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  • 28. Overseas interests

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    Z – Did you have overseas branch operations or a direct or indirect interest in a foreign trust, foreign company, controlled foreign entity or transferor trust?

    Print X in the appropriate box at Z item 28.

    Overseas branch operations include:

    • business operations carried on by an Australian resident entity at or through a fixed place of business in another country
    • business operations carried on by a foreign resident entity at or through a fixed place of business in Australia.

    You must answer yes if the company derived a dividend or other amount that is treated as non-assessable non-exempt income under section 23AH, 23AI, 23AK, 99B(2A) of the ITAA 1936 or sub-division 768-A in the ITAA 1997.

    If the answer is yes, complete the International dealings schedule 2019.

    The ‘interests’ in item 28 that will require the entity to complete the schedule are those where:

    • the entity has an interest in a controlled foreign company (CFC) or trust (CFT)
    • the entity has transferred property, at any time, including money or services, to a non-resident trust, or is able to influence the decisions relating to a non-resident trust, or
    • the entity held a direct voting percentage of 10% or more in a foreign company and it had a CGT event happening to a share in the foreign company.

    An interest in a CFC or CFT may be either direct or indirect, and has the same meaning as set out in Division 3 of Part X of the ITAA 1936. For the purposes of the CFC rules, do not trace interests through an Australian entity. For example, if your company has an interest in an Australian trust which owns a CFC, your company is not regarded as having a direct or indirect interest in the CFC, although your company must still include any attributable income to which it was presently entitled as its assessable income.

    A company has an interest in a transferor trust if the company has ever made, or caused to be made, a transfer of property or services to a non-resident trust. ‘Transfer’, ‘property’ and ‘services’ are defined in section 102AAB of the ITAA 1936. Sections 102AAJ and 102AAK of the ITAA 1936 provide guidance on whether there has been a transfer or deemed transfer of property or services to a non-resident trust.

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    Last modified: 18 May 2020QC 58629