Drawings etc. deemed to be dividends paid out of profits
94M Drawings etc. deemed to be dividends paid out of profits
If the partnership pays or credits an amount to a partner in the partnership:
against the profits or anticipated profits of the partnership; or
otherwise in anticipation of the profits of the partnership;
(whether or not the amount of the profits or anticipated profits is ascertainable), the amount paid or credited is taken, for the purposes of the income tax law, to be a dividend paid by the partnership to the partner out of profits derived by the partnership.
If the partnership makes a subsequent distribution, the Commissioner must take such steps (if any) as are necessary to ensure that the partner is not subject to double taxation.
This Act’s bill:Second reading speech
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