Chapter 1 Attribution of the current year profits of a controlled foreign company (CFC)

This chapter explains the accruals tax system for residents with interests in foreign companies.

The accruals tax system applies to Australian residents who have a substantial interest in a foreign company controlled by Australians, referred to as a CFC. The system operates to include a taxpayer's share of specified income and gains of a CFC in the taxpayer's assessable income: this is called attribution. Subject to some modifications, the income and gains of CFCs are worked out using the same tax rules that apply for residents.