Document ID: chunk:federal_register_of_legislation:C2025C00029:section:14:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 14 (pt 2/14)
Character Range: 3494286–3496856

liability to pay *diverted profits tax.
 (1B) An entity receives a refund of Australian DMT tax if and only if:
 (a) either:
 (i) the entity receives an amount as a refund; or
 (ii) the Commissioner applies a credit, or an *RBA surplus, against a liability or liabilities of the entity; and
 (b) the refund of the amount, or the application of the credit, represents in whole or in part a return to the entity of an amount paid or applied to satisfy the entity's liability to pay *Australian DMT tax.
 (2) The amount of the refund is so much of the amount refunded or applied as represents the return, or amount remaining, referred to in paragraph (1)(b), (1A)(b) or (1B)(b).

205‑40  Franking surplus and deficit
 (1) An entity's *franking account is in surplus at a particular time if, at that time, the sum of the *franking credits in the account exceeds the sum of the *franking debits in the account. The amount of the franking surplus is the amount of the excess.
 (2) An entity's *franking account is in deficit at a particular time if, at that time, the sum of the *franking debits in the account exceeds the sum of the *franking credits in the account. The amount of the franking deficit is the amount of the excess.

205‑45  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 income year
 (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 an income 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; 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.

205‑50  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) An entity is taken to have *received