Australian imputation credit account companies

NZ franking company

Introduction

Australian companies keep NZ imputation account in NZ, and pass on imputation credits to NZ shareholders for tax paid in NZ.

NZ companies keep Australian franking account in Australia, and pass on franking credits to Australian shareholders for tax paid in Australia.

Imputation accounts maintained

NZ imputation account

Australian franking account

Income year

1 April to 31 March

1 July to 30 June

Eligibility

Australian companies and unit trusts can choose to keep a New Zealand imputation credit account if they:

1.      are ‘resident in Australia’, according to the New Zealand residence rules but in regards to Australia

2.      are not treated under a double taxation agreement as a resident in a country other than Australia or New Zealand

3.      meet the New Zealand eligibility criteria for keeping an imputation credit account (except residency).

The company is incorporated in New Zealand.

If the company is not incorporated in New Zealand, in order

to be eligible to choose to enter the Australian imputation

system, the company must carry on business in New Zealand

and either:

n have its central management and control there

n have its voting power controlled by members who are

New Zealand residents

How to make an election

Rregister online through myIR, or complete a Trans-Tasman imputation election form - IR488.

An IRD number will be issue to maintain the imputation account if the Australian company is not already a New Zealand taxpayer .

Nnotify Australian Commissioner of Taxation by lodging a Trans-Tasman imputation election form.

If a NZ company does not have an Australian tax file number (TFN), one will be issued.