INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 11 - Additional tax by way of penalty  

SECTION 160ARX   PENALTY FOR OVER-FRANKING  

160ARX(1)   [Class A franked amount]  

Where:

(a) the class A franking deficit of a company at the end of a franking year is more than 10% of the total of the class A franking credits arising during the franking year; and

(b) the class A franked amount of a dividend paid during the franking year to a shareholder in the company exceeded the class A required franking amount for that dividend;

the company is liable to pay, by way of penalty, additional tax equal to 30% of the class A franking deficit tax that would be payable apart from subsection 160AQJ(2) by the company for the franking year.

160ARX(2)   [Class B franked amount]  

If:

(a) the class B franking deficit of a company at the end of a franking year is more than 10% of the total of the class B franking credits arising during the franking year; and

(b) the class B franked amount of a dividend paid during the franking year to a shareholder in the company exceeded the class B required franking amount for that dividend;

the company is liable to pay, by way of penalty, additional tax equal to 30% of the class B franking deficit tax that would be payable apart from subsection 160AQJ(2) by the company for the franking year.

160ARX(3)   [Class C franked amount]  

If:

(a) the class C franking deficit of a company at the end of a franking year is more than 10% of the difference between:

(i) the total of the class C franking credits arising during the franking year; and

(ii) the total of the class C franking debits arising under section 160APYBAB during the franking year; and

(b) the class C franked amount of a dividend paid during the franking year to a shareholder in the company exceeded the class C required franking amount for that dividend;

the company is liable to pay, by way of penalty, additional tax equal to 30% of the class C franking deficit tax that is payable by the company for the franking year.