Definition for : Equalisation tax

Equalisation tax must be paid when dividends are paid out of Earnings that are either not subject to corporate Income tax or if they are taxed at a lower rate than normal, such as capital gains. It is payable only on payouts Eligible for Dividend tax credit. Equalisation tax is also owed when dividends are paid out of the Earnings of accounting periods closed more than a fixed number of years before the dividend payout.

(See Chapter 38 Share issues of the Vernimmen)

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