How it works
A NZ resident company gives notice to us that it wishes to be part of the Australian imputation system (making a franking choice).
A NZ company that makes this choice will be known as a NZ franking company.
Generally, that company will be subject to Australian imputation rules as they apply to an Australian company.
However, there are special rules for a NZ company to ensure the Australian imputation rules operate appropriately and to preserve the integrity of the Australian imputation system.
How does a NZ resident company make a franking choice?
Lodge a Trans-Tasman imputation election form with us at least one month before making any franked distributions.
Generally, the choice comes into force at the start of the company's income year in which the notice is given to us. This will allow credits to arise in the franking account from the start of the income year.
If the NZ company does not have an Australian tax file number (TFN) this will be issued by us.
When will a franking choice apply?
A NZ company can choose to maintain an Australian franking account from 1 April of a particular year. To do this, they must make a franking choice by the end of the income year following the income year which includes 1 April of that year.
In later income years, the franking choice will generally be in force from the start of the income year in which the franking choice is made. Unless we have previously approved some other accounting period, the start of the income year for the NZ company will be 1 July.
A NZ franking company can only start to frank a distribution with Australian franking credits one month after it has made the franking choice.