WORD OF THE DAY - Imputation Credits An arrangement in Australia - TopicsExpress

WORD OF THE DAY - Imputation Credits An arrangement in Australia and several other countries that eliminates the double taxation of cash payouts from a corporation to its shareholders. Australia has allowed dividend imputation since 1987. Through the use of tax credits called "franking credits" or "imputed tax credits," the tax authorities are notified that a company has already paid the required income tax on the income it distributes as dividends. The shareholder then does not have to pay tax on the dividend income. Finland, Italy, Mexico and New Zealand also have dividend imputation systems.

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