INCOME TAX ASSESSMENT ACT 1936

PART X - ATTRIBUTION OF INCOME IN RESPECT OF CONTROLLED FOREIGN COMPANIES  

Division 7 - Calculation of attributable income of CFC  

Subdivision B - General modifications of Australian tax law  

SECTION 402   ADDITIONAL NOTIONAL EXEMPT INCOME - UNLISTED OR LISTED COUNTRY CFC  

402(1)   [Application of section]  

This section applies where the eligible CFC is a resident of either a listed country or an unlisted country at the end of the eligible period.

402(2)   [Notional exempt income]  

Each of the following is notional exempt income of the eligible CFC in relation to the eligible period:


(a) income or other amounts derived by the eligible CFC in the eligible period that are included in the assessable income of the eligible CFC of any year of income for the purposes of this Act apart from this Part, other than amounts that are so included under section 143 (where the proviso to that section does not apply);


(b) so much of a frankable distribution, paid to the eligible CFC in the eligible period, as is either the franked part of the distribution, or the part of the distribution that has been franked with an exempting credit;


(c) (Repealed by No 96 of 2004)


(e) a premium paid or credited to the eligible CFC in the eligible period, where, because of the application of subsection 148(1) for the purposes of this Act apart from this Part, the premium is not, for those purposes, allowable as a deduction to the person referred to in subparagraph 148(1)(a)(i) and is not included in the assessable income of the eligible CFC.

402(2A)  
(Repealed by No 114 of 2010)

402(2B)  
(Repealed by No 114 of 2010)

402(2C)  
(Repealed by No 114 of 2010)

402(3)   [Notional exempt income from attribution account payment]  

If:


(a) an attribution account entity makes an attribution account payment to the eligible CFC in the eligible period; and


(b) apart from this subsection, the whole or part of the attribution account payment would be included in the notional assessable income of the eligible CFC in relation to the eligible taxpayer for the eligible period; and


(c) on the making of the attribution account payment, an attribution debit arises for the attribution account entity in relation to the eligible taxpayer;

then so much (if any) of the whole or the part of the attribution account payment as does not exceed the grossed-up amount of the attribution debit is notional exempt income of the eligible CFC for the eligible period.

402(4)   [ Effect of post FIF abolition debit]  

If:


(a) a FIF attribution account entity (within the meaning of former Part XI ) makes a FIF attribution account payment (within the meaning of former Part XI ) to the eligible CFC in the eligible period; and


(b) apart from this subsection, the whole or part of the FIF attribution account payment would be included in the notional assessable income of the eligible CFC in relation to the eligible taxpayer for the eligible period; and


(c) on the making of the FIF attribution account payment, a post FIF abolition debit arises under section 23AK for the FIF attribution account entity in relation to the eligible taxpayer;

so much (if any) of the whole or the part of the FIF attribution account payment as does not exceed the grossed up amount of the post FIF abolition debit is notional exempt income of the eligible CFC for the eligible period.

402(5)   [ Grossed up amount of the post FIF abolition debit]  

For the purposes of subsection (4), the grossed up amount of the post FIF abolition debit is:


(a) where subparagraph 23AK(3)(b)(i) applied in relation to the debit - the amount of the debit; or


(b) where subparagraph 23AK(3)(b)(ii) applied in relation to the debit - the amount of the debit, divided by the FIF attribution account percentage referred to in that subparagraph.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.