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Paying dividends and other distributions

Explains franking accounts, franked distributions (dividends), allocating franking credits, returns and statements.

Last updated 30 November 2016

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.

Find out about:

Read how franking accounts record the amount of tax paid on franking credits.

Explains the requirements to attach franking credits to a distribution.

Check the corporate tax rate for imputation purposes, correct distributions and working out the maximum franking credit.

Work out when a franking account tax return must be lodged.

The franking entity must issue a distribution statement to each member who receives a distribution.