With the ongoing discussions on franking credits and now Labor trying to get their hands on them could you please explain why companies have to pay Dividends in taxed dollars?
Why can’t they pay dividends in pre-tax dollars (dividend + 30%) the gross amount and allow the shareholder to handle the tax implications?
Regards
A: Thanks for the question.
Your suggestion is effectively the way it currently works. Don’t disagree with the idea – but you would also need to abolish company tax. Not sure whether the public would cop this.
Here is a link to my article which explains this http://www.switzer.com.au/the-experts/paul-rickard/shortens-naked-tax-grab-may-lead-to-more-buybacks20181503/
