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  • Chapter 6: Consolidation (consolidated income tax treatment for groups of entities)


    This chapter simply provides a summary of the provisions that relate to the application of income attributed from CFCs and included in the assessable income of a head company of a consolidated group. Detailed information on the operation of consolidation is contained in the Consolidation reference manual. See also More information on consolidation.

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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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    For income tax purposes, consolidation is optional. However, if the head company of a wholly-owned resident group decides to consolidate, all its wholly-owned eligible Australian resident group entities must become members of that consolidated group.

    The choice to consolidate is irrevocable. Once a group has consolidated it is treated as a single entity for income tax purposes.

    Where a foreign company, either directly or through its wholly-owned foreign group, has multiple entry points of investment into Australia through Australian resident companies, special multiple entry consolidated (MEC) group rules apply to enable eligible wholly-owned resident companies and their eligible wholly-owned resident subsidiary entities to consolidate.

    The following losses and tax attributes can generally be brought into a consolidated group or MEC group, and be used by the group's head company:

    • losses
    • franking credits, and
    • attribution account surpluses.
      Last modified: 29 Jun 2011QC 23930