Taxation Laws Amendment Act (No. 3) 1993 (118 of 1993)

Part 4   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 9   Amendments relating to dividend imputation

Subdivision B   Amendments of the Principal Act

85   Liability to franking deficit tax

Section 160AQJ of the Principal Act is amended:

(a) by inserting in subsection (1) "class A" before "franking deficit" (wherever occurring);
        

(b) by inserting after subsection (1) the following subsection:
        

"(1A) If a company has a class B franking deficit at the end of a franking year, the company is liable to pay tax equal to the amount worked out using the formula:

Franking deficit * (Company tax rate / (1 - Company tax rate))

where:

'Franking deficit' means the amount of the class B franking deficit;

'Company tax rate' means the applicable general company tax rate.";

(c) by inserting in subsection (2) "or (1A), or both," after "(1)" (first occurring);
        

(d) by inserting in paragraphs (2)(c), (d), (e) and (f) "or (1A), as the case may be," after "(1)";
        

(e) by omitting from paragraph (2)(d) "equal to the excess; or" and substituting "worked out using the formula:
        

Excess * (Particular franking deficit tax / Relevant franking deficit tax)

where:

'Excess' means the amount of the excess;

'Particular franking deficit tax' means the tax that the company is liable to pay under subsection (1) or (1A), as the case requires; or";

(f) by omitting from paragraphs (2)(e) and (f) "(0.8 Fund component)" and substituting "Fund component";
        

(g) by omitting from paragraph (2)(f) "equal to the excess." and substituting "worked out using the formula:
        

Excess * (Particular franking deficit tax / Relevant franking deficit tax)

where:

'Excess' means the amount of the excess;

'Particular franking deficit tax' means the tax that the company is liable to pay under subsection (1) or (1A), as the case requires.".