Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 2/20)
Character Range: 3691680–3694339

amount of the venture capital deficit is the amount of the excess.
 (3) A *PDF's *venture capital sub‑account may be in *deficit even though its *franking account as a whole is in *surplus. Similarly, a PDF's venture capital sub‑account may be in surplus even though its franking account as a whole is in deficit.

210‑135  Venture capital deficit tax
 (1) While recognising that an entity may anticipate *venture capital credits when *franking *distributions, the object of this section is to prevent those credits from being anticipated indefinitely by requiring the entity to reconcile its *venture capital sub‑account at certain times and levying tax if the account is in *deficit.
 (2) An entity is liable to pay *venture capital deficit tax imposed by the New Business Tax System (Venture Capital Deficit Tax) Act 2003 if its *venture capital sub‑account is in *deficit at the end of an income year.
 (3) An entity is liable to pay *venture capital deficit tax imposed by the New Business Tax System (Venture Capital Deficit Tax) Act 2003 if:
 (a) it ceases to be a *PDF; and
 (b) immediately before it ceases to be a PDF, its *venture capital sub‑account is in *deficit.

210‑140  Effect of a liability to pay venture capital deficit tax on franking deficit tax
 (1) If an entity is liable to pay *venture capital deficit tax under subsection 210‑135(2) because its *venture capital sub‑account is in *deficit at the end of an income year, the amount (if any) of *franking deficit tax that the entity would otherwise be liable to pay under subsection 205‑45(2) because its *franking account is in *deficit at that time is reduced by the amount of the liability for venture capital deficit tax.
 (2) If an entity is liable to pay *venture capital deficit tax under subsection 210‑135(3) because it ceases to be a *PDF during an income year, the amount (if any) of *franking deficit tax that the entity would otherwise be liable to pay under subsection 205‑45(3) because it ceases to be a *franking entity at that time is reduced by the amount of the liability for *venture capital deficit tax.

210‑145  Effect of a liability to pay venture capital deficit tax on the franking account
 (1) If an entity incurs a liability to pay *venture capital deficit tax, a *franking credit arises for the entity immediately after the liability arises (the relevant day).
 (2) The amount of the *franking credit is equal to:
 (a) if no liability to pay *franking deficit tax arises on the relevant day—the amount of the *venture capital deficit tax; or
 (b) if a liability to pay franking deficit tax also arises on the relevant day—the amount of the venture capital