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  • Applying for a refund of franking credits

    Eligible organisations can apply for a refund of franking credits annually.

    In the last week of June of each year, we send a personalised refund application package to eligible organisations that applied for and received a refund in the previous financial year.

    Next steps:

    To apply for a refund of franking credits, refer to:

    • Application for refund of franking credits 2018–19
    • Completing your application for refund of franking credits 2018–19

    Your rights

    From 1 July 2013, changes to the tax law mean your claim for (or an amendment of) a tax offset refund will be subject to an income tax assessment.

    These changes apply to franking credits attached to dividends, and attached to an entitlement to franked distributions, for the year ended 30 June 2014 onwards.

    The changes also mean your organisation now has objection rights and time limits in which to amend its claims for tax offset refunds (here being a refund of franking credits).

    We cannot amend an assessment if the time limit has passed.

    See also

    Notices of assessment

    If your organisation is a:

    • trust or a government entity – we will issue a notice of assessment
    • company – a notice of assessment will be deemed to have been issued at the time the form is lodged.

    If an amendment is made to any original assessment, we will issue a notice of amended assessment.

    A notice of assessment or a notice of amended assessment will include the following information:

    • the amount of your organisation’s taxable or net income (or that the amount is zero)
    • the amount of the tax payable on that taxable or net income (or that the amount is zero)
    • the total of your organisation’s tax offset refunds (or that the amount is zero).

    Eligible organisations that want to apply for a refund but have not received a refund package by the end of the last week of June should phone us on 1300 130 248.

    Paying the refund directly into your account

    Complete the electronic funds transfer (EFT) section of the application form, so we can deposit the refund directly into your organisation's Australian bank, credit union or building society account of choice. It is faster to have the refund paid directly to your organisation's financial institution account.

    If you have outstanding tax liabilities

    If your organisation has any outstanding tax liabilities or other debts that are collected by us, the amount of any refund will be offset against those tax liabilities and debts. Any remaining amount will then be refunded to your organisation.

    Limits on claiming refunds

    Rules apply to prevent an organisation from receiving a franking credit on a distribution which is attributable to a franked dividend through another eligible organisation. This ensures multiple tax offsets cannot be claimed in respect of the same franked dividend.

    Example

    A charitable trust, Charity, is an eligible organisation. It is paid a fully franked dividend of $5,000. Attached to the dividend is a franking credit of $2,575 which Charity claims from the ATO. As a consequence of the dividend, Charity makes a distribution of $5,000 to Benevolence another charitable trust that is an eligible organisation. Benevolence's entitlement to the distribution arose in its capacity as a beneficiary of Charity. Benevolence is not entitled to any franking credit in relation to the distribution from Charity. This means it has no entitlement to a tax offset.

    The following rules also prevent the unintended use of franking credits:

    • specific anti-avoidance rules for eligible organisations
    • franking credit trading rules.

    In addition to the above, the general anti-avoidance rules can apply.

    End of example
      Last modified: 26 Jun 2019QC 59435