I am of course aware of the POTENTIAL for recovering the tax withheld in NZ as a credit on my income taxes. I say potential because the process is so complicated and cumbersome plus has restrictions and limitations which render it the next thing to useless for the small investor. No doubt the large corp's are in a position to utilize the credit to great advantage, but not this investor.
With this particular e mail system I don't know how to eliminate the cc: window, but I'm putting something in it in hopes that it will solve your junk mail filtering problem.
Allan
--- On Mon 12/16, tennyson@caverock.net.nz tennyson@caverock.net.nz wrote:From: tennyson@caverock.net.nz [mailto: tennyson@caverock.net.nz]To: sharechat@sharechat.co.nzDate: Mon, 16 Dec 2002 18:30:06 +0000Subject: Re: [sharechat] Overseas ans. to Supp. payments non-NZ holdersHi Allan, In the case of the NZ dividend you are correct. WHS shows a finaldividend of .04/share. The dividend amount is listed, however as$70.59 on 1,500 shares with a withholding tax of $10.59 and a netdividend of $60.00 Imputation credit with which I am an concernedis $18.96. What has thrown me is on the remittance advice which Ipay more attention to it says: ordinary shares 1,500 4.0000c $60.00 Withholding tax $10.59Supplementary div 1,500 0.7085 $10.59 Total NZD $70.59 Net payment $60.00 The check I receive therefore is for $60.00NZ, but I have to payincome tax to my government on $70.59.I don't count myself as the number 1 authority on US tax laws Allan, but I think you are correct. However, I'm fairly sure that the US and NZ has a bilateral arrangement as regards withholding tax. This means you will be able to claim the withholding tax of $10.59 as already paid on your behalf when you fill out your US tax return. So the amount of tax you have to pay on this dividend will be based on $70.59 at your marginal tax rate, less the $10.59, which the US government will give you credit for. On the Aussie dividend statement it is not broken down as much, buthere goes. CHS 2,000 shares @.08C/share Unfranked amount $0.00 Franked amount$160.00 Imputed credit $68.57. My check was for $160.00A You'rebetter then me at unraveling what all this means. To me it means Ireceive a check for $160.00, but must pay tax to the U.S. on morethan that.Again I don't claim to be an expert on AUS-US tax relations. But if they work the same as AUS-NZ tax arrangements you should only pay tax on the $160.00. After all, $160.00 was all you got wasn't it? I fear that you have lost the imputed credit of $68.57 completely. You and every other investor not resident for tax in Australia. I and every New Zealander who holds shares in Australian companies that pay fully franked dividends are in exactly the same position :-(.Anyway, the whole point of the original question was to find out if Australia and New Zealand *do* do things differently, as regards tax treatment of foreign investors. It seems they do. Now, I'm not too concerned about the small private investor like Allan Potts. But the big investors (like Verizon in Telecom, and Edison Mission in Contact) have two choices on which way to treat their share of the profits:1/ Leave the retained earnings in Telecom/Contact and let them develop their own business.2/ Take most of the retained earnings offshore in the form of a high dividend.Ordinarily it would be a business decision as to what a majority shareholder would do. I am all for that and this is not the kind of thing I would like to see the government involved in. However, if I understand the NZ overseas tax regime correctly, then the government is prepared to give a substantial amount of the tax that Telecom/Contact paid to them back to the majority shareholder as some sort of incentive to take the money offshore. What sort of policy is that? It sounds to me like a tax incentive to overseas shareholders to strip as much cash as they can out of New Zealand companies they hold shares in.Isn't this the same government that claims we need foreign investment to develop our country? LOL! Well why did they skew the table via the tax system to favour cash stripping from New Zealand companies? Pathetic! Is there any other government anywhere in the world that subsidizes overseas companies to take cash out of their home country companies?SNOOPYPS Allan, why are you sending you e-mails with a blank Cc: field? If there is nothing in there, can you get rid of it? I'm asking because a blank CcCc: field I use as a marker for spam. I have a mail filter set up to automatically dump such messages and I'd rather not have to rummage around in the trash can to retrieve yours!---------------------------------Message sent by Snoopy e-mail tennyson@caverock.net.nzon Pegasus Mail version 2.55----------------------------------"Dogs have big tongues, so you can bet they don't bite them by accident"----------------------------------------------------------------------------To remove yourself from this list, please use the form athttp://www.sharechat.co.nz/chat/forum/Join Excite! - http://www.excite.com The most personalized portal on the Web!
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