Eligible organisations apply for a refund of franking credits annually on the Application for refund of franking credits – Endorsed income tax exempt entities and deductible gift recipients 2013.
In June of each year, we send a personalised refund application form to eligible organisations that applied for and received a refund in the previous financial year.
Obtain a copy of the Application for refund of franking credits: NFP endorsed entities 2012 - 2013.
Paying the refund directly into your account
Yes, if you complete the electronic funds transfer (EFT) section of the application form, we deposit your refund directly into an Australian bank, credit union or building society account of your choice. It is faster to have your refund paid directly to your financial institution account.
We do not issue refunds to a trustee’s personal bank account. Direct deposit is not available on all financial accounts. If you are unsure, check with your financial institution.
If your organisation has outstanding tax liabilities
If your non-profit organisation has any outstanding tax liabilities or other debts that are collected by us, the amount of refund claimed will be offset against those tax liabilities and debts. The amount of any remaining franking credits will then be refunded to your organisation.
Limits on claiming refunds
Rules apply to prevent an eligible organisation from receiving a franking credit on a distribution which is attributable to a franked dividend received through another eligible organisation.
A charitable trust, Charity, is an eligible organisation. It is paid a fully franked dividend of $5,000. It claims and receives a franking credit of $2,575. It then distributes the franked dividend of $5,000 to its beneficiary, Benevolence, another charitable trust that is an eligible organisation. Benevolence receives the franked dividend in its capacity as a beneficiary of Charity. Therefore, Benevolence is not eligible to claim the franking credit because Charity was entitled to claim it. This applies whether or not Charity claims the franking credit.End of example
The following rules also prevent the unintended use of franking credits:
- specific anti-avoidance rules for eligible organisations
- franking credit trading rules
- general anti-avoidance rules.