New Zealand Seeks Feedback on Canceled Share Payment Rules

New Zealand’s tax authorities are seeking input on how anti-avoidance rules apply to company payments for canceled shares.

The country’s Inland Revenue Department is considering how to decide if a company making ‘off-market’ payments to shareholders is to genuinely reduce capital, or to avoid paying dividends, according to a consultation paper issued Tuesday.

• New Zealand’s anti-avoidance rule prevents any payment for canceling a share to be made instead of paying a dividend, a consultation paper said.
• Tax law allows an “off-market cancellation” of shares to be excluded from the definition of dividends if it meets a series of ...