New Zealand Inland Revenue has published a draft Operational Statement for consultation on the application of the bright line tests for determining whether off-market share cancellations are treated as a non-taxable return of capital or a taxable dividend. General rules provide that share cancellations of more than 15% meet a bright line test and are not considered a dividend (unless an anti-avoidance rule applies), and share cancellations of less than 10% do not, so are considered a dividen…