Which system allows companies to pay dividends that carry credits for income tax paid by the company?

Question

Quizplus · Accepted Answer

The imputation system allows companies to pay dividends that carry credits for income tax paid by the company. This system is used in countries like Australia, New Zealand, and the United Kingdom. It prevents double taxation, which occurs when a company pays taxes on its profits and then shareholders pay taxes on the same profits. With the imputation system, the tax credit can be used to offset the tax payable on the dividend income received by the shareholders.

Which System Allows Companies to Pay Dividends That Carry Credits