Inland Revenue proposed new rules that would treat shareholder loans in closely held companies as dividends once they exceed $50,000 for more than 12 months.
This is a formal submission opposing the proposal, instead supporting taxation only when a company is liquidated or removed from the Companies Register, along with stronger disclosure and enforcement of existing rules.
The proposal risked unfair double taxation, could have affected around 60,000 companies, and would have undermined certainty for taxpayers without improving the integrity of the tax system.
