Hi Stas –
Regardless of any my calcs. below (which I’ve set out for the non-accountants amongst you blokes) - for you to get say total divs. of $102,000 in the same year, you’re going to need to hold –obviously
$102,000 / $0.30 = 334,000 shares.
Having been out of the tax/accounting game for over 11 years, Oz Tax rules might have been changed since then, but to my knowledge they haven’t, so I’m saying the following :
It’s a fair bet that BGS, the Oz Co.- is a “parent” co. i.e. has a 100%-owned operating subsidiary Co. set up in Mali – to earn profits on its exploration/mining operations there.
So, let’s - for the purpose of this post - code the Oz co. as BGSA & the wholly-owned Mali subsidiary as BGSM.
When BGSM has fully recovered its losses to date, and reaches the financial position that will enable it to pay a div. to BGSA (its 100% sole shareholder) then that div. is declared in BGSA’s relevant 30-June year-end Tax Return as Income.
To determine the applicable amount of TAX payable by BGSA on that div., that div. amount is “grossed up” – by the following factor: 100 / (100-27.5) = approx. 1.38 times, where 27.5 = the Co. Tax Rate %, for Oz Cos. which have a turnover of < $10m in the year.
To make calcs easier let’s presume that that div., that BGSA received from BGSM, was $Aust725,000.
So multiply that by ~1.38 and you get $1,000,000.
BGSA then has Oz tax ASSESSED – on that $1m - of $275,000 ($1m x 27.5%), but IF applicable, ALSO gets a cash Credit offset, from BGSM, of any tax BGSM paid to the Mali Govt.
Once that Tax has been PAID – always in the financial year FOLLOWING the year in which BGSA received BGSM’s div., then any subsequent div. BGSA pays it shareholders will be FULLY FRANKED.
I stand corrected on this, if any other hotshot bean-counter is more up to date with what I’ve said above,
than me. :)
Let’s now presume that BGSA does have sufficient SURPLUS cash in the bank to afford a div. of 15c a share twice a year, to pay out to its Australian shareholders.
Based on BGSA’s present Issued Capital (Shares on issue) of 230m shares, that will require the year’s total div. payout, by BGSA, to be 230m x 30c/share = $69m.
A pipe dream? 1 day I expect it could happen, but IMO, not soon. Guata.
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