Tax Laws Amendment (2005 Measures No. 2) Act 2005 (78 of 2005)

Schedule 1   Simplified imputation system

Income Tax Assessment Act 1997

2   At the end of section 205-70

Add:

30% reduction will generally not apply to private company's first year of tax liability

(5) The 30% reductions in steps 1 and 2 of the method statement in subsection (2) do not apply in working out the amount of the*tax offset to which the entity is entitled for the relevant year if:

(a) the entity is a*private company for the relevant year; and

(b) if the company did not have the tax offset (but had all its other tax offsets) it would have had an income tax liability for the relevant year; and

(c) the company has not had an income tax liability for any income year before the relevant year; and

(d) the amount of the liability referred to in paragraph (b) is at least 90% of the amount of the*deficit in the company's*franking account at the end of the relevant year.