INCOME TAX ASSESSMENT ACT 1936

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

Division 1 - Preliminary  

SECTION 326   AFI SUBSIDIARY  

326(1)   [When company an AFI subsidiary]  

For the purposes of this Part, a company is an AFI subsidiary (or an Australian financial institution subsidiary) at a particular time if either of the following paragraphs applies:


(a) at that time, there is a group of 5 or fewer AFI entities the aggregate of whose direct control interests and indirect control interests in the company is not less than 50%;


(b) both of the following subparagraphs apply:


(i) at that time, there is a single AFI entity (in this paragraph called the " assumed controller " ) the aggregate of whose direct control interests and indirect control interests in the company is not less than 40%;

(ii) at that time, the company is not controlled by a group of entities not being or including the assumed controller or any of its associates.

326(2)   [AFI entity]  

A reference in this section to an AFI entity is a reference to:


(a) a company that is an AFI; or


(b) a 100% subsidiary of such a company.

326(3)   [Company a 100% subsidiary of holding company]  

For the purposes of this section, a company (in this subsection called the ``subsidiary company'' ) is taken to be the 100% subsidiary of another company (in this subsection called the ``holding company'' ) at a particular time if:


(a) at that time, all the shares in the subsidiary company were beneficially owned by:


(i) the holding company; or

(ii) a company that is, or 2 or more companies each of which is, a 100% subsidiary of the holding company; or

(iii) the holding company and a company that is, or 2 or more companies each of which is, a 100% subsidiary of the holding company; and


(b) there was no agreement, arrangement or understanding in force at that time by virtue of which any person was in a position, or would be in a position after that time, to affect rights of the holding company or of a 100% subsidiary of the holding company in relation to the subsidiary company.

326(4)   [Subsidiary of 100% subsidiary company]  

For the purposes of this section, where a company is a 100% subsidiary of another company (including a company that is such a 100% subsidiary by virtue of another application or other applications of this subsection), every company that is a 100% subsidiary of the first-mentioned company is taken to be a 100% subsidiary of that other company.

326(5)   [Right, power or option re subsidiary company]  

For the purposes of subsection (3), a person is taken to be in a position at a particular time to affect any rights of a company in relation to another company if, at that time, that person has a right, power or option (whether by virtue of any provision of the constituent document of either of those companies or by virtue of any agreement or instrument or otherwise) to acquire those rights or do an act or thing that would prevent the first-mentioned company from exercising those rights for its own benefit or receiving any benefits accruing by reason of those rights.


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