Intragroup dividends do not result in a requirement for tax effect adjustments on consolidation if:
A) group companies are Australian.
B) the dividend is fully franked.
C) both A and B.
D) none of the above.

Question

Quizplus · Accepted Answer

In Australia, intragroup dividends that are fully franked do not require tax effect adjustments on consolidation because the franking credits attached to the dividends can be used to offset the tax liabilities of the receiving entity, thus eliminating the need for any additional tax adjustments within the group.

Intragroup Dividends Do Not Result in a Requirement for Tax