ato logo
Search Suggestion:

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

Use this worksheet to work out the tainted income ratio for a controlled foreign company.

Last updated 11 September 2016

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.

   

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:

b

$_____________

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.

 

Category

Amount $

 

Revenue from commodity contracts

_________________

 

Revenue from exchange gains

_________________

 

Revenue from other asset disposals

_________________

 

Total:

c

$_____________

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.

 

Category

Amount $

 

Net commodity gain

_________________

 

Net exchange gain

_________________

 

Net gain from other asset disposals

_________________

 

Total:

d

$__________

Step 5

Work out the CFC's share of the gross turnover of partnerships in which the CFC is a partner - refer to worksheet 3.

 

Name of partnership

Amount $

 

__________________________________

_________________

 

__________________________________

_________________

 

__________________________________

_________________

 

Total:

e

$___________

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

A

$___________

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.

 

Category of passive income

Amount $

 

Interest

_________________

 

Annuities

_________________

 

Tainted royalty income

_________________

 

Tainted rental income

_________________

 

Dividends

_________________

 

Other passive income

_________________

 
 

Total:

a

$______________

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.

b

$______________

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.

c

$______________

Step 4

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

 

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:

d

$______________

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.

 

Name of partnership

Amount $

 

__________________________________

_________________

 

__________________________________

_________________

 

__________________________________

__________________

 

Total:

e

$__________

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

B

$__________

Part C - The tainted income ratio

The tainted income ratio is as follows:

   

Amount at label B

(gross tainted turnover)

___________

   

Amount at label A

(gross turnover)

___________

=

C                 __________

QC20773