Tax Laws Amendment (2007 Measures No. 4) Act 2007 (143 of 2007)

Schedule 1   New foreign income tax offset rules

Part 4   Consequential and other amendments

Income Tax Assessment Act 1936

120   Subsections 431(4), (4A), (4B) and (4C)

Repeal the subsections, substitute:

(4) A loss for a statutory accounting period is to be taken into account under subsection (2) only if:

(a) where the eligible CFC is a resident of a listed country at the end of the eligible period:

(i) the eligible CFC is a resident of a listed country at the end of that statutory accounting period; and

(ii) if there are any statutory accounting periods (the intervening periods ) occurring between that statutory accounting period and the eligible period - the eligible CFC was a resident of a listed country at the end of each of the intervening periods; or

(b) where the eligible CFC is a resident of an unlisted country at the end of the eligible period:

(i) the eligible CFC is a resident of an unlisted country at the end of that statutory accounting period; and

(ii) if there are any statutory accounting periods (also the intervening periods ) occurring between that statutory accounting period and the eligible period - the eligible CFC was a resident of an unlisted country at the end of each of the intervening periods.

(4A) If:

(a) at the end of both the eligible period and of a prior statutory accounting period, the eligible CFC was a resident of the same country; and

(b) the country was either:

(i) a listed country at the end of the eligible period and an unlisted country at the end of that statutory accounting period; or

(ii) an unlisted country at the end of the eligible period and a listed country at the end of that statutory accounting period;

subsection (4) does not prevent a loss for that statutory accounting period, or an earlier statutory accounting period, from being taken into account under subsection (2).

(4B) If:

(a) the eligible CFC is a resident of an unlisted country at the end of the eligible period; and

(b) that country emerged from the dissolution of another country; and

(c) the other country was in existence at the end of a prior statutory accounting period; and

(d) at the end of that statutory accounting period, the CFC was a resident of the other country; and

(e) the other country was a listed country at the end of that statutory accounting period;

subsection (4) does not prevent a loss for that statutory accounting period, or an earlier statutory accounting period, from being taken into account under subsection (2).