Compute the income tax payable by this investor

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Question - Assume OzCpy is an Australian firm whose shares trade on the ASX. The firm earn part of its domestically income in Australia and and part of its income overseas, where it is required to pay tax to the foreign governments where it operates. Currently, the Australian corporate tax rate is 30% and the Medicare levy is 2%. OzCpy provides dividend imputation to Australian-resident shareholders from its Australian tax paid.

Assume that OzCpy pays a 86% partly-franked dividend of $11.41 thousand to an Australian shareholder who has a marginal tax rate of 32.5% and who is exempt from paying the Medicare levy. Compute the income tax payable by this investor on the partly-franked dividend.

Reference no: EM133148528

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