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Condition 5 - Tainted income ratio less than 5%

Last updated 4 December 2006

To pass the active income test, the tainted income ratio of a CFC for a statutory accounting period must be less than 0.05 - that is, less than 5%. If both the bottom line and the top line of the relevant formula is nil, the CFC is taken to have passed the active income test.

QC18000