The government has announced improvements to the simplified imputation system which will remove both the dividend tainting rules and the rules that deny franking credits when additional tax is paid because of a transfer pricing adjustment. For more information, see the Minister for Revenue and the Assistant Treasurer’s press release No 2006/080 of 9 November 2006, reported in 2006 TAXVINE No 43 (9) (10 November 2006).
The dividend tainting rules will be removed with effect from 1 July 2004. Rules that remove the denial of franking credits because of a transfer pricing adjustment are already in place and take effect from 1 July 2002.
The ATO has published a factsheet setting out the administrative arrangements that apply pending passage of the legislation implementing these changes.
For a copy of the factsheet, go here