INCOME TAX ASSESSMENT ACT 1936

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

Division 8 - Active income test  

Subdivision A - Basic conditions for passing the active income test  

SECTION 432   ACTIVE INCOME TEST  

432(1)   [Conditions for passing active income test]  

Subject to sections 437 and 453 , for the purposes of this Part, a company is taken to pass the active income test in relation to a statutory accounting period if, and only if:


(a) the company was in existence at the end of the statutory accounting period; and


(b) there was no time during the statutory accounting period when the company was in existence when the company was neither a resident of a particular listed country nor of a particular unlisted country; and


(c) the company has kept accounts for the statutory accounting period and:


(i) the accounts are prepared in accordance with commercially accepted accounting principles; and

(ii) the accounts give a true and fair view of the financial position of the company; and


(d) the company has complied with the substantiation requirements set out in section 451 in relation to the statutory accounting period; and


(e) at all times during the statutory accounting period when the company was in existence and was a resident of a particular listed country, or of a particular unlisted country, the company carried on business in that country at or through a permanent establishment of the company in that country; and


(f) the tainted income ratio of the company for the statutory accounting period is less than 0.05.

432(2)  
(Repealed by No 41 of 2005)

432(3)   [Dormant companies]  

For the purposes of this section, if a company was dormant, within the meaning of Part VI of the Companies Act 1981 , throughout a particular period (in this subsection called the dormant period ) commencing on the day on which the company was incorporated, the company is to be taken not to have been in existence during the dormant period.


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