The liability for Secondary Tax on Companies is triggered by declaration of a dividend, falls on the company declaring the dividend, and is payable on top of the dividend distributed.
In contrast thereto, as a general principle, the liability for Dividends Tax is triggered by payment of the dividend, falls on the recipient (i.e. beneficial owner) of the dividend, and is to be withheld from the dividend payment by either the company distributing the dividend or, where relevant, certain other withholding agents. Dividends
in specie is an exception to this general principle as the liability for the Dividends Tax remains with the company paying the dividend (as under STC), and is not transferred to the recipient. Further, there are certain transactions that are deemed to be dividends for purposes of the Dividends Tax (such as where low/no interest is charged in respect of a debt that arose by virtue of a share held in the company (see section 64E(4)); as well as certain cessions, share borrowings and share sales (see section 64EB)).