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Thursday, 27 November 1941

Senator KEANE (Victoria) (Minister for Trade and Customs) . - I remind the honorable senator that the clause as it stands was not framed as the result of any amendment moved in the House of Representatives, nor was it submitted to the committee which inquired into certain phases of our taxation legislation. This clause will have the effect of bringing into the assessable field certain dividends paid out of ex-Australian profits, and also dividends paid out of capital profits made by companies on the disposal of capital assets, such as factory premises. It also provides that the present exemption of these dividends shall continue to apply to all dividends declared out of those profits before the 29th October last. The purpose of the amendment moved by Senator Spicer is to retain the exemption in respect of dividends paid out of capital profits made by companies prior to the 29th. October last irrespective of the date when the dividends are declared. The view taken by the Government is that no obligation rests upon companies to distribute these capital profits; and if they do so distribute them they are now aware of the taxation consequences of any such distribution. I cannot accept the amendment.

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