What income has been comparably taxed?
Amounts are generally only taken into account if they are not taxed in full in Australia or comparably taxed in a listed country.
The controlled foreign company rules make assumptions about whether or not income has been comparably taxed. Seven countries have been identified as having a tax system that is comparable with Australia's. These countries are listed in Part 1 of Schedule 10 of the Income Tax Regulations 1936 and are known as listed countries. It is assumed that all income derived by a controlled foreign company resident in a listed country has been comparably taxed, subject to an important exception: 'eligible designated concession income'. The seven countries are:
- New Zealand
- United Kingdom and Northern Ireland
- United States of America.
It is further assumed that all income derived by a controlled foreign company that is resident in any other country (an 'unlisted country') has not been comparably taxed.