Cap. 325 Art. 9Tax free dividends.

(1) Any dividends (or part thereof) distributed by a qualifying company out of its gains or profits, or part thereof, which, under the provisions of this Act, have been relieved from the payment of income tax, and to which the provisions of this article apply, shall be exempt from income tax in the hands of the members of the company in receipt of such distribution.

(2) Where a dividend referred to in subarticle (1) is distributed to a member which is also a company (in this subarticle referred to as "the second company"), the said dividend shall likewise be distributable by the second company to its own members in the form of dividends exempt from income tax in the hands of the recipients, and where a member of the second company is again a company, the preceding provisions of this subarticle shall apply mutatis mutandis as though references to the first company were references to the second company and as though references therein to the second company were references to that member, and the principle set out in this subarticle shall continue to be applied for as long as the gains or profits or part thereof to which this article applies are distributed by way of dividends.

(3) The provisions of this article shall apply to the gains or profits, or part thereof, of a company which are relieved from income tax:

(a) under the provisions of article 4, being gains or profits derived in any year by a company in respect of which it is entitled to a tax holiday;

(b) under the provisions of article 5, being part of the gains or profits of a company relieved from income tax for any year under the export incentives scheme;

(c) under the provisions of article 7, being gains or profits of a company for any year relieved from income tax through the grant of an investment allowance;

(d) under the provisions of article 5A, being gains or profits of a company relieved from income tax for any year under the investment incentive scheme.

(4) Every company shall, upon the distribution of a dividend exempt in whole or in part from income tax under the provisions of this article, furnish to each member in receipt of such dividend a certificate setting out the amount of the dividend paid, the year in which the gains or profits so distributed were earned by the company, and declaring which part of that dividend is exempt from income tax as provided in this article.