Document ID: chunk:federal_register_of_legislation:C2010C00583:clause:10_1:p5
Version: federal_register_of_legislation:C2010C00583
Segment Type: clause
Provision Reference: sch 10 cl 1 (pt 5/13)
Character Range: 62233–64867

liable under section 128B of the Income Tax Assessment Act 1936 to pay, if:
 (a) because of section 220‑25, the company satisfies the *residency requirement for the income year in which it derived the income on which it was liable to pay the withholding tax; and
 (b) the company is a *franking entity for the whole or part of that income year.
The amount of the credit equals the amount of the payment.

 (2) For the purposes of determining whether the company satisfies the *residency requirement for the income year described in paragraph (1)(a), section 205‑25 has effect as if the derivation of the income described in that paragraph were an event specified in a relevant table for the purposes of that section.

220‑210  Effect of franked distribution to NZ franking company or flowing indirectly to NZ franking company

No tax offset for NZ franking company

 (1) An *NZ franking company to which a *franked distribution is made or *flows indirectly is not entitled under Division 207 to a *tax offset for the *distribution. That Division has effect subject to this section.

Denial of tax offset does not stop franking credit or debit arising

 (2) However, subsection (1) does not prevent a *franking credit or *franking debit from arising in the *NZ franking company's *franking account under Division 205 or 208. To avoid doubt, the amount of the credit or debit, and the time at which it arises, are the same as they would be apart from subsection (1).

Note: This has the effect that the amount and timing of the credit or debit are worked out as if the NZ franking company had been entitled to the tax offset that subsection (1) prevents the company from being entitled to.

220‑215  Effect on franking account if NZ franking choice ceases to be in force

 (1) This section has effect if:
 (a) a company has made an *NZ franking choice; and
 (b) the choice is revoked or cancelled at a time (the end time); and
 (c) immediately before the end time the company is not an Australian resident.

Franking debit if franking surplus just before end time

 (2) A *franking debit arises in the company's *franking account on the day during which the end time occurs if the account was in *surplus immediately before that time. The amount of the debit equals the *franking surplus.

Franking deficit tax if franking deficit just before end time

 (3) If the company's *franking account was in *deficit immediately before the end time, subsection 205‑45(3) applies in relation to the company as if it ceased to be a *franking entity at the end time.

Note: Subsection 205‑45(3) makes an entity liable to pay franking deficit