Section 7 - Reduction of attributable income because of interim dividends
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The attributable income of a CFC is reduced if you are taxed on a dividend paid by the CFC out of current year profits and you would be assessable on those profits under the CFC rules at the end of the statutory accounting period of the CFC.
An interim dividend is only regarded as having been paid out of the attributable income of the current statutory accounting period if there are no earlier profits available out of which the dividend could have been paid. To the extent that there are such earlier profits, the dividend will firstly be regarded as having been paid out of those profits. Any balance is treated as having been paid out of the attributable income of the current statutory accounting period. Taxation Determination TD 2003/27 provides further guidance on how the attributable income of a CFC is reduced in these circumstances.
Last modified: 05 Dec 2006QC 18000