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Paying dividends and other distributions
Franked distributions can be made by companies and other corporate tax entities that are Australian residents for tax purposes.
New Zealand companies can also choose to enter the Australian imputation system and pay dividends with Australian franking credits attached. Special rules apply to ensure the imputation rules operate appropriately (see Trans-Tasman imputation special rules).
The most common frankable distribution is a dividend paid to company shareholders.
The corporate tax entity uses a franking account to keep track of the amount of tax paid that it can pass on to its members as a franking credit attached to a distribution.
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Franked distributions can be made by companies and other corporate tax entities that are Australian residents, as well as New Zealand companies that have chosen to enter the Australian imputation system.