Document ID: chunk:federal_register_of_legislation:C2025C00029:section:11:p63
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 11 (pt 63/64)
Character Range: 3459957–3462762

of the entity as a result of the variation in the benchmark franking percentage between the current franking period and the last relevant franking period; and
 (e) any other information required by the *approved form that is relevant in determining whether the entity is streaming *distributions.
 (2) The entity must comply with the Commissioner's request.

Division 205—Franking accounts, franking deficit tax liabilities and the related tax offset

Guide to Division 205

205‑1  What this Division is about

      This Division:
         • creates a franking account for each entity that is, or has been, a corporate tax entity; and
         • identifies when franking credits and debits arise in those accounts and the amount of those credits and debits; and
         • identifies when there is a franking surplus or deficit in the account; and
         • creates a liability to pay franking deficit tax if the account is in deficit at certain times; and
         • creates a tax offset for that liability.

Table of sections
205‑5 Franking accounts, franking deficit tax liabilities and the related tax offset

Operative provisions
205‑10 Each entity that is or has been a corporate tax entity has a franking account
205‑15 Franking credits
205‑20 Paying a PAYG instalment, income tax, diverted profits tax or Australian DMT tax
205‑25 Residency requirement for an event giving rise to a franking credit or franking debit
205‑30 Franking debits
205‑35 Refund of income tax, diverted profits tax or Australian DMT tax
205‑40 Franking surplus and deficit
205‑45 Franking deficit tax
205‑50 Deferring franking deficit
205‑70 Tax offset arising from franking deficit tax liabilities

205‑5  Franking accounts, franking deficit tax liabilities and the related tax offset
 (1) Each entity that is, or has ever been, a corporate tax entity has a franking account.
 (2) The payment of a PAYG instalment or income tax will generate a franking credit in that account. The amount of the credit is equal to the amount of tax paid. The receipt of a franked distribution by an entity from another corporate tax entity will also generate a franking credit. There are other circumstances in which a franking credit arises.
 (3) The receipt of a refund of income tax or the payment of a franked distribution by a corporate tax entity will generate a franking debit. There are, however, other cases where a franking debit arises. For example, a franking debit might arise under a determination by the Commissioner because distributions have been streamed.
 (4) An entity must be a franking entity at certain times and satisfy certain residency requirements before a franking credit or debit arises in its account.
 (5) Franking deficit tax is payable if the franking account of an entity is in deficit at the end of