Returns of capital: Off-market share cancellations – bright line tests and the Commissioner’s notice requirements and other matters

This operational statement provides guidance on the tax treatment of off-market share cancellations, focusing on the bright line tests and the Commissioner’s notice requirements under section CD 22 of the Income Tax Act 2007. It explains when payments made on share cancellations are not to be treated as dividends, the process for requesting a Commissioner’s notice, and the implications if a payment is later found to be a dividend.

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