Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:18_3:p1
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 18 cl 3 (pt 1/3)
Character Range: 253651–256331

3                                                                     class C

205‑20  A late balancing company may elect to have its FDT liability determined on 30 June

 (1) This section applies after 30 June 2002.

 (2) A corporate tax entity's liability to pay franking deficit tax is determined under sections 205‑25 and 205‑30 of this Act (the transitional provisions), and not under sections 205‑45 and 205‑50 of the Income Tax Assessment Act 1997 (the ongoing provisions), if:
 (a) the entity was in existence at the end of 30 June 2002; and
 (b) the entity's 2001‑02 income year ends after 30 June 2002; and
 (c) the entity makes a valid election to have its liability to pay franking deficit tax determined under the transitional provisions.

 (3) The entity makes a valid election to have its liability to pay franking deficit tax determined under the transitional provisions if:
 (a) the election is in writing; and
 (b) the election is made on the day on which liability for franking deficit tax would be determined under those provisions, or earlier than that day but in the income year in which that day occurs; and
 (c) the entity's liability to pay franking deficit tax has not previously been determined under the ongoing provisions.

205‑25  Franking deficit tax

Object

 (1) While recognising that an entity may anticipate franking 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 franking account at certain times and levying tax if the account is in deficit.

Franking deficit at end of 30 June

 (2) An entity is liable to pay franking deficit tax imposed by the New Business Tax System (Franking Deficit Tax) Act 2002 if its franking account is in deficit at the end of 30 June in the year 2003 or a later year.

Corporate tax entity ceases to be a franking entity

 (3) An entity is liable to pay franking deficit tax imposed by the New Business Tax System (Franking Deficit Tax) Act 2002 if:
 (a) it ceases to be a franking entity after 30 June 2002; and
 (b) immediately before it ceases to be a franking entity, its franking account is in deficit.

Note: The tax is imposed in the New Business Tax System (Franking Deficit Tax) Act 2002 and the amount of the tax is set out in that Act.

205‑30  Deferring franking deficit

Object

 (1) The object of this section is to ensure that an entity does not avoid franking deficit tax by deferring the time at which a franking debit occurs in its franking account.

End of year deficit deferred

 (2) If:
 (a) a corporate tax entity receives a refund of income tax within 3 months