The active business exemption exempts you from taxation under the FIF measures for interests you have in foreign companies principally engaged in certain active businesses, known as eligible activities. [section 497]
This exemption also applies:
- when working out the net income of a trust estate where the trust invests directly in a foreign company engaged in an active business, or
- when working out the FIF income of a CFC or a CFT - because the income of a CFC or CFT is worked out as though they were a resident taxpayer.
This exemption does not apply to an interest in a non-resident trust.