• Gross tainted turnover

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

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    Gross tainted turnover is the part of the gross turnover that is either passive income, tainted sales income or tainted services income.

    Broadly, passive income includes:

    • dividends
    • tainted interest income
    • annuity income
    • tainted rental income
    • tainted royalty income
    • amounts derived as consideration for the assignment in whole or part of any copyright, patent, design, trade mark or other like property or right
    • net gains on the disposal of tainted asset
    • income derived in carrying on a business of trading in tainted assets
    • net tainted commodity gains
    • net tainted currency exchange gains.

    Tainted sales income and tainted services income are, broadly, income from certain transactions with, or originating from, associates or Australian residents.

    The gross tainted turnover is worked out using the following five steps:

    Step 1

    Identify the part of gross revenue that is passive income.

    Step 2

    Add the part of gross revenue that is tainted services income.

    Step 3

    Add the part of gross revenue that is tainted sales income.

    Step 4

    Add the part of the gross turnover that is net tainted gains.

    Step 5

    Add the CFC's share of the gross tainted turnover of each partnership in which it was a partner.

    Steps 1, 2 and 3 - Identify the tainted part of gross revenue

    Identify which parts of the gross revenue are passive income, tainted sales income or tainted services income - that is, determine the tainted part of the result after step 3 of the calculation of gross turnover.

    Step 4 - Identify tainted net gains

    Identify the parts of the net gains that are tainted - that is:

    • the part of the net gain from the disposal of commodity investments that is tainted
    • the part of the net gain from currency exchange rate fluctuations that is tainted, and
    • the part of the net gain from the disposal of assets - other than trading stock or commodity investments - that is tainted.

    Each of the net tainted gains is calculated separately and cannot exceed the amount of the net gain to which it relates. To do this you will need, in each case, to calculate the net gain and the net tainted gain. If the net tainted gain is greater than the net gain, use the net gain instead of the net tainted gain.

    Step 5 - Identify the CFC's share of a partnership's gross tainted turnover

    Go through steps 1 to 4 for each partnership in which a CFC was a partner. The CFC's share of the gross tainted turnover of each partnership is then added to the CFC's tainted income that was derived directly.

    Last modified: 05 Dec 2006QC 18000