed by
No 79 of 2007
, s 3 and Sch 1 item 33, applicable to assessments for the income year in which 1 July 2006 occurred and later income years. S 108 formerly read:
so much (if any) of the amount paid or credited as, in the opinion of the Commissioner, represents a distribution of profits shall, for the purposes of this Act other than Division 11A of Part III, be deemed to be a dividend paid by the company: S 108(1) amended by
No 101 of 2006
, s 3 and Sch 2 item 300, by amending references to repealed inoperative provisions, effective 14 September 2006. For application and savings provisions see the
CCH Australian Income Tax Legislation archive
. 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).
SECTION 108 LOANS ETC. TO SHAREHOLDERS AND ASSOCIATES DEEMED TO BE DIVIDENDS
108(1)
If a private company:
(a)
pays an amount to an associated person by way of an advance or loan; or
(b)
pays or credits an amount on behalf of, or for the individual benefit of, an associated person;
(c)
to the associated person as a shareholder in the company;
(d)
out of profits derived by the company; and
(e)
on the last day of the year of income of the company in which the payment or credit referred to in paragraph (a) or (b) is made.
108(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:
S 108(2AA) inserted by No 47 of 1998.
108(2)
If:
(a) an amount is deemed by subsection (1) to be a dividend paid by a company; and
(b) the company subsequently sets off the whole or a part of a dividend (in this subsection called the subsequent dividend ) distributed by it in satisfaction in whole or in part of the amount;
so much of the amount of the subsequent dividend as is set off as does not exceed the unfranked part of the subsequent dividend:
(c) shall be deemed not to be a dividend for the purposes of this Act other than Part 3-6 of the Income Tax Assessment Act 1997 ; and
(d) shall not be taken to be exempt income for the purposes of Part 3-6 of the Income Tax Assessment Act 1997 only because of this subsection.
S 108(2) amended by No 23 of 2005.
108(2A)
In spite of anything in any other provision of this section, if:
(a) a company has profits immediately before a distribution time for a distribution benefit in relation to the company; and
(b) the distribution time occurred after 3 June 1990; and
(c) the first company is a CFC at the distribution time; and
(d) the first company is a resident of an unlisted country at the distribution time; and
(e) apart from this subsection, an amount deemed by this section to be a dividend paid by the company would include an amount (in this subsection called the eligible distributed amount ) that represents the whole or a part of so much of the distribution payment as does not exceed the amount of those profits;
then, the eligible distributed amount is not deemed by this section to be a dividend paid by the company.
S 108(2A) inserted by No 5 of 1991.
108(2B)
An expression used in subsection (2A) of this section and in section 47A has the same meaning in that subsection as it has in that section.
S 108(2B) inserted by No 5 of 1991.
108(3)
For the purposes of this section:
(a) a transfer of property shall be deemed to be the payment of an amount equal to the value of the property; and
(b) (Repealed by No 23 of 2005)
(c) a reference to an associated person, in relation to a company, is a reference to:
(i) a shareholder in the company; or
(ii) a person who is an associate, within the meaning of section 318 , of a shareholder in the company.
S 108(3) amended by No 101 of 2006 , s 3 and Sch 2 items 301, by amending references to repealed inoperative provisions, effective 14 September 2006. For application and savings provisions see the CCH Australian Income Tax Legislation archive .
S 108(3) amended by No 23 of 2005.
108(4)
(Omitted by No 135 of 1990)
Former s 108 substituted by No 108 of 1987; amended by No 108 of 1981 and No 85 of 1959; substituted by No 90 of 1952.
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