{"id":"C2004A00981","name":"New Business Tax System (Over-franking Tax) Act 2002","slug":"new-business-tax-system-over-franking-tax-act-2002","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"49 of 2002","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":436148,"registerId":"C2004A00981-fast-fetch-1775953417382","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"New Business Tax System (Over-franking Tax) Act 2002","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![](image.001.png)\n\n \n\n \n\n \n\n \n\n \n\nNew Business Tax System (Over‑franking Tax) Act 2002\n\n \n\nNo. 49, 2002\n\n \n\n \n\n \n\n \n\n \n\nAn Act to impose over‑franking tax, and for related purposes\n\n \n\n \n\n \n\nContents\n\n1 Short title...................................\n\n2 Commencement...............................\n\n3 Definition...................................\n\n4 Imposition..................................\n\n5 Amount of over‑franking tax..................\n\n \n\n![](image.001.png)\n\n \n\nNew Business Tax System (Over‑franking Tax) Act 2002\n\nNo. 49, 2002\n\n \n\n \n\n \n\nAn Act to impose over‑franking tax, and for related purposes\n\n[Assented to 29 June 2002]\n\nThe Parliament of Australia enacts:\n\n1  Short title\n\n  This Act may be cited as the New Business Tax System (Over‑franking Tax) Act 2002.\n\n2  Commencement\n\n  This Act commences on the day on which it receives the Royal Assent.\n\n3  Definition\n\n  In this Act:\n\nover‑franking tax means over‑franking tax payable under paragraph 203‑50(1)(a) of the Income Tax Assessment Act 1997.\n\n4  Imposition\n\n  Over‑franking tax is imposed.\n\n5  Amount of over‑franking tax\n\n  The amount of the tax imposed by this Act is equal to the amount worked out under paragraph 203‑50(2)(a) of the Income Tax Assessment Act 1997.\n\n \n\n \n\n \n\n[Minister’s second reading speech made in—\n\nHouse of Representatives on 30 May 2002\n\nSenate on 19 June 2002]\n\n \n\n(121/02)\n\n\n \n","sortOrder":0}],"analysis":{"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"The Act itself does not expand or narrow the concept beyond its cross‑reference; it simply imposes the over‑franking tax and fixes the amount by reference to ITAA 1997 para 203‑50(2)(a). There is no indication within this text that the scope differs from that operative in the cited ITAA provisions."},"complexity_factors":["Heavy cross‑reference to the Income Tax Assessment Act 1997 (paras 203‑50(1)(a) and 203‑50(2)(a)) for definition and calculation (s3, s5).","Substantive meaning and computation reside outside this Act, requiring users to consult and reconcile multiple statutory sources.","Technical tax concept (over‑franking) requires specialist tax knowledge to apply correctly in practice.","Compliance burden: taxpayers must calculate and record amounts under an external provision (s5), raising administrative costs.","The Act is short and prescriptive with limited interpretive guidance, increasing reliance on external materials and potential for dispute.","Low legislative discretion — the Act imposes a tax but leaves calculation mechanics to the ITAA provisions it references."],"plain_english_summary":"This Act imposes an “over‑franking tax” and ties its definition and calculation to specified paragraphs of the Income Tax Assessment Act 1997 (s3, s5). It commences on Royal Assent and formally imposes the tax (s2–s4). \n\nIt affects companies, shareholders and other taxpayers who generate or claim franking credits by making excess franking amounts taxable; those taxpayers must calculate the payable amount under ITAA 1997 para 203‑50(2)(a), creating a measurable compliance and record‑keeping obligation (s5)."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This Act remains tightly scoped to its original purpose. It was always intended as a brief imposition Act that creates the legal authority for over-franking tax while leaving substantive rules to the Income Tax Assessment Act 1997. There is no evidence of scope creep — the Act has not accumulated additional functions or expanded beyond its narrow technical role of imposing and quantifying this specific tax."},"complexity_factors":["Extremely short — only 5 sections spanning approximately 1 page","Only 1 defined term ('over-franking tax'), which simply cross-references another Act","No conditional logic, exceptions, or nested provisions","No substantive operational rules — entirely dependent on external reference to Income Tax Assessment Act 1997","Single purpose: imposition of tax with amount determined elsewhere"],"plain_english_summary":"This is a very short law that creates a specific tax called 'over-franking tax'. \n\n**What it does:**\n- **Imposes a tax** on companies that give their shareholders more 'franking credits' than they should have. Franking credits are tax credits that attach to dividends (payments companies make to shareholders) to prevent double taxation of company profits.\n- **'Over-franking'** happens when a company attaches more franking credits to a dividend than the company has actually paid in tax. This is basically the company giving away tax benefits it hasn't earned.\n\n**Who it affects:**\n- **Companies** that pay dividends with excessive franking credits attached.\n- The tax is calculated according to rules in the main Income Tax Assessment Act 1997 (specifically section 203-50).\n\n**Why it matters:**\n- It stops companies from giving shareholders tax credits they aren't entitled to, which would otherwise cost the government revenue and create unfair advantages.\n- It's part of Australia's broader 'imputation system' — the rules that ensure company profits are only taxed once (either at the company level or the shareholder level, but not both).\n\n**How it works:**\nThis Act doesn't contain the detailed rules itself. Instead, it simply:\n1. Says the tax exists (section 4)\n2. Points to the Income Tax Assessment Act 1997 for what 'over-franking tax' means and how to calculate it (sections 3 and 5)\n\nThis is a common pattern in Australian tax law — a short 'imposition Act' that creates the legal authority to collect a tax, while the substantive rules live in the main tax legislation."}},"importantCases":[],"_links":{"self":"/api/acts/new-business-tax-system-over-franking-tax-act-2002","history":"/api/acts/new-business-tax-system-over-franking-tax-act-2002/history","analysis":"/api/acts/new-business-tax-system-over-franking-tax-act-2002/analysis","conflicts":"/api/acts/new-business-tax-system-over-franking-tax-act-2002/conflicts","importantCases":"/api/acts/new-business-tax-system-over-franking-tax-act-2002/important-cases","documents":"/api/acts/new-business-tax-system-over-franking-tax-act-2002/documents"}}