LODGMENT OF FRANKING ACCOUNT TAX RETURNS

If a corporate tax entity incurs, at any time during its 2002-03 income year, a liability to pay franking deficit tax or over-franking tax, or an obligation to disclose information to the Commissioner under section 204-75 of the ITAA 1997, it is required to lodge a franking account tax return for that income year. A corporate tax entity is also required to lodge a franking account tax return for its 2002-03 income year if a refund of income tax is taken by section 205-50 of the ITAA 1997 to have been paid to the entity at any time during that year.

If a corporate tax entity does not incur, during the income year, a liability to pay any amount of franking deficit tax or over-franking tax, or an obligation to disclose information under section 204-75 of the ITAA 1997, and it has not received a refund of income tax mentioned above, then it is not required to lodge a franking account tax return.

DATE OF LODGMENT OF FRANKING ACCOUNT TAX RETURN

The franking account tax return must be lodged in the approved form by the last day of the month following the end of the income year in which the liability was incurred, or the refund is taken to have been paid, or the disclosure obligation arose. This is also the date on which the franking deficit tax and over-franking tax, if any, is payable. In certain cases where a refund of income tax is received the taxation law provides for a different payment date for franking deficit tax (namely, 14 days after that refund is received). In these cases the franking account tax return accounting for that refund must be lodged by the payment date provided for in the law.

SPECIAL RULES FOR LATE BALANCING CORPORATE TAX ENTITIES THAT ELECT TO USE 30 JUNE AS A BASIS FOR DETERMINING THEIR FRANKING DEFICIT TAX LIABILITY

Late balancing corporate tax entities that elect to use 30 June as a basis for determining their franking deficit tax liability are required to lodge a franking account tax return and meet their liability for franking deficit tax in accordance with the rules contained in Division 214 of the Income Tax (Transitional Provisions) Act 1997 (the ‘IT(TP)A 1997’).

If a late balancing corporate tax entity that elects to have its franking deficit tax liability determined on 30 June incurs, at any time during its 2002-03 income year a liability to pay over-franking tax or to pay franking deficit tax under Division 205 of the ITAA 1997 or has an obligation to disclose information to the Commissioner under section 204-75 of the ITAA 1997, it is required to lodge a franking account tax return for that income year. This franking account tax return is in addition to the one lodged in accordance with Division 214 of the IT(TP)A 1997 and it must be lodged in the approved form by the last day of the month following the income year in which the over-franking tax liability or the Division 205 franking deficit tax liability was incurred or in which the disclosure obligation arose. This is also the date on which the over-franking tax or the Division 205 franking deficit tax liability, if any, is payable.