Taxation Determination

TD 1999/37A - Addendum

Income tax: does section 103-20 of the Income Tax Assessment Act 1997 apply in determining the capital gain or loss content of attributable income of a controlled foreign company?

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Addendum

This Addendum amends Taxation Determination TD 1999/37 to reflect the new translation rule in section 960-50 of the Income Tax Assessment act 1997 (ITAA 1997) made by the New Business Tax System (Taxation of Financial Arrangements) Act (No. 1) 2003 (Act No. 133 of 2003).

Act No. 133 of 2003 repealed section 103-20 of the ITAA 1997 and replaced it with a similar translation rule in table item 5 of subsection 960-50(6) of the ITAA 1997. These changes do not affect the decision in this Determination.

The changes apply to transactions or events happening on or after 1 July 2003.

However, Act No. 133 of 2003 contains a transitional provision which provides that section 103-20 of the ITAA 1997 continues to apply despite its repeal in relation to a transaction, event or thing that involves an amount in a foreign currency to which section 960-50 of the ITAA 1997 does not apply.

TD 1999/37 is amended as follows:

1. Paragraph 2

After the paragraph insert:

Note 3: References to section 103-20 of the ITAA 1997 in this Determination need to be read against the background that the New Business Tax System (Taxation of Financial Arrangements) Act (No. 1) 2003, which replaced section 103-20 with a similar translation rule in table item 5 of subsection 960-50(6) of the ITAA 1997, provided that section 103-20 of the ITAA 1997 continues to apply despite its repeal in relation to a transaction, event or thing that involves an amount in a foreign currency to which section 960-50 of the ITAA 1997 does not apply.

2. Legislative references

Omit the legislative references; substitute:

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ITAA 1936 Pt X

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ITAA 1936 Pt X Div 7 Subdiv C

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ITAA 1997 103-20

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ITAA 1997 Pt 3-1

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ITAA 1997 Pt 3-3

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ITAA 1997 960-50

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ITAA 1997 960-50(6)

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New Business Tax System (Taxation of Financial Arrangements) Act (No. 1) 2003

This Addendum applies on or after 1 July 2003.

Commissioner of Taxation
7 March 2007

References

ATO references:
NO 2006/20258

Related Rulings/Determinations:

TD 1999/37