Franking accounts

  • The Australian franking account operates on a tax paid basis, which means that if a company pays $30 of Australian tax it would generate a credit of $30 in its franking account.
  • A NZ franking company will be required to keep its franking account in Australian currency.
  • Typically a franking credit would arise when the company pays Australian income tax, or when it receives a franked dividend or when Australian dividend, interest or royalty withholding tax is paid. Franking debits typically arise when a company pays a dividend with Australian franking credits attached, or when it receives a refund of tax.
    Last modified: 07 Oct 2015QC 16903