Change of residence of a controlled foreign company from an unlisted country to Australia

The attributable taxpayers in relation to a controlled foreign company are taxed under section 457 of the ITAA 1936 on the amount that relates to the period until the change of residence.

If a controlled foreign company changes residence from an unlisted country to Australia, a resident taxpayer who is an attributable taxpayer of the controlled foreign company is taxable on the taxpayer's attribution percentage of the adjusted distributable profits of the controlled foreign company.

The amount of distributable profits that is taxable to a resident taxpayer includes the adjusted tainted income of the controlled foreign company (excluding non-portfolio dividends) less any expenses relating to that adjusted tainted income.

Example of change of residence to Australia

    Last modified: 21 Feb 2012QC 25356