Item 10 - attributable income

This item deals with attributable income assessable under sections 456, 457 or 459A of the Income Tax Assessment Act 1936 (ITAA 1936) for controlled foreign companies (CFCs) and controlled foreign trusts (CFTs).

There is special relief from double taxation under section 456A of the ITAA 1936 to ensure there is no attribution under section 456 where the CFC or CFT is a resident of a listed country in which foreign tax is payable under an accruals taxation law of that country.

This question draws on the statistical attribution income labels required to be completed in the ITR around attributed foreign income and net foreign income.

Subsection 456(1) of the ITAA 1936

Where a CFC or CFT has attributable income for a statutory accounting period for an attributable taxpayer, the taxpayer's attribution percentage of the attributable income is included in their assessable income of the income year in which the end of the statutory accounting period occurs.

Enter at G, H, I, attributable income that was included in your assessable income against the requested groups.

Enter the combined total at J.

Example of attributable income

Section 457 of the ITAA 1936

Where a CFC or CFT ceases to be resident in an unlisted country and becomes resident of a listed country or Australia, then the attributable taxpayer's assessable income of the income year in which the change of residence occurs is calculated using the formula:

Attribution percent x adjusted distributable profits

Enter at K the amount calculated in accordance with the above formula.

Section 459A of the ITAA 1936

This is an integrity measure to ensure that the attribution of income under any of sections 456 to 459 will not be avoided through the use of interposed Australian trusts or Australian partnerships in conjunction with a CFC or CFT.

The amount is calculated using the formula:

Attribution percentage x interest/entitlement x section 456 to 459A amount

Where an amount is included in assessable income because an attributable taxpayer has an interest in a CFT, the amount attributed may have already been liable to Australian tax. Special rules prevent this double taxation. Refer to Division 9 of Part X of the ITAA 1936 for more information.

Enter at N the amounts of attributable income calculated under section 459A.

    Last modified: 21 Feb 2012QC 25356