Section 2 - Conditions to be met to satisfy the test



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End of attention

A CFC has to satisfy the following five conditions to pass the active income test:

  • Is it a resident of a foreign country?
  • Does it have a permanent establishment in its country of residence?
  • Does it keep proper records?
  • Can it substantiate your claim that it has met the active income test?
  • Is its tainted income ratio less than 5%?
Last modified: 05 Dec 2006QC 18000