Tower (ASX:TWR, NZE:TWR) said the Australian Taxation Office confirmed in a ruling that no portion of the payment received by shareholders as part of the company's NZ$45 million capital return will be treated as a dividend for Australian shareholders, according to a Thursday filing with the Australian and New Zealand bourses.

The ATO also confirmed it would not apply sections 45A or 45B of the Income Tax Assessment Act 1936, which relate to dividend substitution arrangements.

The share cancellation, completed on March 20, constitutes a capital gains tax event, potentially resulting in a capital gain or loss depending on the cost base of the shares, the filing added.

Tower urged shareholders to review the ruling and seek independent tax advice.

Shares of the company fell nearly 1% in recent Thursday trade in New Zealand.