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i. Stock dividends –Payment of withholding tax on dividend can be avoided if companies pay dividends to shareholders by way of bonus shares or by way of a share repurchase program. Bonus shares issued on a prorate basis to existing shareholders are not taxable currently in cases where they are not issued on a prorate basis to shareholders.
ii. Share repurchases programmes – This is a method of distributing profits where the shares are bought from shareholders usually at a price higher than the market value. The shareholder will not be subjected to withholding tax and capital gains are not taxable
iii. Registered venture capital entities – The dividend received by venture capital entities are not subjected to tax i.e. they are exempted for tax When they sell the shares at a value which is higher than value of investment, they get capital gains which are tax exempt.
Wilfykil answered the question on February 25, 2019 at 11:47
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