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One of the dividend taxation system that was implemented by 5 countries around the world is Imputation taxation system. Consider a firm in Auxtralia earns
One of the dividend taxation system that was implemented by 5 countries around the world is Imputation taxation system. Consider a firm in Auxtralia earns a pre-tax profit of AUD10 per share. It pays a corporate tax of AUD3 per share (30% tax rate) in taxes. The firm pays the remaining AUD7 in dividends to shareholder in 30% tax bracket. Calculate the amount of tax paid by the shareholders under the imputation tax system
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