Zerrikania Pty Ltd has taxable income of $100,000 and the relevant tax rate is 30%. Consequently, Zerrikania pays income tax of $30,000 leaving $70,000 available for distribution to shareholders as dividends. Zerrikania has a single shareholder and pays all of the after-tax profits to the shareholder as a dividend. The shareholder receives $70,000 from the company and does not have any other income. Calculate the total tax paid and the effective overall tax rate: Under the classical (old) system Imputation system (ignore Medicare & other levies)

 

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Under the classical old imputation system the company tax paid by Zerrikania Pty Ltd is imputed cred... View the full answer