Worksheet 2: Working out the tainted income ratio for a controlled foreign company (CFC)
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This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
End of attentionYou 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.
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
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Amount $
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Amounts already assessed to the CFC in Australia
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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
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Non-portfolio dividends from a foreign company
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Franked dividends
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Dividends out of profits previously attributed
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Trust amounts
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Total
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(b)
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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
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Amount $
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Revenue from commodity contracts
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Revenue from exchange gains
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Revenue from other asset disposals
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Total
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(c)
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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
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Amount $
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Net commodity gain
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Net exchange gain
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Net gain from other asset disposals
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Total
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(d)
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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
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Amount $
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Total
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(e)
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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.
Step 1 worksheet
Category of passive income
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Amount $
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Tainted interest income
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Annuities
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Tainted royalty income
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Tainted rental income
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Dividends
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Other passive income
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Total
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(a)
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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.
Step 4 worksheet
Category
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Amount $
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Net commodity gain (from step 4 part A)
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Net tainted commodity gain
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Smaller amount
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Net exchange gain (from step 4 part A)
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Net tainted exchange gain
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Smaller amount
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Net gain from assets (from step 4 part A)
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Net gain from tainted assets
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Smaller amount
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Total
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(d)
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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
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Amount $
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Total
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(e)
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Gross tainted turnover (a + b + c + d + e) = $ ________ (B)
Part C The tainted income ratio
The tainted income ratio is as follows:
Amount at B (gross tainted turnover) / Amount at A (gross turnover) = $ _______ (C)