Who must lodge a franking account tax return?



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The franking account tax return must be completed for all Australian corporate tax entities and New Zealand franking companies that have:

  • a liability to pay franking deficit tax (FDT), and/or
  • a liability to pay over-franking tax (OFT), and/or
  • an obligation to disclose information to the Commissioner of Taxation in relation to any significant variation in their benchmark franking percentage.

If there is such a liability or disclosure obligation the entity is required to complete Section A and the remaining labels on the franking account tax return that are relevant to that liability and/or obligation. If there is no such liability or disclosure obligation, lodgment of this tax return is not necessary.

An entity is a corporate tax entity for the purposes of Part 3-6 of the Income Tax Assessment Act 1997 at a particular time if the entity is a company at that time, or a corporate limited partnership, corporate unit trust or a public trading trust in relation to the income year in which that time occurs.

A company is a New Zealand franking company if the company:

  • is a New Zealand resident, and
  • has made an election to join the Australian imputation system.

The Australian imputation rules will generally apply to a New Zealand franking company in the same way as they apply to an Australian corporate tax entity.

Last modified: 18 Sep 2008QC 17477