Sections 1 and 2 asked the following questions:
- is the foreign company a CFC?
- are you an attributable taxpayer?
If the answer to both of these questions is yes, the next step is to determine whether you must include an amount in your assessable income. There are three types of attribution.
If you were an attributable taxpayer of a CFC resident in an unlisted country and the CFC paid a dividend while you were an attributable taxpayer, you may be subject to dividend attribution.
Attribution on change of residence
If you were an attributable taxpayer of a CFC resident in an unlisted country and the CFC changed its residence to a listed country or to Australia while you were an attributable taxpayer, you may be subject to attribution on your share of the accumulated profits of the CFC.
Attribution of current year profits
If you are an attributable taxpayer of a CFC at the end of the CFC's statutory accounting period, you may need to include the whole or a part of the profits of that period in your assessable income.
The attribution of current year profits of a CFC may be reduced if you have been subject to dividend attribution or attribution on change of residence by the CFC. Read chapter 3 and appendix 3 to see whether either of these apply to you.