At the end of an income year, a corporate tax entity with a deficit balance in its franking account is liable to pay franking deficit tax (FDT).
A franking account tax return must be completed and any FDT liability paid by the last day of the month immediately following the end of the corporate tax entity's income year.
If a refund of income tax for an income year is received within three months of the end of that income year, the refund will be treated as though it had been received just before the end of the income year for the purposes of calculating FDT. This may result in an FDT liability where previously there had been none, or an increased FDT liability.
In these circumstances, the franking account tax return or amended franking account tax return is generally due to be lodged and any FDT liability must be paid no more than 14 days after the day the refund is received in relation to that income year.