INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 1 - Interpretation  

SECTION 160APA   160APA   INTERPRETATION  
In this Part, unless the contrary intention appears:

accountable interest
, in relation to shares in a company, has the meaning given by section 160APHBD .

accountable share
, in relation to a company, has the meaning given by section 160APHBC .

"adjusted amount"
, in relation to another amount (in this definition called the ``basic amount''), means the amount calculated in accordance with the formula:

Graphic

where:

BA is the basic amount; and

CR is the applicable general company tax rate;

AD/RLA component
has the same meaning as in Division 8 of Part III (as in force immediately before 1 July 2000).

"amended assessment"
does not include an assessment that would not be an amended assessment except for section 171 ;

"amended company tax assessment"
means an amended assessment of company tax;

"applicable general company tax rate"
means:


(a) in relation to:


(i) (Omitted by No 216 of 1991)

(iaa) the paying of an instalment by a company in respect of a year of income under section 221AZK ;

(iab) the making of any other payment by a company in respect of a year of income under Division 1C of Part VI ;

(iaba) a payment of a PAYG instalment in respect of a year of income;

(iabb) the application of a PAYG instalment variation credit to reduce a person's liability for a PAYG instalment in respect of a year of income;

(iabc) a payment of company tax in respect of a year of income;

(iabd) a claim for a PAYG instalment variation credit in respect of a year of income;

(iac) the payment of a refund to a company in respect of a year of income under Division 1C of Part VI ;

(iad) the payment of a refund to a company of an amount paid by the company in respect of a year of income where the refund is covered by section 160APY or 160APYA ;

(iae) the crediting by the Commissioner of an amount paid by a company in respect of a year of income where the crediting is covered by section 160APYA ;

(ia) the making of an initial payment of tax by a company in respect of a year of income under section 221AP ;

(ib) the making of any further payment by a company on account of company tax in respect of a year of income under Division 1B of Part VI;

(iba) the payment of a final payment of tax in respect of a year of income under section 221AZD ;

(ibb) the making of a payment by a company of, or on account of, company tax in respect of a year of income where the payment is covered by section 160APMD;

(ic) the payment of a refund to a company in respect of a year of income under Division 1B of Part VI ;

(id) the payment of a refund to a company of an amount paid by the company in respect of a year of income where the refund is covered by section 160APYBA;

(ie) the application by the Commissioner of an amount paid by a company in respect of a year of income where the application is covered by section 160APYBA;

(iea) the payment of a refund of a PAYG instalment or company tax in respect of a year of income;

(ii) an amended assessment of the company tax payable by a company for a year of income;

(iii) a foreign tax credit allowable in respect of tax paid or payable by a company in respect of income derived in a year of income;

(iv) the calculation of a venture capital debit under section 160ASEH in relation to a year of income;
the general company tax rate for the year of tax to which the year of income relates;


(aa) in relation to an amount calculated for a year of income using a formula in any of the following provisions:


(i) sections 160APVBA to 160APVD (inclusive);

(ii) sections 160AQCD to 160AQCL (inclusive);
the general company tax rate for the year of tax to which the year of income relates;


(ab) in relation to the class C franking credit that arises under section 160APVP on the payment of venture capital deficit tax by a PDF in respect of a franking year - the general company tax rate used to work out the amount of the venture capital deficit tax;


(b) in relation to the liability of a company to pay class A franking deficit tax or a class A deficit deferral tax - 39%;


(ba) in relation to the liability of a company to pay class B franking deficit tax or a class B deficit deferral tax - 33%;


(baa) in relation to the liability of a company to pay class C franking deficit tax or a class C deficit deferral tax - 30%;


(bb) in relation to the calculation of the adjusted amount in relation to an amount mentioned in paragraph 160APYC(a), (b) or (c) - the applicable general company tax rate in relation to the initial payment of tax concerned;


(bc) in relation to the calculation of the adjusted amount in relation to the amount of a payment mentioned in section l60APQA, being a payment that relates to an offset of company tax, or increased company tax, for a year of income - the general company tax rate for the year of tax to which the year of income relates;


(bd) in relation to the amount of a class C franking credit or franking debit calculated in respect of a payment of a company tax instalment or company tax, or the application of a PAYG variation credit, in respect of a year of income under any of the following provisions:


(i) section 160APVJ ;

(ii) section 160APVK ;

(iii) section 160APVL ;

(iv) section 160APVM ;

(v) section 160AQCNCF ;

(vi) section 160AQCNCG ;

(vii) section 160AQCNCH ;

(viii) section 160AQCNCI ;
the general company tax rate for the year of tax to which the year of income relates;


(be) in relation to the amount of a class A franking credit or franking debit calculated in respect of a payment of a company tax instalment or company tax, or the application of a PAYG variation credit, in respect of a year of income under any of the following provisions:


(i) section 160AQCNCF ;

(ii) section 160AQCNCG ;

(iii) section 160AQCNCH ;

(iv) section 160AQCNCI ;
39%;


(bf) in relation to an amount calculated in respect of an assessment of company tax in respect of a year of income for the purposes of section 160AQCNCC - the general company tax rate for the year of tax to which the year of income relates;


(bg) in relation to the amount of a class C franking credit or franking debit calculated in respect of an amended assessment of company tax in respect of a year of income for the purposes of section 160AQCNCD , 160AQCNCH or 160AQCNCI - the general company tax rate for the year of tax to which the year of income relates;


(bh) in relation to the amount of a class A franking credit or franking debit calculated in respect of an amended assessment of company tax in respect of a year of income for the purposes of section 160AQCNCD , 160AQCNCH or 160AQCNCI - 39%;


(c) in relation to:


(i) the payment of a class A franked dividend to a shareholder in a company; or

(ii) a trust amount or partnership amount that relates, directly or indirectly, to the payment of a class A franked dividend to a shareholder in a company;
39%; or


(ca) in relation to:


(i) the payment of a class B franked dividend to a shareholder in a company; or

(ii) a trust amount or partnership amount that relates, directly or indirectly, to the payment of a class B franked dividend to a shareholder in a company;
33%; or


(cb) in relation to:


(i) the payment of a class C franked dividend to a shareholder in a company; or

(ii) a trust amount or partnership amount that relates, directly or indirectly, to the payment of a class C franked dividend to a shareholder in a company;
30%.

"approved form"
means a form approved, in writing, by the Commissioner for the purposes of the provision in which the expression occurs;

"arrangement"
means:


(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings; and


(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise;

arrangement

has the same meaning as in the Income Tax Assessment Act 1997 .

associate
has the same meaning as in section 318 .

"borrower"
, in relation to a securities lending arrangement, has the meaning given by subsection 26BC(3) ;

"borrowing period"
, in relation to a securities lending arrangement, has the meaning given by subsection 26BC(3) ;

"buy-back"
has the same meaning as in Division 16K of Part III ;

"class A deficit deferral tax"
means tax payable in accordance with section 160AQJA ;

class A exempted amount
, in relation to a dividend, means so much of the dividend as has been franked in accordance with subsection 160AQFA(1) .

class A exempted dividend
means a dividend to the extent (if any) to which it has been franked in accordance with subsection 160AQFA(1) .

class A exempting account balance
, in relation to a former exempting company, means:


(a) if the company has a class A exempting surplus - the amount of the surplus; or


(b) if the company has a class A exempting deficit - the amount of the deficit; or


(c) otherwise - nil.

class A exempting deficit
means a deficit calculated under subsection 160AQCND(3) .

class A exempting surplus
means a surplus calculated under subsection 160AQCND(1) .

"class A flow-on franking amount"
means an amount that would be a flow-on franking amount if:


(a) a reference in the definition of ``flow-on franking amount'' to a franked dividend were, by express provision, confined to a class A franked dividend; and


(b) a reference in that definition to the flow-on franking amount were, by express provision, confined to a class A flow-on franking amount;

"class A franked amount"
, in relation to a dividend, means so much of the dividend as has been franked in accordance with subsection 160AQF(1) ;

class A franked dividend
means a dividend to the extent (if any) to which it has been franked in accordance with subsection 160AQF(1) .

"class A franking account assessment"
means the ascertainment of the class A franking account balance and of any class A franking deficit tax payable;

"class A franking account balance"
, in relation to a company, means:


(a) if the company has a class A franking surplus - the amount of that surplus; or


(b) if the company has a class A franking deficit - the amount of that deficit; or


(c) in any other case - nil;

"class A franking deficit"
means a deficit calculated under subsection 160APJ(2) ;

"class A franking deficit tax"
means tax payable in accordance with subsection 160AQJ(1) ;

"class A franking percentage"
means:


(a) in relation to a class A franked dividend - the percentage specified in the declaration made under subsection 160AQF(1) in relation to the dividend; or


(b) in relation to a dividend (including a dividend that is not a frankable dividend) no part of which has been franked in accordance with subsection 160AQF(1) - 0%;

"class A franking surplus"
means a surplus calculated under subsection 160APJ(1) ;

"class A potential rebate amount"
means an amount that would be a potential rebate amount if:


(a) each reference in the definition of ``potential rebate amount'' to a franked dividend were, by express provision, confined to a class A franked dividend; and


(b) each reference in that definition to a flow-on franking amount were, by express provision, confined to a class A flow-on franking amount; and


(c) each reference in that definition to a potential rebate amount were, by express provision, confined to a class A potential rebate amount;

"class B deficit deferral tax"
means tax payable in accordance with section 160AQJB ;

"class B flow-on franking amount"
means an amount that would be a flow-on franking amount if:


(a) a reference in the definition of ``flow-on franking amount'' to a franked dividend were, by express provision, confined to a class B franked dividend; and


(b) a reference in that definition to the flow-on franking amount were, by express provision, confined to a class B flow-on franking amount;

"class B franked amount"
, in relation to a dividend, means so much of the dividend as has been franked in accordance with subsection 160AQF(1AA) ;

"class B franked dividend"
means a dividend the whole or a part of which has been franked in accordance with subsection 160AQF(1AA) ;

"class B franking account assessment"
means the ascertainment of the class B franking account balance and of any class B franking deficit tax payable;

"class B franking account balance"
, in relation to a company, means:


(a) if the company has a class B franking surplus - the amount of that surplus; or


(b) if the company has a class B franking deficit - the amount of that deficit; or


(c) in any other case - nil;

"class B franking deficit"
means a deficit calculated under subsection 160APJ(3) ;

"class B franking deficit tax"
means tax payable in accordance with subsection 160AQJ(1A) ;

"class B franking percentage"
means:


(a) in relation to a class B franked dividend - the percentage specified in the declaration made under subsection 160AQF(1AA) in relation to the dividend; or


(b) in relation to a dividend (including a dividend that is not a frankable dividend) no part of which has been franked in accordance with subsection 160AQF(1AA) - 0%;

"class B franking surplus"
means a surplus calculated under subsection 160APJ(1A) ;

"class B potential rebate amount"
means an amount that would be a potential rebate amount if:


(a) each reference in the definition of ``potential rebate amount'' to a franked dividend were, by express provision, confined to a class B franked dividend; and


(b) each reference in that definition to a flow-on franking amount were, by express provision, confined to a class B flow-on franking amount; and


(c) each reference in that definition to a potential rebate amount were, by express provision, confined to a class B potential rebate amount;

class C conversion time
has the meaning given by section 160ASF .

class C deficit deferral tax
means tax payable in accordance with section 160AQJC .

class C exempted amount
, in relation to a dividend, means so much of the dividend as has been franked in accordance with subsection 160AQFA(2) .

class C exempted dividend
means a dividend to the extent (if any) to which it has been franked in accordance with subsection 160AQFA(2) .

class C exempting account balance
, in relation to a former exempting company, means:


(a) if the company has a class C exempting surplus - the amount of the surplus; or


(b) if the company has a class C exempting deficit - the amount of the deficit; or


(c) otherwise - nil.

class C exempting deficit
means a deficit calculated under subsection 160AQCND(4) .

class C exempting surplus
means a surplus calculated under subsection 160AQCND(2) .

class C flow-on franking amount
means an amount that would be a flow-on franking amount if:


(a) a reference in the definition of flow-on franking amount to a franked dividend were, by express provision, confined to a class C franked dividend; and


(b) a reference in that definition to the flow-on franking amount were, by express provision, confined to a class C flow-on franking amount.

class C franked amount
, in relation to a dividend, means so much of the dividend as has been franked in accordance with subsection 160AQF(1AAA) .

class C franked dividend
means a dividend to the extent (if any) to which it has been franked in accordance with subsection 160AQF(1AAA) .

class C franking account assessment
means:


(a) the ascertainment of the class C franking account balance and of any class C franking deficit tax payable; or


(b) the ascertainment of the venture capital sub-account balance within the class C franking account and of any venture capital deficit tax payable.

class C franking account balance
, in relation to a company, means:


(a) if the company has a class C franking surplus - the amount of that surplus; or


(b) if the company has a class C franking deficit - the amount of that deficit; or


(c) in any other case - nil.

class C franking deficit
means a deficit calculated under subsection 160APJ(4) .

class C franking deficit tax
means tax payable in accordance with subsection 160AQJ(1B) .

class C franking percentage
means:


(a) in relation to a class C franked dividend - the percentage specified in the declaration made under subsection 160AQF(1AAA) in relation to the dividend; or


(b) in relation to a dividend (including a dividend that is not a frankable dividend) no part of which has been franked in accordance with subsection 160AQF(1AAA) - 0%.

class C franking surplus
means a surplus calculated under subsection 160APJ(1B) .

class C potential rebate amount
means an amount that would be a potential rebate amount if:


(a) each reference in the definition of potential rebate amount to a franked dividend were, by express provision, confined to a class C franked dividend; and


(b) each reference in that definition to a flow-on franking amount were, by express provision, confined to a class C flow-on franking amount; and


(c) each reference in that definition to a potential rebate amount were, by express provision, confined to a class C potential rebate amount.

"committed future dividends"
, in relation to a company at a particular time (in this definition called the ``current time'' ) in a franking year, means:


(a) frankable dividends in respect of which the following conditions are satisfied at the current time:


(i) the amount of the dividends is fixed;

(ii) the rights to be paid the dividends are set out in the company's constituent document;

(iii) the dividends are to be paid after the current time and before the end of the franking year to shareholders in the company; or


(b) frankable dividends that, under a resolution made before or at the current time, are to be paid before the end of the franking year to shareholders in the company, other than dividends having a reckoning day before the current time;

"company tax"
means tax assessed on the taxable income of a company;

company tax instalment
means:


(a) an instalment, or other amount, payable under Division 1C of Part VI ; or


(b) a PAYG instalment.

company with higher tax shareholders
, in relation to a tainted share capital account, means a company that is not a company with only lower tax shareholders in relation to the account.

company with only lower tax shareholders
, in relation to a tainted share capital account, means a company whose only shareholders were:


(a) other companies (other than life assurance companies or registered organisations); or


(b) non-residents; or


(c) other companies (other than life assurance companies or registered organisations) and non-residents;

throughout the period beginning when the share capital account most recently became tainted under section 160ARDM and ending when the company makes an election under section 160ARDR or 160ARDW to untaint the account.

"corporate trust dividend"
means a unit trust dividend within the meaning of Division 6B or 6C of Part III;

"corporate trust estate"
means a prescribed trust estate within the meaning of Division 6B or 6C of Part III;

CS/RA component
has the same meaning as in Division 8 of Part III (as in force immediately before 1 July 2000).

"current corporate trust"
, in relation to a year of income, means:


(a) a corporate unit trust in relation to the year of income for the purposes of Division 6B of Part III ; or


(b) a public trading trust in relation to the year of income for the purposes of Division 6C of Part III ;

"data processing device"
means any article or material from which information is capable of being reproduced with or without the aid of any other article or device;

"deficit deferral amount"
means a class A deficit deferral amount (see subsection160AQJA(2)), a class B deficit deferral amount (see subsection 160AQJB(2) ) or a class C deficit deferral amount (see subsection 160AQJC(2) ).

"deficit deferral tax"
means class A deficit deferral tax, class B deficit deferral tax or class C deficit deferral tax.

"deficit deferral tax assessment"
means the ascertainment, under section 160ARHA or 160ARK , of deficit deferral tax payable by a company;

"director"
, in relation to a company, includes any person occupying or acting in the position of director of the company, by whatever name called and whether or not validly appointed to occupy, or duly authorised to act in, the position;

"dividend statement"
means a statement under section 160AQH , 160AQUB , 160AQUC or 160AQUD ;

"dividend streaming arrangement"
, in relation to a company (in this definition called the ``first company'' ), means an arrangement where the first company entered into or carried out the arrangement or any part of the arrangement and either:


(a) both of the following conditions are satisfied:


(i) a shareholder in another company (the ``target shareholder'' ) is empowered (either unconditionally or on the fulfilment of a condition) to exercise any choice or selection;

(ii) the exercise of the choice or selection, or the failure to exercise the choice or selection, has the effect of determining, to any extent, whether the first company will pay one or more franked dividends to a shareholder in the first company, being an upstream entity in relation to the target shareholder, in substitution, in whole or in part, for the payment, or proposed payment, by that other company of one or more unfranked dividends to the target shareholder; or


(b) both of the following conditions are satisfied:


(i) a shareholder in the first company (the ``first shareholder'' ) is empowered (either unconditionally or on the fulfilment of a condition) to exercise any choice or selection;

(ii) the exercise of the choice or selection, or the failure to exercise the choice or selection, has the effect of determining, to any extent, any or all of the following:

(A) whether the first company will pay an unfranked dividend or a partly franked dividend (which unfranked dividend or partly franked dividend is in this sub-subparagraph called the ``scheme dividend'' ) to the first shareholder in substitution, in whole or in part, for the payment, or proposed payment, of one or more franked dividends, being dividends whose actual or proposed franking percentage exceeds the franking percentage of the scheme dividend;

(AA) whether the first company will pay an unfranked dividend or a partly franked dividend (which unfranked dividend or partly franked dividend is in this sub-subparagraph called the ``scheme dividend'' ) to another shareholder in the first company, being an upstream entity in relation to the first shareholder, in substitution, in whole or in part, for the payment, or proposed payment, to the first shareholder of one or more franked dividends, being dividends whose actual or proposed franking percentage exceeds the franking percentage of the scheme dividend;

(B) whether the first company will issue one or more tax-exempt bonus shares to the first shareholder in substitution, in whole or in part, for the payment, or proposed payment, of one or more franked dividends;

(BA) whether the first company will issue one or more tax-exempt bonus shares to another shareholder in the first company, being an upstream entity in relation to the first shareholder, in substitution, in whole or in part, for the payment, or proposed payment, to the first shareholder of one or more franked dividends;

(C) whether another company will pay an unfranked dividend or a partly franked dividend to a shareholder in that other company in substitution, in whole or in part, for the payment, or proposed payment, by the first company of one or more franked dividends to the first shareholder;

(D) whether the first company will pay one or more franked dividends to the first shareholder in substitution, in whole or in part, for the payment, or proposed payment, by another company of one or more unfranked dividends to a shareholder in that other company;

effectively owned by prescribed persons
has the meaning given by section 160APHBB .

eligible continuing substantial shareholder
has the meaning given by section 160APHBJ .

eligible employee share scheme
: the question whether a share was acquired under an eligible employee share scheme is to be determined in accordance with section 160APHBH .

"eligible year of income"
means the year of income commencing on 1 July 1986 or a subsequent year of income;

entity
has the same meaning as in the Income Tax Assessment Act 1997 .

"estimated class A debit"
means an estimated class A debit specified in an estimated class A debit determination;

"estimated class A debit determination"
means a determination made by the Commissioner under subsection 160AQD(1) ;

"estimated class B debit"
means an estimated class B debit specified in an estimated class B debit determination;

"estimated class B debit determination"
means a determination made by the Commissioner under subsection 160AQDA(1);

estimated class C debit
means an estimated class C debit specified in, an estimated class C debit determination.

estimated class C debit determination
means a determination made by the Commissioner under subsection 160AQDAA(1) .

estimated debit
means:


(a) an estimated class A debit; or


(b) an estimated class B debit; or


(c) an estimated class C debit; or


(d) an estimated venture capital debit.

estimated debit determination
means:


(a) an estimated class A debit determination; or


(b) an estimated class B debit determination; or


(c) an estimated class C debit determination; or


(d) an estimated venture capital debit determination.

estimated venture capital debit
means an estimated venture capital debit specified in an estimated venture capital debit determination.

estimated venture capital debit determination
means a determination made by the Commissioner under section 160ASEK .

exempted amount
, in relation to a dividend, means so much of the dividend as has been franked in accordance with section 160AQFA .

exempted dividend
means a dividend to the extent (if any) to which it has been franked in accordance with section 160AQFA .

exempting company
has the meaning given by section 160APHBA .

exempting credit
means a class A exempting credit or a class C exempting credit.

exempting debit
means a class A exempting debit or a class C exempting debit.

exempt institution
means an entity whose ordinary and statutory income (within the meaning of the Income Tax Assessment Act 1997 ) are exempt from income tax because of Division 50 of that Act.

finance arrangement
has the same meaning as in section 45ZA .

fixed trust
has the same meaning as in Schedule 2F.

"flow-on franking amount"
means:


(a) in relation to a trust amount - so much of the trust amount as is attributable to:


(i) a franked dividend included in the assessable income of the trust estate;

(ii) the flow-on franking amount in relation to another trust amount included in the assessable income of the trust estate; or

(iii) the flow-on franking amount in relation to a partnership amount that is included in, or allowed as a deduction from, the assessable income of the trust estate; and


(b) in relation to a partnership amount - so much of the partnership amount as is attributable to:


(i) a franked dividend included in the assessable income of the partnership; or

(ii) the flow-on franking amount in relation to a trust amount included in the assessable income of the partnership;

"foreign tax credit"
means a credit within the meaning of Division 19 of Part III ;

former exempting company
has the meaning given by section 160APHBE .

"frankable dividend"
means:


(a) a dividend within the meaning of section 6 ; or


(aaa) a non-share dividend; or


(aa) a share that is taken to be a dividend under subsection 6BA(5) ; or


(b) a distribution that is deemed to be a dividend by subsection 47(1) otherwise than by the operation of subsection 47(2A) ; or


(ba) if any of the purchase price in respect of the buy-back of a share is taken by section 159GZZZP to be a dividend:


(i) where the purchase price exceeds the amount that would be the market value of the share at the time of the buy-back if the buy-back did not take place and was never proposed to take place - the amount that is taken to be a dividend, reduced by the amount of the excess; or

(ii) in any other case - the amount that is taken to be a dividend; or


(bb) an amount that is taken to be a dividend under section 375-872 of the Income Tax Assessment Act 1997 (which is about film licensed investment companies);

being in any case a dividend paid by a company to a shareholder on or after 1 July 1987, but does not include any of the following:


(c) a dividend for which the reckoning day is before 1 July 1987;


(d) a dividend for which a deduction is allowable under section 120 ;


(e) a dividend to which paragraph 24J(2)(a) applies that is deemed by section 24J to be derived from sources in a prescribed Territory (as defined in paragraph 24BB(a));


(f) a dividend that is paid in respect of a non-equity share;


(g) a dividend that is taken by subsection 46M(3) or paragraph 46M(4)(a) not to be a frankable dividend;


(ga) a non-share dividend that is taken by section 160APAAAA not to be a frankable dividend;


(gb) a non-share dividend that is taken by section 160APAAAB not to be a frankable dividend;


(h) an amount taken to be a dividend under Division 7A of Part III .

"franked amount"
, in relation to a dividend, means so much of the dividend as has been franked in accordance with section 160AQF ;

franked dividend
means a dividend to the extent (if any) to which it has been franked in accordance with section 160AQF .

"franking account assessment"
means a class A franking account assessment, a class B franking account assessment or a class C franking account assessment.

"franking account balance"

"franking additional tax"
means additional tax payable under Division 11;

"franking additional tax assessment"
means the ascertainment of franking additional tax;

"franking assessment"
means:


(a) a franking account assessment; or


(b) a franking additional tax assessment; or


(c) a deficit deferral tax assessment;

"franking credit"
means a class A franking credit, a class B franking credit or a class C franking credit.

"franking debit"
means a class A franking debit, a class B franking debit or a class C franking debit.

"franking deficit"

franking deficit tax
means:


(a) class A franking deficit tax; or


(b) class B franking deficit tax; or


(c) class C franking deficit tax; or


(d) venture capital deficit tax.

franking percentage
means:


(a) in relation to a franked dividend - the sum of:


(i) the class A franking percentage of the dividend; and

(ii) the class B franking percentage of the dividend; and

(iii) the class C franking percentage of the dividend; or


(b) in relation to an unfranked dividend - 0%.

"franking surplus"

"franking year"
, in relation to a company, means:


(a) if the Commissioner determines under section 160APH that a period is to be treated as a franking year in relation to the company - that period;


(b) if paragraph (a) does not apply and the company is an early balancing company for the purposes of subsection 221AB(1) - the substituted instalment period referred to in that subsection; or


(c) in any other case - a financial year;

"general company tax rate"
means the rate of tax imposed on taxable incomes of companies, other than companies that are registered organizations, life assurance companies or companies that are PDFs throughout the last day of the year of income;

general fund component
has the same meaning as in Division 8 of Part III (as in force immediately before 1 July 2000).

"insurance funds"

interest
, in relation to shares or other property, has the meaning given by section 160APHD .

"lender"
, in relation to a securities lending arrangement, has the meaning given by subsection 26BC(3) ;

"liability reduction action"
, in relation to a company, means action seeking a reduction in an amount of company tax;

"life assurance company"

member of the same effectively wholly-owned group of companies
has the meaning given by section 160APHBI .

"mutual life assurance company"

NCS component
has the same meaning as in Division 8 of Part III (as in force immediately before 1 July 2000).

"non-fund component"

"off-market purchase"
has the same meaning as in Division 16K of Part III ;

"offset"
means an amount applied in accordance with Subdivision C of Division 5 in reduction of company tax payable by a company;

"offset determination"
means a determination under Subdivision C of Division 5 of the entitlement of a company to an offset;

"on-market purchase"
has the same meaning as in Division 16K of Part III ;

"ordinary assessment"
means an assessment under this Act other than this Part;

"ordinary return"
means a return under this Act other than this Part;

"original assessment date"
means:


(a) in relation to a franking assessment other than an amended assessment - the day on which the assessment was made; and


(b) in relation to a franking assessment that is the first or a subsequent amendment of an assessment to which paragraph (a) applies - the day on which the original assessment was made;

"original company tax assessment"
means an assessment, other than an amended assessment, of company tax;

"paid"

"partly franked dividend"
means a dividend only part of which has been franked in accordance with section 160AQF ;

"partnership amount"
means an amount included in, or allowed as a deduction from, the assessable income of a partner under section 92 ;

pay
, in relation to a PAYG instalment or company tax, has the meaning given by section 160APBB .

PAYG instalment
has the same meaning as in the Income Tax Assessment Act 1997 .

PAYG instalment variation credit
means a credit under section 45-215 or 45-420 in Schedule 1 to the Taxation Administration Act 1953 .

"PAYG rate variation credit"

"potential rebate amount"
means:


(a) in relation to a trust amount (in this paragraph called the ``current trust amount'' ):


(i) where the flow-on franking amount in relation to the current trust amount is attributable to a franked dividend included in the assessable income of the trust estate - the amount calculated in accordance with the formula:


PR   × CF
TF


where:
  • CF is the number of dollars in the flow-on franking amount in relation to the current trust amount;
  • PR is the amount included in the assessable income of the trust estate under section 160AQT in relation to the franked dividend; and
  • TF is the number of dollars in so much of the net income of the trust estate as is attributable to the franked dividend;

  • (ii) where the flow-on franking amount in relation to the current trust amount is attributable to the flow-on franking amount in relation to another trust amount (in this subparagraph called the ``earlier trust amount'' ) - the amount calculated in accordance with the formula:


    EPR   × CF
    TF


    where:
  • CF is the number of dollars in the flow-on franking amount in relation to the current trust amount;
  • EPR is the potential rebate amount in relation to the earlier trust amount; and
  • TF is the number of dollars in so much of the net income of the trust estate as is attributable to the flow-on franking amount in relation to the earlier trust amount; or

  • (iii) where the flow-on franking amount in relation to the current trust amount is attributable to the flow-on franking amount in relation to a partnership amount - the amount calculated in accordance with the formula:


    PR   × CF
    TF


    where:
  • CF is the number of dollars in the flow-on franking amount in relation to the current trust amount;
  • PR is the potential rebate amount in relation to the partnership amount; and
  • TF is the number of dollars in so much of the net income of the trust estate as is attributable to the flow-on franking amount in relation to the partnership amount; or

  • (b) in relation to a partnership amount:


    (i) where the flow-on franking amount in relation to the partnership amount is attributable to a franked dividend included in the assessable income of the partnership - the amount calculated in accordance with the formula:


    PR   × CF
    TF


    where:
  • CF is the number of dollars in the flow-on franking amount in relation to the partnership amount;
  • PR is the amount included in the assessable income of the partnership under section 160AQT in relation to the franked dividend; and
  • TF is the number of dollars in so much of the net income of the partnership or of the partnership loss as is attributable to the franked dividend; or

  • (ii) where the flow-on franking amount in relation to the partnership amount is attributable to the flow-on franking amount in relation to a trust amount - the amount calculated in accordance with the formula:


    PR   × CF
    TF


    where:
  • CF is the number of dollars in the flow-on franking amount in relation to the partnership amount;
  • PR is the potential rebate amount in relation to the trust amount; and
  • TF is the number of dollars in so much of the net income of the partnership or of the partnership loss as is attributable to the flow-on franking amount in relation to the trust amount;
  • prescribed person
    has the meaning given by section 160APHBF or 160APHBG .

    qualifying SME investment
    means an SME investment that is made in accordance with Division 1 of Part 4 of the Pooled Development Funds Act 1992 .

    RBA
    has the same meaning as in Part IIB of the Taxation Administration Act 1953 .

    "reckoning day"
    , in relation to a dividend paid to a shareholder in a company, means:


    (a) if the dividend is paid under a resolution under which other dividends are payable to shareholders in the company - the day on which the first dividend is paid under that resolution; or


    (b) in any other case - the day on which the dividend is paid;

    refund
    , in relation to a company tax instalment or company tax, has the meaning given by section 160APBD .

    "registered organization"
    has the same meaning as in Division 8A of Part III ;

    "resident trust estate"
    , in relation to a year of income, means a trust estate that is a resident unit trust in relation to the year of income for the purposes of Division 6B or 6C of Part III;

    "resolution"
    , in relation to the payment of dividends to a shareholder in a company, means:


    (a) an authorisation;


    (b) a declaration;


    (c) a resolution; or


    (d) an agreement;

    given or made by:


    (e) the company; or


    (f) all or any of the directors of the company;

    in accordance with the rules governing the payment of dividends by the company, that those dividends be paid;

    "scheme"
    has the same meaning as in section 177A ;

    section 124ZZB SME assessable income
    for a PDF for a year of income is the assessable income allocated to the PDF's SME assessable income for the year of income under section 124ZZB .

    "securities dealer"
    has the same meaning as in section 202A ;

    "securities lending arrangement"
    means an agreement covered by subsection 26BC(3) ;

    shareholders' funds income
    , in relation to a year of income, means income that is:


    (a) derived in that year of income; and


    (b) included in the shareholders' funds of the company on or before the day on which the company's company tax in respect of that year of income is assessed.

    SME investment
    has the same meaning as in section 124ZS .

    "special life company tax rate"
    means the rate of tax specified in paragraph 23(4A)(b) of the Income Tax Rates Act 1986 ;

    standard component
    has the same meaning as in Division 8 of Part III (as in force immediately before 1 July 2000).

    tainted share capital account
    means a share capital account that is tainted under section 160ARDM .

    tainting amount
    means the sum of:


    (a) the amount transferred to a company's share capital account when the share capital account most recently became tainted under section 160ARDM ; and


    (b) if the company subsequently transferred one or more further amounts to its share capital account - that further amount or those further amounts.

    "taxation officer"
    means a person exercising powers, or performing functions under, pursuant to or in relation to this Act or the regulations;

    tax-exempt bonus share
    , in relation to a company, means a share issued by the company in the circumstances mentioned in subsection 6BA(1) .

    "termination time"
    means:


    (a) in relation to the taking of liability reduction action by a company:


    (i) if the action is a request for consideration of a matter by a particular court or tribunal:

    (A) if proceedings in relation to the matter terminate in a manner favourable to the company - the time of service by the Commissioner of a notice of an assessment or determination made by the Commissioner giving effect to the determination of the matter by that court or tribunal; or

    (B) in any other case - the time when that matter is determined by that court or tribunal; or

    (ii) if the action is a request for consideration of a matter by the Commissioner:

    (A) if the Commissioner makes a decision on the matter in a manner favourable to the company - the time of service by the Commissioner of a notice of an assessment or determination made by the Commissioner giving effect to the Commissioner's decision on the matter; or

    (B) in any other case - the time of service by the Commissioner of a notice of the Commissioner's decision on that matter;


    (aa) in relation to the payment of a company tax instalment that is not a PAYG instalment in respect of a year of income - the earlier of:


    (i) the time at which the company receives an amount as a refund of that payment under section 221AZL or 221AZQ ; and

    (ii) whichever of the following is applicable:

    (A) if the company is required to make a payment under section 221AZT in respect of the year of income - the day on which that payment is made;

    (B) in any other case - the day that would have been applicable under paragraph 166A(2)(b) if the company had been required to make such a payment under section 221AZT ; or


    (ab) in relation to the payment of a company tax instalment that is a PAYG instalment in respect of a year of income - the earlier of:


    (i) the time at which the company next claims a PAYG instalment variation credit under section 45-215 or 45-420 in Schedule 1 to the Taxation Administration Act 1953 ; or

    (ii) the time at which a notice of original company tax assessment is served, or taken to have been served, on the company in respect of that year of income; or

    (iii) the time at which the Commissioner next pays the company a refund under section 8AAZLF of the Taxation Administration Act 1953 in response to a request from the company in the approved form; or


    (b) in relation to the payment of an initial payment of tax under section 221AP in respect of a year of income - the earlier of the following times:


    (i) the time at which the company receives an amount as a refund of that payment under whichever of the following provisions is applicable:

    (A) subsection 221AQ(3) ;

    (B) subsection 221AR(6) ;

    (C) subsection 221AU(4) ;

    (ii) whichever of the following is applicable:

    (A) if the company is required to make a payment under section 221AZD in respect of the year of income - the day on which that payment is made;

    (B) in any other case - on the day that would have been applicable under subparagraph 166A(1)(a)(i) if the company had been required to make such a payment under section 221AZD ; or


    (c) in relation to an estimated debit - the termination time ascertained under paragraph (a), (aa) or (b) in relation to the application by the company for the determination by the Commissioner of the debit;

    "trust amount"
    , in relation to a trust estate, means:


    (a) a share of the net income of the trust estate that is included in the assessable income of a beneficiary under section 97 , 98A or 100 ;


    (b) a share of the net income of the trust estate in respect of which the trustee is liable to be assessed under section 98 ; or


    (c) the net income, or a part of the net income, of the trust estate in respect of which the trustee is liable to be assessed under section 99 or 99A ;

    "unfranked dividend"
    means a dividend (including a dividend that is not a frankable dividend) no part of which has been franked in accordance with section 160AQF ;

    "unit"
    means a unit within the meaning of Division 6B or 6C of Part III;

    "unitholder"
    means a unitholder within the meaning of Division 6B or 6C of Part III;

    untainting tax
    means tax payable in accordance with section 160ARDT or 160ARDY .

    "upstream entity"
    , in relation to a shareholder in a company, means:


    (a) a trustee of a trust estate ( ``top trust'' ) where:


    (i) the shareholder benefits or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting under the top trust; or

    (ii) one or more partnerships or trusts are interposed between the top trust and the shareholder; or


    (b) a partnership ( ``top partnership'' ) where:


    (i) the shareholder is a partner in the top partnership; or

    (ii) one or more partnerships or trusts are interposed between the top partnership and the shareholder;

    venture capital deficit tax
    means tax payable in accordance with the Venture Capital Deficit Tax Act.

    Note:

    See also section 160ASEN .

    Venture Capital Deficit Tax Act
    means the New Business Tax System (Venture Capital Deficit Tax) Act 2000 .

    venture capital franked amount
    for a dividend means so much of the dividend as has been venture capital franked in accordance with section 160ASEL .

    venture capital franked dividend
    means a dividend the whole or a part of which has been venture capital franked in accordance with section 160ASEL .

    venture capital sub-account
    means a venture capital sub-account that a PDF maintains within its class C franking account.

    Note:

    See section 160ASEB .

    venture capital sub-account balance
    , in relation to a PDF, means:


    (a) if the PDF has a venture capital sub-account surplus - the amount of that surplus; and


    (b) if the PDF has a venture capital sub-account deficit - the amount of that deficit; and


    (c) in any other case - nil.

    venture capital sub-account deficit
    means a deficit calculated under subsection 160ASEC(2) .

    venture capital sub-account surplus
    means a surplus calculated under subsection 160ASEC(1) .

    "withholding income"
    means income to which section 128B would apply but for paragraph 128B(3)(ga) .


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