INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 5 - Franking of dividends  

Subdivision C - Franking deficit tax and deficit deferral tax to offset company tax  

SECTION 160AQK   ENTITLEMENT TO OFFSET  

160AQK(1)   [Amount determined by Commissioner]  

Subject to this Subdivision, where:

(a) a company has become liable to pay:

(i) class A franking deficit tax for a franking year; or

(ii) class B franking deficit tax for a franking year; or

(iia) class C franking deficit tax for a franking year; or

(iii) class A deficit deferral tax in relation to the refund of one or more instalments paid during a franking year; or

(iv) class B deficit deferral tax in relation to the refund of one or more instalments paid during a franking year; or

(v) class C deficit deferral tax in relation to the refund of one or more instalments paid during a franking year;

or any combination of these taxes in respect of the same franking year; and

(b) after the end of the franking year:

(i) the Commissioner serves on the company a notice of an original company tax assessment for an eligible year of income in which the company was sufficiently resident; or

(ii) the Commissioner serves on the company a notice of an amended company tax assessment for an eligible year of income in which the company was sufficiently resident, being an amendment that increases the company tax of the company;

the Commissioner shall determine that the company is entitled to an offset in relation to that company tax or increased company tax equal to the amount specified in the determination, being the lesser of the following amounts:

(c) the sum of the class A franking deficit tax, the class B franking deficit tax, the class C franking deficit tax, the class A deficit deferral tax, the class B deficit deferral tax and the class C deficit deferral tax, reduced by any part of it that has been previously applied under this Subdivision;

(d) the amount of the company tax, or increased company tax, reduced by any foreign tax credits allowable in respect of tax paid or payable by the company in respect of income derived in the eligible year of income.

160AQK(2)   [Reduction in company tax liability]  

Where a company becomes entitled to an offset in relation to company tax or increased company tax, the company's liability to pay that company tax, or increased company tax, shall be reduced by the amount of the offset.

160AQK(3)   [No application to life assurance company]  

This section does not apply to a life assurance company in relation to a liability to pay franking deficit tax or deficit deferral tax for a franking year that ends on or after 4 May 1999.