ato logo
Search Suggestion:

Worksheet 2: Working out the tainted income ratio for a controlled foreign company (CFC)

Last updated 30 July 2017

You can use this worksheet to work out the tainted income ratio for a CFC.

Show all amounts in the currency in which the accounts of the company are kept. Do not convert to Australian dollars.

Part A Working out the CFC’s gross turnover

Step 1

Work out the CFC’s gross revenue as shown in the CFC’s accounts.

  • (a) $              

Step 2

Work out the following amounts included in (a). These amounts are to be excluded from gross turnover.

Step 2 worksheet

Category of gross revenue

Amount $

Amounts already assessed to the CFC in Australia

 

Amounts derived through a branch in a listed country that are not EDCI in relation to any listed country and are subject to tax in a listed country

 

Non-portfolio dividends from a foreign company

 

Franked dividends

 

Dividends out of profits previously attributed

 

Trust amounts

 

Total

 

Step 3

Work out the following gross amounts included in (a).

The net amounts are added back at step 4. Do not count amounts that fall in the categories listed in step 2.

Step 3 worksheet

Category

Amount $

Revenue from commodity contracts

 

Revenue from exchange gains

 

Revenue from other asset disposals

 

Total

 

Step 4

Work out net gains to be included in gross turnover. Do not count amounts that fall in the categories listed in step 2

Step 4 worksheet

Category

Amount $

Net commodity gain

 

Net exchange gain

 

Net gain from other asset disposals

 

Total

 

Step 5

Work out the CFC’s share of the gross turnover of partnerships in which the CFC is a partner (see worksheet 3).

Step 5 worksheet

Name of partnership

Amount $

 

 

 

 

 

 

Total

 

Gross turnover (a − b − c + d + e)

Part B Working out the CFC’s gross tainted turnover

Step 1

List amounts included in the CFC’s gross revenue after exclusions (item a from part A less items b and c from part A) that fall into the following categories of passive income.

Step 1 worksheet

Category of passive income

Amount $

Tainted interest income

 

Annuities

 

Tainted royalty income

 

Tainted rental income

 

Dividends

 

Other passive income

 

Total

 

Step 2

Work out the CFC’s gross revenue that is tainted sales income after exclusions (item a from part A less items b and c from part A).

Step 3

Work out the CFC’s gross revenue that is tainted services income after exclusions (item a from part A less items b and c from part A).

Step 4

Work out the part of the CFC’s net gains included in gross turnover that are tainted income.

Step 4 worksheet

Category

Amount $

Net commodity gain (from step 4 part A)

 

Net tainted commodity gain

 

Smaller amount

 

Net exchange gain (from step 4 part A)

 

Net tainted exchange gain

 

Smaller amount

 

Net gain from assets (from step 4 part A)

 

Net gain from tainted assets

 

Smaller amount

 

Total

 

Step 5

Work out the CFC’s share of the gross tainted turnover of partnerships in which the CFC is a partner. See worksheet 3.

Step 5 worksheet

Name of partnership

Amount $

 

 

 

 

 

 

Total

 

Gross tainted turnover (a + b + c + d + e)

Part C The tainted income ratio

The tainted income ratio is as follows:

  • Amount at label B (gross tainted turnover) = C $             
  • Amount at label A (gross turnover) $                

QC90484