Trans-Tasman imputation - information for New Zealand companies

About this fact sheet

This fact sheet provides an overview of the Trans-Tasman imputation rules which allow a New Zealand (NZ) company to choose to enter the Australian imputation system and how the Australian imputation rules apply to a NZ company that makes the franking choice.

Key points

• A NZ resident company that chooses to enter the Australian imputation system must notify the Australian Commissioner of Taxation at least one month before any franked distributions are made.
• A NZ resident company can choose to make a franking choice to allow them to maintain an Australian franking account. The choice will continue in force until it is revoked by the company or cancelled by the Australian Commissioner of Taxation.
• The Australian imputation rules will generally apply to a NZ company that chooses to enter the imputation system in the same way as they apply to an Australian company.
• Special rules are required to ensure that the imputation rules operate appropriately to a NZ company and to preserve the integrity of the imputation system.
• Anti-avoidance mechanisms in the Australian provisions will prevent the streaming of a disproportionate amount of Australian franking credits to Australian shareholders. The result will be that Australian franking credits will be allocated on a pro rata basis taking into account the relative interests of Australian and New Zealand shareholders.
• The measure does not allow recognition of NZ imputation credits attached to dividends received by Australian resident shareholders.