INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 1 - Interpretation  

SECTION 160APBB   PAYING PAYG INSTALMENT OR COMPANY TAX  

160APBB(1)   [``pays'']  

For the purposes of this Part, a person pays a PAYG instalment or company tax if and only if:

(a) the person has a liability to pay the instalment or the company tax; and

(b) either:

(i) the person makes a payment to satisfy the liability (in whole or in part); or

(ii) a credit, or an RBA surplus, is applied to discharge or reduce the liability.

Note:

The requirement in paragraph (a) means that the company cannot generate franking credits by making a ``voluntary'' payment of company tax (that is, paying an amount on account of company tax for which the company is not liable at the time when the payment is made).

160APBB(2)   [Certain allowable credits]  

Subparagraph (1)(b)(ii) does not apply to the application of a credit allowable under or by virtue of:

(a) Division 18, 18A or 18B of Part III; or

(b) the International Tax Agreements Act 1953 ; or

(c) section 45-30 , 45-215 or 45-420 in Schedule 1 to the Taxation Administration Act 1953 .

160APBB(3)   [Amount]  

The amount of the PAYG instalment or company tax paid is equal to:

(a) the amount of the liability if it is satisfied in full; or

(b) the amount by which the liability is reduced if it is not satisfied in full.

160APBB(4)   [Reduction by amount of excess]  

If:

(a) a surplus in an RBA of a company is applied to satisfy a liability of the company to pay a PAYG instalment in respect of a year of income; and

(b) a credit allowable under section 45-30 in Schedule 1 to the Taxation Administration Act 1953 in respect of that year of income is included in the RBA; and

(c) the RBA does not include the liability to pay the PAYG instalment; and

(d) the amount of the credit exceeds the company tax assessed to the company in respect of that year of income;

the amount of the PAYG instalment paid by virtue of the application of the surplus is reduced by the amount of the excess referred to in paragraph (d).