Refunding franking credits: endorsed income tax exempt entities and deductible gift recipients
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Franking credits attached to franked dividends received by endorsed income tax exempt entities, deductible gift recipients and public relief funds may be refundable, provided certain eligibility criteria are met.
Franking credits arise for shareholders when certain resident Australian companies pay income tax on their taxable income and distribute their after-tax profits by way of franked dividends. These franked dividends have franking credits attached. Franked dividends are received either directly as a shareholder or indirectly as a beneficiary of a trust.
Organisations that receive a dividend from a New Zealand company with Australian franking credits attached to it will be able to obtain a refund of those credits if it would have been able to, had the dividend been paid by an Australian company. New Zealand franking credits cannot be claimed.
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