Money Doesn’t Come Without Guidance ...
You may be thinking about investing in the stock market in Australia but not sure about the tax implication of the earnings you receive as dividend. Australian Taxation Office (ATO) is encouraging investment in stock market by the means of franking credit; this is where tax payers get refund on tax imposed from their dividend income to avoid double taxation.
An individual can claim a tax refund if the franking credits he/she receives is more than the tax he/she has to pay. The difference amount is the one he/she can claim. This is called refund of excess franking credits. In some cases, an individual is entitled to a refund of the full amount of franking credits received, even if they do not lodge a tax return.
Individuals need to declare their unfranked amounts, franked amounts and franking credits in the tax return for individuals when they lodge the tax return. ATO then uses this information to work on the refund of excess franking credits. However, individuals can claim the refund without lodging the tax return, in this case they need to provide the necessary information by following these mediums:
For a dividend that has Australian franking credits attached from a New Zealand franking company, an individual may be eligible to claim the Australian sourced franking credits.