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  • Related foreign companies


    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Under section 160AFB, an Australian company is treated as related to any number of linked foreign companies provided that:

    • each company in the chain - starting with the Australian company - has at least a 10% voting interest in the company in the tier below it, and
    • the Australian company has a direct or indirect interest of at least 5% in the voting shares of each foreign company that is a member of the chain.

    A chain of related companies cannot include a trust or partnership - that is, the chain will be broken by the interposition of a trust or partnership.

    Example 13: Related foreign companies

    Australian company A has a 50% voting interest in foreign company B, which in turn has a 10% voting interest in foreign company C. Both B and C will be treated as related to A.

    Step 1

    Are the companies members of the same group?

    Yes - each company in the chain, starting with the Australian company, has at least a 10% voting interest in the company in the tier below it.

    Step 2

    Does company A have a 5% or more direct or indirect voting interest?

    Yes - company A has a voting interest of 50% (50% × 100%) in company B and a voting interest of 5% (50% × 10%) in company C.

    Step 3

    Are the companies related?

    Yes - both tests are satisfied for both companies B and C. Therefore, they are both related to company A.

    End of example
    Last modified: 05 Dec 2006QC 18000