• Franking period

    A private company has a single franking period, which is the same as its income year for other tax purposes – typically, 1 July to 30 June.

    For a corporate tax entity that is not a private company, the franking period depends on the length of its income year:

    • Income year less than 6 months – the franking period is the same as its income year.
    • Income year more than 6 months but less than 12 months – the first franking period is the first 6 months beginning at the start of the entity's income year and the second is the remainder of the income year.
    • Income year of 12 months – the first franking period is the first 6 months beginning at the start of the entity's income year and the second franking period is the remainder of the income year.
    • Income year more than 12 months – the first franking period is the first 6 months beginning at the start of the entity's income year, the second is the next 6 months beginning immediately after the first franking period, and the third franking period is the remainder of the income year.

    The franking period is different for an early or late balancing corporate tax entity. An early or late balancing corporate tax entity is one that has obtained the Commissioner of Taxation's permission to use an approved substituted accounting period (SAP), which is in lieu of an income year ending on 30 June.

    Example: Early balancing company

    Sav Ltd is a public company. It obtained the Commissioner's approval to have its income year start on 1 April and end on 31 March. Sav Ltd is an early balancing company. This means that Sav Ltd's income year would end on 31 March in lieu of the following 30 June.

    Using the general franking period rules, Sav Ltd’s franking periods would be:

    • 1st franking period 1 April to 30 September

    2nd franking period 1 October to 31 March.

    End of example

     

    Example: Late balancing company

    Marlyn Ltd is a public company. It obtained the Commissioner's approval to have its income year start on 1 October and end on 30 September. Marlyn Ltd is a late balancing company. This means that Marlyn Ltd's income year would end on 30 September in lieu of the preceding 30 June.

    Using the general franking period rules, Marilyn Ltd’s franking periods would be:

    • 1st franking period 1 October to 31 March
    • 2nd franking period 1 April to 30 September.
    End of example
    Last modified: 01 Dec 2016QC 47307