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Annex 5.2: Private Company References

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The taxation implications of company law reform

A discussion document

December 1993


Annex 5.2: Private Company References

Income Tax Act

  • Section 2 - definitions of terms "major shareholder" and "expenditure on account of an employee".
  • Section 4A(10) - exclusions from term "dividends".
  • Section 6(2),(3) - meaning of term "source deduction payment".
  • Section 106(1)(j) - private and domestic expenditure.
  • Section 147(1) - deduction for cash donations by certain companies (while amending this section the opportunity should be taken to delete the public authority and local authority references in subsection (1) as these entities are no longer excluded from the company definition in section 2 of the Income Tax Act).
  • Section 194(1) - deduction for dividends paid on specified preference shares issued before 23 October 1986.
  • Section 336N(1) - definition of "shareholder-employee" for purposes of FBT regime.
  • Section 336TB(1) - election to pay fringe benefit tax on an annual basis.
  • Section 362(2) - tax deductions to be credited against tax assessed.
  • Section 374B(1)(g) - determination of assessable income for family support purposes.
  • Section 374E(1)(c) - Guaranteed minimum family income.

Inland Revenue Department Act

  • Section 35(4) - evidence in Taxation Review Authority proceedings (as discussed in Chapter 5, this private company reference will no longer be necessary when the reference to "public company" in this provision is changed to "widely-held company").

Estate and Gift Duties Act

  • Section 22 - valuation of shares.

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