Dividend rules: RWT on Option 1: The obligation to Eliminates the current over-taxation of dividends paid between Potential increase in compliance costs for paying companies, account for RWT on all companies. by requiring them to: dividends between companies dividends paid between Should the RWT obligation to companies should be removed. Reduces compliance costs for some companies that pay establish whether or not shareholders are corporate withhold 5% on dividends to other companies. can be difficult for widely held companies); and dividends paid between all differentiate between corporate and non-corporate companies be removed? recipients in systems (i.e. in order to ensure RWT is withheld only on dividends to non-corporate). Requires legislative changes. Fiscal cost of $9m in first year of operation. Option 2: The obligation to Alleviates the current over-taxation of dividends paid between Requires legislative changes. account for RWT on all companies. dividends paid between Fiscal cost same as option 1. companies should be optional. Reduces compliance costs for all companies that choose to not account for the RWT and does not increase compliance costs for other companies who cannot or choose not to identify which shareholders are corporate. Option 3: The obligation to No fiscal implications. Does not eliminate nor alleviate the current over-taxation of account for RWT on all dividends paid between companies. dividends paid between Does not require paying companies to establish which companies should be maintained shareholders are corporate and/or differentiate between corporate Does not reduce compliance costs associated with the (status quo). and non-corporate recipients. obligation to withhold RWT on fully-imputed dividends paid between companies. No legislative change is required.
Dividend rules: RWT on dividends between companies Should the RWT obligation to withhold 5% on dividends paid between all companies be removed? Option 1: The obligation to account for RWT on all dividends paid between companies should be removed. Eliminates the current over-taxation of dividends paid between companies. Reduces compliance costs for some companies that pay dividends to other companies. Potential increase in compliance costs for paying companies, by requiring them to: establish whether or not shareholders are corporate can be difficult for widely held companies); and differentiate between corporate and non-corporate recipients in systems (i.e. in order to ensure RWT is withheld only on dividends to non-corporate). Requires legislative changes. Fiscal cost of $9m in first year of operation. Option 2: The obligation to account for RWT on all dividends paid between companies should be optional. Alleviates the current over-taxation of dividends paid between companies. Reduces compliance costs for all companies that choose to not account for the RWT and does not increase compliance costs for other companies who cannot or choose not to identify which shareholders are corporate. Requires legislative changes. Fiscal cost same as option 1. Option 3: The obligation to account for RWT on all dividends paid between companies should be maintained (status quo). No fiscal implications. Does not require paying companies to establish which shareholders are corporate and/or differentiate between corporate and non-corporate recipients. No legislative change is required. Does not eliminate nor alleviate the current over-taxation of dividends paid between companies. Does not reduce compliance costs associated with the obligation to withhold RWT on fully-imputed dividends paid between companies.
2016-ris-archcrm-bill-11.docx