Which of the following statements regarding the imputation tax system is INCORRECT?
A)Shareholders are given credit against their personal tax for the tax paid by the company.
B)It minimises double taxation.
C)It reduces the amount of tax a company must pay.
D)The imputation system is used in Australia.

Question

Quizplus · Accepted Answer

The imputation tax system does not reduce the amount of tax a company must pay; instead, it allows shareholders to receive a credit for the tax the company has already paid, thus minimizing double taxation at the shareholder level.

Which of the Following Statements Regarding the Imputation Tax System