Taxation Laws Amendment (Foreign Income) Act 1990 (Cth)
This compilation was prepared on 6 October 2010
taking into account amendments up to Act No. 75 of 2010
The text of any of those amendments not in force
on that date is appended in the Notes section
The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section
Prepared by the Office of Legislative Drafting and Publishing,
Attorney-General’s Department, Canberra
TABLE OF PROVISIONS
PART 1 - PRELIMINARY
Section
Short title [
Commencement [
PART 2 - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936
Principal Act
Interpretation
Foreign income and foreign tax
Grossing-up of foreign income
Income beneficially derived
Insertion of new sections:
Exemption of foreign branch profits of Australian
companies
Exemption of amounts paid out of attributed income
Exemption of certain non-portfolio dividends from foreign
countries
Insertion of new section:
Distribution benefits - CFCs
Repeal of section and substitution of new section:
Limitation on deductions for foreign income
General domestic losses of post-1989 years of income
General domestic losses of pre-1990 years of income
Film losses of pre-1990 years of income
Primary production losses of pre-1990 years of income
Transfer of loss within company group
Receipt of trust income not previously subject to tax
Revocable trusts
Insertion of new Division:
Object of Division
Interpretation
Each listed country and unlisted country to be treated as
a separate foreign country
`Subject to tax' - application of subsection 324 (2)
Listed country trust estates
Public unit trusts
When entity is in a position to control a trust estate
Non-resident family trusts
Transfer of property or services
Deemed transfers of property or services to trust estate
Division not to apply to transfers by trustees of deceased
estates
from Certain Non-resident Trust Estates
Payment of interest by taxpayer on distributions from
certain non-resident trust estates
Winding-up of non-resident trust estates - tax rebates
Winding-up of non-resident discretionary trusts –
adjustment of tax treatment of beneficiaries
Winding-up of non-resident trust estates – modified
accruals system of taxation
When trust estate is taken to be completely wound up
Object of Subdivision
Accruals system of taxation - attributable taxpayer
Attributable income of a trust estate
Double tax agreements to be disregarded
Certain provisions to be disregarded in calculating
attributable income
Income and expenses to be expressed in Australian currency
Modified application of trading stock provisions
Modified application of depreciation provisions
Modified application of Division 13 of Part III
Modified application of Part IIIA
Modified application of loss provisions - pre-1990-91
losses
Assessable income of attributable taxpayer to include
attributable income of trust estate to which taxpayer has
transferred property or services
Accruals system of taxation does not apply to small
amounts
Only resident partners, beneficiaries etc. liable to be
assessed as a result of attribution
Keeping of records
Loans etc. to shareholders and associates deemed to be dividends
Interpretation
Deductions to be allowable for expenditure incurred in gaining
superannuation premiums
Deductions to be allowable for expenditure incurred in gaining the
investment component of certain premiums
Exemption of income attributable to certain policies etc.
Repeal of section 112B
Notional Part IIIA disposals of fund assets
Amount of assessable income in particular class
Consequential adjustments to assessable income and allowable
deductions
Interpretation
Insertion of new section:
Passive income
Credits in respect of foreign tax
Certain dividends deemed to be interest income
Foreign underlying tax
Insertion of new sections:
Foreign tax in respect of amounts assessable under
section 456
Foreign tax in respect of amounts assessable under
section 457
Foreign tax in respect of amounts assessable under
section 458
Foreign tax in respect of amounts exempt under
section 23AI
Repeal of section and substitution of new section:
Losses of previous years
Carry-forward and transfer of excess credits
Penalty for false or misleading statements
What constitutes a disposal or acquisition
Capital gains and capital losses
Insertion of new section:
Adjustment where section 47A applies to rolled-over assets
Return of capital on investment in trust
Transfer of asset from company or trust to spouse upon breakdown of
marriage
Transfer of asset between companies in the same group
Transfer of asset from subsidiary to holding company for no
consideration
Commissioner may collect tax from person owing money to taxpayer
Assessment where no administration
Penalty for false or misleading statements
Interpretation
Insertion of new section:
Offshore information notices
Insertion of new Part:
PART X - ATTRIBUTION OF INCOME IN RESPECT OF CONTROLLED FOREIGN
COMPANIES
Object of Part
Interpretation
Associates
Statutory accounting period of a company
Listed countries and unlisted countries
Each listed country and each unlisted country to be
treated as a separate foreign country
Meaning of `entitled to acquire'
State foreign taxes may be treated as federal foreign
taxes
When income or profits subject to tax in a listed country
When dividends etc. taxed in a listed country at normal
company tax rate
AFI subsidiary
Eligible finance shares
Non-resident family trusts
Public unit trusts
Tax detriment
Company deemed to be treated as a resident of a listed
country or an unlisted country for the purposes of the tax
law of that country
Companies that are residents of listed countries
Companies that are residents of unlisted countries
Member of a non-portfolio company group
References extend to pre-commencement matters and things
Australian entity
Australian partnership
Australian trust
Controlled foreign entity (CFE)
Controlled foreign company (CFC)
Controlled foreign partnership (CFP)
Controlled foreign trust (CFT)
Interpretation
References to transfer of property or services
Deemed transfers of property or services
Circumstances in which a transfer of property or services
is an eligible business transaction
Eligible transferor in relation to a discretionary trust
Eligible transferor in relation to a non-discretionary
trust or a public unit trust
Associate-inclusive control interest in a company or trust
Direct control interest in a company
Direct control interest in a trust
Indirect control interest in a company or trust
Control tracing interest in a company
Control tracing interest in a CFP
Control tracing interest in a CFT
Direct attribution interest in a CFC or CFT
Indirect attribution interest in a CFC or CFT
Attribution tracing interest in a CFC
Attribution tracing interest in a CFP
Attribution tracing interest in a CFT
Attributable taxpayer in relation to a CFC or a CFT
Attribution percentage of an attributable taxpayer
Attribution account entity
Attribution account percentage
Attribution account payment
Direct attribution account interest in a company
Direct attribution account interest in a partnership
Direct attribution account interest in a trust
Indirect attribution account interest in an entity
Attribution surplus
Attribution credit
Attribution debit
Grossed-up amount of an attribution debit
Attributed tax account surplus
Attributed tax account credit
Attributed tax account debit
Exempting receipt of an unlisted country company
Exempting profits
Exempting profits percentage
Exempting receipt of a section 6 resident company
Separate attributable income for each attributable
taxpayer
Attributable income is taxable income calculated on
certain assumptions
Basic assumptions
Additional assumption for unlisted country CFC
Additional assumption for listed country CFC
Adjusted tainted income
Reduction of attributable income because of interim
dividends
Double tax agreements to be disregarded
Certain provisions to be disregarded in calculating
attributable income
Elections to be made by eligible taxpayer
Income and expenses to be expressed in Australian currency
Notional assessable amounts are to be pre-tax
Notional allowable deduction for taxes paid
Notional allowable deduction for eligible finance share
dividends
Expenditure incurred to produce income or profits in later
statutory accounting periods
Modified application of sections 25A and 52
Modified application of trading stock provisions
Modified application of depreciation provisions
Modifications of net income of partnerships and trusts
Modified application of Division 13 of Part III
Reduction of disposal consideration where attributed
income not distributed
Additional notional exempt income - unlisted or listed
country CFC
Additional notional exempt income - unlisted country CFC
Additional notional exempt income - listed country CFC
Interpretation
Meaning of `30 June 1990 non-taxable Australian asset'
Certain provisions of this Subdivision to be treated as
provisions of Part IIIA
Part IIIA not to apply to disposals of taxable Australian
assets
Losses on disposals before end of 30 June 1990 to be
disregarded
Modified application of Part IIIA - general modifications
30 June 1990 non-taxable Australian assets taken to have
been acquired on that date
Cost base of 30 June 1990 non-taxable Australian asset
Adjustment of cost base as at 30 June 1990 - return of
capital
Rights to acquire shares or share options
Rights to acquire units or unit options
Company-issued options to acquire unissued shares
Unit trust-issued options to acquire unissued units
Options
Modified application of section 160ZZO (transfer of asset
between companies in the same group)
Modified application of section 160ZZOA (transfer of asset
from subsidiary to holding company for no consideration)
Elections under CGT roll-over provisions
Adjustment of disposal consideration where change of
residence by eligible CFC from unlisted to listed country
Adjustment of disposal consideration where section 47A
applies to rolled-over assets
Classes of notional assessable income
Sometimes-exempt income etc.
Creation of loss in relation to a class of notional
assessable income
Certain provisions to be disregarded
Subdivision to apply as if there were always a requirement
to calculate attributable income
Notional allowable deduction for (sometimes-exempt income)
loss of a particular class
Limitation on deductions for classes of notional
assessable income
Deduction etc. for previous period loss in relation to a
class of notional assessable income
Active income test
Tainted income ratio
Gross turnover
Gross tainted turnover
Amounts excluded from active income test
Treatment of partnership income
Roll-overs - asset disposals
When currency exchange gains or losses relate to active
income transactions
Asset disposals - revaluations and arm's length amounts
Hire-purchase and other property financing transactions
Assumption of rights of lender under a loan
Net tainted commodity gains
Net tainted currency exchange gains
Net gains - disposal of tainted assets
Passive income
Tainted sales income
Tainted services income
AFI subsidiaries - interest income
AFI subsidiaries - asset disposals and currency
transactions
Active income test - substantiation requirements for
company
Active income test - substantiation requirements for
partnership
Active income test - substantiation requirements for
attributable taxpayer
Assessment on assumption - retention of accounts etc. and
compliance with information notices
Amendment of assessments
Assessability in respect of CFC's attributable income
Assessability where CFC changes residence from unlisted
country to listed country or to Australia
Assessability in respect of certain dividends paid by a
CFC
Assessability in respect of certain dividends deemed to be
paid by a CFC under section 47A
Only resident partners, beneficiaries etc. liable to be
assessed as a result of attribution
Reduction of disposal consideration where attributed
income not distributed
Keeping of records - section 456
Keeping of records - section 458
Keeping of records - section 459
Offence of failing to keep records
Manner in which records required to be kept
Circumstances where records not required to be kept –
reasonable excuse etc.
Treatment of partnerships
Interpretation
Application of amendments
Transitional - section 108 of the amended Act
Transitional - section 160AFD of the amended Act
Transitional - section 319 of the amended Act
Transitional - section 458 of the amended Act
Transitional - section 459 of the amended Act
Transitional - CFT distributions
Transitional - change of CFC residence from unlisted to listed
country
Transitional - change of CFC residence from unlisted country to
Australia
Transitional - regulations
PART 3 - AMENDMENT OF THE INCOME TAX (INTERNATIONAL AGREEMENTS) ACT
1953
Principal Act
Interpretation
Application of amendments
PART 4 - AMENDMENT OF THE TAXATION ADMINISTRATION ACT 1953
Principal Act
Interpretation
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991 - LONG TITLE
An Act to amend the law relating to taxation
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 1
Short title [
1. This Act may be cited as the Taxation Laws Amendment (Foreign Income) Act
1990.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 2
Commencement [
2. This Act commences on the day on which it receives the Royal Assent.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 3
Principal Act
3. In this Division, "Principal Act" means the Income Tax Assessment Act
1936*1*.
*1* No. 27, 1936, as amended. For previous amendments, see No. 88, 1936; No.
5, 1937; No. 46, 1938; No. 30, 1939; Nos. 17 and 65, 1940; Nos. 58 and 69,
1941; Nos. 22 and 50, 1942; No. 10, 1943; Nos. 3 and 28, 1944; Nos. 4 and 37,
1945; No. 6, 1946; Nos. 11 and 63, 1947; No. 44, 1948; No. 66, 1949; No. 48,
1950; No. 44, 1951; Nos. 4, 28 and 90, 1952; Nos. 1, 28, 45 and 81, 1953; No.
43, 1954; Nos. 18 and 62, 1955; Nos. 25, 30 and 101, 1956; Nos. 39 and 65,
1957; No. 55, 1958; Nos. 12, 70 and 85, 1959; Nos. 17, 18, 58 and 108, 1960;
Nos. 17, 27 and 94, 1961; Nos. 39 and 98, 1962; Nos. 34 and 69, 1963; Nos. 46,
68, 110 and 115, 1964; Nos. 33, 103 and 143, 1965; Nos. 50 and 83, 1966; Nos.
19, 38, 76 and 85, 1967; Nos. 4, 70, 87 and 148; 1968; Nos. 18, 93 and 101,
1969; No. 87, 1970; Nos. 6, 54 and 93, 1971; Nos. 5, 46, 47, 65 and 85, 1972;
Nos. 51, 52, 53, 164 and 165, 1973; No. 216, 1973 (as amended by No. 20,
1974); Nos. 26 and 126, 1974; Nos. 80 and 117, 1975; Nos. 50, 53, 56, 98, 143,
165 and 205, 1976; Nos. 57, 126 and 127, 1977; Nos. 36, 57, 87, 90, 123, 171
and 172, 1978; Nos. 12, 19, 27, 43, 62, 146, 147 and 149, 1979; Nos. 19, 24,
57, 58, 124, 133, 134 and 159, 1980; Nos. 61, 92, 108, 109, 110, 111, 154 and
175, 1981; Nos. 29, 38, 39, 76, 80, 106 and 123, 1982; Nos. 14, 25, 39, 49,
51, 54 and 103, 1983; Nos. 14, 42, 47, 63, 76, 115, 124, 165 and 174, 1984;
No. 123, 1984 (as amended by No. 65, 1985); Nos. 47, 49, 104, 123, 168 and
174, 1985; No. 173, 1985 (as amended by No. 49, 1986); Nos. 41, 46, 48, 51,
109, 112 and 154, 1986; No. 49, 1986 (as amended by No. 141, 1987); No. 52,
1986 (as amended by No. 141, 1987); No. 90, 1986 (as amended by No. 141,
1987); Nos. 23, 58, 61, 120, 145 and 163, 1987; No. 62, 1987 (as amended by
No. 108, 1987); No. 108, 1987 (as amended by No. 138, 1987); No. 138, 1987 (as
amended by No. 11, 1988); No. 139, 1987 (as amended by Nos. 11 and 78, 1988);
Nos. 8, 11, 59, 75, 78, 80, 87, 95, 97, 127 and 153, 1988; Nos. 2, 11, 56, 70,
73, 97, 105, 107, 129, 163 and 167, 1989; No. 97, 1989 (as amended by No. 105,
1989); and Nos. 20, 35, 37, 45, 57, 58, 60 and 61, 1990.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 4
Interpretation
4. Section 6 of the Principal Act is amended:
by omitting "or" from the end of paragraph (a) of the definition of
"assessment" in subsection (1);
by inserting after paragraph (a) of the definition of "assessment" in
subsection (1) the following paragraph:
the ascertainment of the amount of interest
payable under section 102AAM; or".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 5
Foreign income and foreign tax
5. Section 6AB of the Principal Act is amended:
by adding at the end of subsection (1) ", and includes a reference to
an amount included in assessable income under section 102AAZD, 456, 457, 458
or 459.";
by omitting subsection (2) and substituting the following subsection:
"(2) A reference in this Act to foreign tax is a reference to:
tax imposed by a law of a foreign country, being:
tax upon income; or
tax upon profits or gains, whether of an income or capital nature; or
tax deemed by section 160AFC to have been paid in respect of a
dividend; or
any other tax, being a tax that is subject to an agreement having the
force of law under the Income Tax (International Agreements) Act 1953;
but does not include a unitary tax or a credit absorption tax; or
any of the following:
tax that is taken, because of section 160AFCA, to have been paid in
respect of an amount included in assessable income under section 456;
tax that is taken, because of section 160AFCB, to have been paid in
respect of an amount included in assessable income under section 457;
tax that is taken, because of section 160AFCC, to have been paid in
respect of an amount included in assessable income under section 458;
tax that is taken, because of section 160AFCD, to have been paid in
respect of the section 23AI exempt part of an attribution account payment
(within the meaning of section 160AFCD).";
by inserting after subsection (3) the following subsection:
"(3A) Except as provided by section 160AFCA, 160AFCB, 160AFCC or 160AFCD, a
taxpayer is not taken to have been personally liable for, and to have paid,
foreign tax in respect of:
an amount included in assessable income under
section 102AAZD, 456, 457, 458 or 459; or
the section 23AI exempt part of an attribution
account payment (within the meaning of section 160AFCD).".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 6
Grossing-up of foreign income
6. Section 6AC of the Principal Act is amended by adding at the end the
following subsections:
"(3) Where a taxpayer is, because of section 160AFCA, taken to have paid an
amount of foreign tax in respect of an amount included in the assessable
income of the taxpayer under section 456 (in this subsection called the
`section 456 amount'), the section 456 amount is taken, for the purposes of
this Act (other than sections 160AFCA and 371) to be increased by the amount
of that tax.
"(4) Where a taxpayer is, because of section 160AFCB, taken to have paid an
amount of foreign tax in respect of an amount included in the assessable
income of the taxpayer under section 457 (in this subsection called the
`section 457 amount'), the section 457 amount is taken, for the purposes of
this Act (other than sections 160AFCB and 371) to be increased by the amount
of that tax.
"(5) Where a taxpayer is, because of section 160AFCC, taken to have paid an
amount of foreign tax in respect of an amount included in the assessable
income of the taxpayer under section 458 (in this subsection called the
`section 458 amount'), the section 458 amount is taken, for the purposes of
this Act (other than sections 160AFCC and 371) to be increased by the amount
of that tax.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 7
Income beneficially derived
7. Section 6B of the Principal Act is amended:
by inserting after subsection (1) the following subsection:
"(1A) For the purposes of this Act, an amount of
income derived by a person, being income other than passive income, is to be
taken to be income attributable to passive income:
if the person derived the amount of income by
reason of being beneficially entitled to an amount representing passive
income; or
if the person derived the amount of income as
a beneficiary in a trust estate and the amount of income can be attributed,
directly or indirectly, to passive income or to an amount that is taken, by
any application or successive applications of this subsection, to be an amount
of income attributable to passive income.";
by omitting paragraph (2A) (b) and substituting the following
paragraph:
if the income so derived is, by virtue of
subsection (1), (1A) or (2), attributable to a dividend, passive income or
interest income derived from that source.";
(c) by inserting after subsection (2A) the following subsection:
"(2AA) In subsections (1A) and (2A), `passive
income' has the same meaning as in section 160AEA.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 8
8. After section 23AG of the Principal Act the following sections are
inserted:
Exemption of foreign branch profits of Australian companies
"23AH. (1) For the purposes of subsections (2) and (3), if the following
conditions are satisfied in relation to foreign income derived by a taxpayer:
the foreign income is derived by the taxpayer during the year of income
commencing on 1 July 1990 or a subsequent year of income;
the foreign income is derived in carrying on a business in a listed
country at or through a permanent establishment of the taxpayer in the listed
country;
the foreign income is not eligible designated concession income in
relation to any listed country in relation to the year of income;
the foreign income is subject to tax in any listed country in a tax
accounting period:
ending before the end of the year of income; or
commencing during the year of income; then:
the foreign income is foreign branch income; and
the taxpayer is the original taxpayer in relation to the foreign branch
income.
"(2) If the original taxpayer in relation to the foreign branch income is a
company, the assessable income of the company does not include so much of the
foreign branch income as is attributable to a period when the company was a
resident. "(3) If:
the original taxpayer in relation to the foreign branch income is the
trustee of a trust estate or a partnership; and
the following conditions are satisfied in relation to another taxpayer
(in this subsection called the `actual taxpayer'):
the actual taxpayer is a company;
apart from this subsection, an amount is included in the assessable
income of the actual taxpayer of a year of income (in this subsection called
the `current year of income') under subsection 92 (1) or section 97, 98A or
100;
the whole or a part of the amount so included in the actual
taxpayer's assessable income (which whole or part is in this subsection called
the `taxpayer's portion of the foreign branch income') is attributable (either
directly or indirectly through one or more interposed trusts or partnerships)
to the foreign branch income;
the assessable income of the actual taxpayer of the current year of income
does not include so much of the taxpayer's portion of the foreign branch
income as is attributable to a period when the actual taxpayer was a
resident.
"(4) Subsections (2) and (3) of this section are to be disregarded in
applying subsection 160ZA (4).
"(5) For the purposes of subsection (1), where a taxpayer disposes, either
in whole or in part, of a business carried on in a listed country at or
through a permanent establishment of the taxpayer in the listed country, any
foreign income derived in the course of that disposal is taken to have been
derived in carrying on that business.
"(6) For the purposes of subsections (8) and (9), if the following
conditions are satisfied in relation to the disposal of an asset by a
taxpayer:
the asset is disposed of during:
the year of income commencing on 1 July 1990 (in this subsection called
the `disposal year of income'); or
a subsequent year of income (in this subsection also called the
`disposal year of income');
the asset consists of:
a unit of property for which depreciation is, or would apart from this
section be, allowable to the taxpayer under section 54 in respect of any year
of income; or
a building; or
(iii) land;
the asset was used by the taxpayer wholly or principally for the
purpose of producing foreign income from carrying on a business in a listed
country at or through a permanent establishment of the taxpayer in the listed
country;
the asset is not a taxable Australian asset of the taxpayer;
a gain or profit of a capital nature accrues to the taxpayer in respect
of the disposal of the asset;
that gain or profit is not eligible designated concession income in
relation to any listed country in relation to the disposal year of income;
that gain or profit is subject to tax in any listed country in a tax
accounting period:
ending before the end of the disposal year of income; or
commencing during the disposal year of income; then:
that gain or profit is a foreign branch capital gain; and
the taxpayer is the original taxpayer in relation to the foreign branch
capital gain.
"(7) For the purposes of subsections (8) and (9), if the following
conditions are satisfied in relation to the disposal of an asset of a taxpayer
(in this subsection called the `taxpayer's asset'):
the taxpayer's asset is disposed of during:
the year of income of the taxpayer commencing on1 July 1990 (in this
subsection called the `disposal year of income'); or
a subsequent year of income of the taxpayer (in this subsection also
called the `disposal year of income');
the taxpayer's asset consists of the taxpayer's interest in any of the
following partnership assets of a partnership in which the taxpayer is a
partner:
a unit of property for which depreciation is, or would apart from this
section be, allowable to the partnership under section 54 in respect of any
year of income;
a building;
(iii) land;
the partnership asset was used by the partnership wholly or principally
for the purpose of producing foreign income from carrying on a business in a
listed country at or through a permanent establishment of the partnership in
the listed country;
the taxpayer's asset is not a taxable Australian asset of the
taxpayer;
a gain or profit of a capital nature accrues to the taxpayer in respect
of the disposal of the taxpayer's asset;
that gain or profit is not eligible designated concession income in
relation to any listed country in relation to the disposal year of income;
that gain or profit is subject to tax in any listed country in a tax
accounting period:
ending before the end of the disposal year of income; or
commencing during the disposal year of income; then:
that gain or profit is a foreign branch capital gain;
the taxpayer is the original taxpayer in relation to the foreign branch
capital gain.
"(8) If the original taxpayer in relation to the foreign branch capital gain
is a company, no capital gain accrues to the company under Part IIIA in
respect of the disposal of the asset.
"(9) If:
the original taxpayer in relation to the foreign branch capital gain is
the trustee of a trust estate; and
the following conditions are satisfied in relation to another taxpayer
(in this subsection called the `actual taxpayer'):
the actual taxpayer is a company;
apart from this subsection, an amount is included in the assessable
income of the actual taxpayer of a year of income (in this subsection called
the `current year of income') under subsection 92 (1) or section 97, 98A or
100;
the whole or a part of the amount so included in the actual
taxpayer's assessable income (which whole or part is in this subsection called
the `taxpayer's portion of the foreign branch capital gain') is attributable
(either directly or indirectly through one or more interposed trusts or
partnerships) to the foreign branch capital gain;
the assessable income of the actual taxpayer of the current year of income
does not include so much of the taxpayer's portion of the foreign branch
capital gain as is attributable to a period when the actual taxpayer was a
resident.
"(10) Unless the contrary intention appears, an expression used in
subsections (6), (7) and (8) and in Part IIIA has the same meaning in those
subsections as it has in that Part.
"(11) Subsection 324 (2) applies in relation to this section in a
corresponding way to the way in which it applies in relation to Part X.
"(12) In this section:
`company' has the same meaning as in Part X;
`double tax agreement' has the same meaning as in Part X;
`eligible designated concession income' has the same meaning as in`foreign
income' includes an amount that:
apart from this section, would be included in assessable income under a
provision of this Act other than Part IIIA; and
is derived from sources in a foreign country;
`listed country' has the same meaning as in Part X;
`permanent establishment', in relation to a listed country:
if there is a double tax agreement in relation to the listed country -
has the same meaning as in the double tax agreement; or
in any other case - has the meaning given by subsection 6 (1);
`subject to tax' has the same meaning as in Part X;
`tax accounting period' has the same meaning as in Part X.
Exemption of amounts paid out of attributed income
"23AI. (1) Where:
either:
an attribution account payment of a kind
referred to in paragraph 365 (1) (a), (b), (c) or (e) is made to a taxpayer
(other than a partnership or taxpayer in the capacity of trustee of a trust);
or
an attribution account payment of a kind
referred to in paragraph 365 (1) (d) is made to a taxpayer; and
on the making of the payment, an attribution debit arises, for the
entity making the payment, in relation to the taxpayer;
the following provisions have effect:
if the payment is of a kind referred to in paragraph 365 (1) (a) - the
payment is exempt from tax to the extent of the debit;
if the payment is of a kind referred to in paragraph 365 (1) (b) and,
apart from this section, an amount would be included in the taxpayer's
assessable income under section 92 in respect of an individual interest in the
net income of the partnership of the year of income referred to in that
paragraph - that amount is not so included, to the extent of the debit;
if the payment is of a kind referred to in paragraph 365 (1) (c) and,
apart from this section, an amount would:
be included in the taxpayer's assessable
income under section 97, 98A or 100; or
be assessable to the trustee of the trust
referred to in that paragraph under section 98;
in respect of a share of the net income of the trust
of the year of income referred to in that paragraph - that amount is not so
included, or not so assessable, to the extent of the debit;
if the payment is of a kind referred to in paragraph 365 (l) (d) - the
payment is not, to the extent of the debit, assessable to the taxpayer as
mentioned in that paragraph;
if the payment is of a kind referred to in paragraph 365 (1) (e) and,
apart from this section, an amount would be included in the taxpayer's
assessable income, of the year of income referred to in that paragraph, under
section 99B in respect of the trust property referred to in that paragraph -
that amount is not so included to the extent of the debit.
"(2) This section is to be disregarded for the purposes of applying:
the definition of `foreign income deduction' in sections 79D and
160AFD; and
any other provision of this Act to determine allowable deductions.
"(3) In this section: `attribution account payment' has the same meaning as
in Part X;
`attribution debit' has the same meaning as in Part X;
`company' has the same meaning as in Part X;
`trust' has the same meaning as in Part X.
Exemption of certain non-portfolio dividends from foreign countries
"23AJ. (1) Where:
a non-portfolio dividend is paid to a taxpayer by a company that is a
resident of a listed or an unlisted country; and
the taxpayer is a company that is a resident within the meaning of
section 6;
then the dividend is exempt from income tax to the extent that it is an
exempting receipt of the taxpayer.
"(2) In this section:
`company' has the same meaning as in Part X;
`exempting receipt' has the same meaning as in Part X;
`non-portfolio dividend' has the same meaning as in Part X;
`resident of a listed country' has the same meaning as in Part X;
`resident of an unlisted country' has the same meaning as in Part X.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 9
9. After section 47 of the Principal Act the following section is inserted:
Distribution benefits - CFCs
"47A. (1) Subject to subsection (2), if:
a company (in this section called the `first company') has profits
immediately before a distribution time for a distribution benefit in relation
to the first company; and
the distribution time occurred after 3 June 1990; and
the first company is a CFC at the distribution time; and
the first company is a resident of an unlisted country at the
distribution time;
so much of the distribution payment in relation to the distribution time as
would not otherwise be a dividend and does not exceed the amount of those
profits is taken, for the purposes of this Act, to be a dividend paid by the
first company:
to the recipient of the benefit as a shareholder in the first company;
and
out of profits derived by the first company; and
at the distribution time.
"(2) If:
either of the following subparagraphs applies:
by virtue of subsection (1), the whole or a part of the distribution
payment is included in the assessable income of a taxpayer of the year of
income in which the distribution time occurred under section 44;
by virtue of subsection (1), an amount is included in the assessable
income of a taxpayer of a year of income under section 458 in respect of the
distribution payment; and
the taxpayer's return of income for the year of income was not prepared
on the basis that the distribution payment had the consequence specified in
subsection (1);
that subsection has effect in relation to the taxpayer and in relation to that
distribution payment as if the reference in that subsection to the purposes of
this Act were a reference to the purposes of this Act (other than Division 18,
section 365 and Division 6 of Part X).
"(3) Subject to subsections (9) and (12), a reference in this section to a
distribution benefit in relation to the first company is a reference to an
eligible benefit where the following conditions are satisfied:
the eligible benefit was provided to:
an associated entity in relation to the first company; or
another entity that, immediately after the time of the provision of
the eligible benefit, was an associated entity in relation to the first
company;
the eligible benefit was provided by:
the first company; or
an entity (in this subsection called the `arranger') other than the
first company under an arrangement between:
the first company; and
the arranger or another entity;
if subparagraph (b) (ii) applies - the first company made, or entered
into an undertaking to make, one or more transfers of property or services to
the arranger or to another entity (which transfers are in this section called
the `arrangement transfers') that are attributable, in whole or in part, to
the provision of the eligible benefit.
"(4) Where the first company entered into an undertaking to make one or more
arrangement transfers, the time of the arrangement transfers is the time the
undertaking was entered into.
"(5) Where, at a particular time, an entity (in this subsection called the
`provider') waives or releases the obligation of another entity (in this
subsection called the `recipient') to pay or repay to the provider an amount:
the waiver or release is taken to constitute an eligible benefit
provided at that time by the provider to the recipient; and
if the eligible benefit is a distribution benefit in relation to the
first company - each of the following times is a distribution time for the
eligible benefit:
if the eligible benefit was provided by the first company - the time of
the provision of the eligible benefit; or
in any other case - the time, or each of the times, of the arrangement
transfers concerned;
if the eligible benefit is a distribution benefit in relation to the
first company - the distribution payment in relation to the distribution time
is:
if the benefit was provided by the first company - the amount the
payment or repayment of which is waived or released; or
in any other case - so much of the amount or market value of the
arrangement transfer as is attributable to the provision of the eligible
benefit.
"(6) For the purposes of subsection (5), an entity is taken to be under an
obligation to pay or repay an amount even if the amount is not due for payment
or repayment.
"(7) Where, at a particular time, an entity (in this subsection called the
`provider') makes a loan to another entity (in this subsection called the
`recipient'), where:
the parties to the loan are not at arm's length with each other in
relation to the loan; or
the purpose, or one of the purposes, of the making of the loan was to
facilitate, directly or indirectly (through one or more interposed companies,
partnerships or trusts), the payment of a dividend that is, or would be:
exempt from tax under section 23AJ (in whole or in part); or
an exempting receipt for the purposes of section 377; or
the purpose, or one of the purposes, of the making of the loan was to
facilitate, directly or indirectly, the provision of an eligible benefit by
the recipient, being an eligible benefit that is a distribution benefit in
relation to any company;
the following provisions have effect:
the making of the loan is taken to constitute an eligible benefit
provided by the provider to the recipient at that time;
if the eligible benefit is a distribution benefit in relation to the
first company - each of the following times is a distribution time for the
eligible benefit:
if the benefit was provided by the first company - the time of the
provision of the benefit; or
in any other case - the time, or each of the times, of the arrangement
transfers concerned;
if the eligible benefit is a distribution benefit in relation to the
first company - the distribution payment in relation to the distribution time
is:
if the benefit was provided by the first company - the amount of the
loan; or
in any other case - so much of the amount or market value of the
arrangement transfer as is attributable to the provision of the eligible
benefit.
"(8) Where, at a particular time:
an entity (in this subsection called the `provider') acquires from a
company (in this subsection called the `recipient'):
a share in the recipient;
a right to acquire a share in the recipient;
an option to acquire a share in the recipient; or
an entity (in this subsection also called the `provider') acquires from
the trustee of a unit trust (in this subsection also called the `recipient'):
a unit in the recipient;
a right to acquire a unit in the recipient;
(iii) an option to acquire a unit in the recipient;
the following provisions have effect:
the acquisition is taken to constitute an eligible benefit provided by
the provider to the recipient at that time;
if the eligible benefit is a distribution benefit in relation to the
first company - each of the following is a distribution time for the eligible
benefit:
if the benefit was provided by the first company - the time of the
provision of the benefit; or
in any other case - the time, or each of the times, of the arrangement
transfers concerned;
if the eligible benefit is a distribution benefit in relation to the
first company - the distribution payment in relation to the distribution time
is:
if the benefit was provided by the first company - the amount or market
value of the consideration paid or given by the first company in respect of
the acquisition; or
in any other case - so much of the amount or market value of the
arrangement transfer as is attributable to the provision of the eligible
benefit;
if:
the eligible benefit is a distribution benefit in relation to the first
company; and
the provider transferred property or services to the recipient in
respect of the acquisition;
in determining the profits of the company immediately before the distribution
time, or the first distribution time, as the case requires, for the
distribution benefit, the following assumptions are to be made:
if the benefit was provided by the first company - the assumption
that, immediately before the distribution time, the company had:
disposed of the property or services to an entity other than the
recipient; and
received, in respect of that disposal, consideration equal to the
market value of the property or services;
if subparagraph (iii) does not apply - the assumption that,
immediately before the distribution time, the company had:
disposed of equivalent property or services to an entity other than the
recipient or the entity who provided the eligible benefit; and
received, in respect of that disposal, consideration equal to the
market value of the property or services.
"(9) An eligible benefit that is covered by subsection (8) and provided at a
particular time is not a distribution benefit in relation to the first company
if, at that time, there is no entity who is:
either:
the holder of an eligible equity interest in the first company; or
an associate of an entity who is the holder of an eligible equity
interest in the first company; and
the holder of an eligible equity interest in the recipient referred to
in that subsection.
"(10) Where:
an entity (in this subsection called the `provider') transfers property
or services to another entity (in this subsection called the `recipient');
and
the property or services are transferred:
for no consideration; or
for a consideration less than the market value of the property or
services; and
in the case of a transfer of services - the services do not consist of
the making of a loan; and
in any case - the property or services are not transferred by way of
consideration for the acquisition from a company of:
a share in the company; or
a right to acquire a share in the company; or
an option to acquire a share in the company; and
in any case - the property or services are not transferred in respect
of the acquisition from the trustee of a unit trust of:
a unit in the unit trust; or
a right to acquire a unit in the unit trust; or
an option to acquire a unit in the unit trust; and
in the case of a transfer of property - the property does not consist
of a payment in respect of a call on a share in a company;
the following provisions have effect:
the transfer is taken to constitute an eligible benefit provided by the
provider to the recipient at that time;
if the eligible benefit is a distribution benefit in relation to the
first company - each of the following is a distribution time for the eligible
benefit:
if the benefit was provided by the first company - the time of the
provision of the benefit; or
in any other case - the time, or each of the times, of the arrangement
transfers concerned;
if the eligible benefit is a distribution benefit in relation to the
first company - the distribution payment in relation to the distribution time
is:
if the benefit was provided by the first company - the amount by which
the amount or market value of the property or services exceeds the
consideration (including nil consideration) mentioned in paragraph (b); or
if subparagraph (i) does not apply and there is only one arrangement
transfer - the amount by which so much of the amount or market value of the
arrangement transfer as is attributable to the provision of the eligible
benefit exceeds the consideration (including nil consideration) mentioned in
paragraph (b); or
if subparagraph (i) does not apply and there are 2 or more
arrangement transfers - the amount worked out in relation to the arrangement
transfer using the following formula:
X Arrangement transfer
Total arrangement transfers
where:
`Total Excess' means the amount by which so much of the total amount or market
value of all of the arrangement transfers as is attributable to the provision
of theeligible benefit exceeds the consideration (including nil consideration)
mentioned in paragraph (b);
`Arrangement transfer' means the amount or market value of the arrangement
transfer concerned;
`Total arrangement transfers' means the total amount or market value of all of
the arrangement transfers;
if the eligible benefit is a distribution benefit in relation to the
first company - in determining the profits of the company immediately before a
distribution time for the distribution benefit, the following assumptions are
to be made:
if the benefit was provided by the first company - the assumption that,
immediately before the distribution time, the company had:
disposed of the property or services to an entity other than the
recipient; and
received, in respect of that disposal, consideration equal to the
market value of the property or services;
if subparagraph (i) does not apply and there is only one arrangement
transfer - the assumption that, immediately before the distribution time, the
company had:
disposed of the property or services covered by the arrangement
transfer to an entity other than the entity who provided the eligible benefit;
and
received, in respect of that disposal, consideration equal to the
market value of the property or services;
if subparagraph (i) does not apply and there are 2 or more
arrangement transfers - the assumption that, immediately before each
distribution time, the company had:
disposed of the property or services covered by the arrangement
transfer concerned to an entity other than the entity who provided the
eligible benefit; and
received, in respect of that disposal, consideration equal to the
market value of the property or services.
"(11) Where, at a particular time, an entity (in this subsection called the
`provider') makes a payment to another entity, being a company (in this
subsection called the `recipient'), in respect of a call on a share in the
recipient:
the making of the payment is taken to constitute an eligible benefit
provided by the provider to the recipient at that time; and
if the eligible benefit is a distribution benefit in relation to the
first company - each of the following is a distribution time for the eligible
benefit:
if the benefit was provided by the first company - the time of the
provision of the benefit; or
in any other case - the time, or each of the times, of the arrangement
transfers concerned;
if the eligible benefit is a distribution benefit in relation to the
first company - the distribution payment in relation to the distribution time
is:
if the benefit was provided by the first company - the amount of the
payment; or
in any other case - so much of the amount or market value of the
arrangement transfer as is attributable to the provision of the eligible
benefit.
"(12) An eligible benefit that is covered by subsection (11) and provided at
a particular time is not a distribution benefit in relation to the first
company if, at that time, there is no entity who is:
either:
the holder of an eligible equity interest in the first company; or
an associate of an entity who is the holder of an eligible equity
interest in the first company; and
the holder of an eligible equity interest in the recipient referred to
in that subsection.
"(13) If:
apart from this subsection, a particular eligible benefit that is
covered by subsection (8) or (11) and provided at a particular time is not a
distribution benefit in relation to the first company only because of
subsection (9) or (12); and
at a later time, there is an entity who is:
either:
the holder of an eligible equity interest in the first company; or
an associate of an entity who is the holder of an eligible equity
interest in the first company; and
the holder of an eligible equity interest in the recipient referred to
in whichever of subsections (8) and (11) is applicable;
the following provisions have effect:
this section has effect as if subsection (9) or (12), as the case
requires, had never applied in relation to that eligible benefit;
section 170 does not prevent the amendment of an assessment at any time
for the purposes of giving effect to this subsection.
"(14) If:
apart from this subsection, a particular eligible benefit (in this
subsection called the `first eligible benefit') that is covered by subsection
(8) or (11) and provided at a particular time is not a distribution benefit in
relation to the first company only because of subsection (9) or (12); and
the recipient referred to in whichever of subsections (8) and (11) is
applicable provides an eligible benefit (in this subsection called the `second
eligible benefit') to:
the first company; or
the provider referred to in whichever of those subsections is
applicable; or
an associated entity in relation to:
the first company; or
that provider; and
the provision of the first eligible benefit facilitated, directly or
indirectly, the provision of the second eligible benefit;
the following provisions have effect:
this section has effect as if subsection (9) or (12), as the case
requires, had never applied in relation to the first eligible benefit;
section 170 does not prevent the amendment of an assessment at any time
for the purposes of giving effect to this subsection.
"(15) In determining whether a company has profits at a particular time, it
is to be assumed that the accounts of the company had been drawn up
immediately before that time.
"(16) For the purposes of this section, where:
the first company has profits (in this subsection called the `original
profits') immediately before a distribution time for a distribution benefit in
relation to the first company; and
by virtue of subsection (1), an amount (in this subsection called the
`original assessable amount') is included in the assessable income of a
taxpayer (in this subsection called the `original taxpayer') of a year of
income (in this subsection called the `original year of income') under section
44, 458 or 459 in respect of the distribution payment in relation to the
distribution time; and
any of the following subparagraphs applies:
the original taxpayer is:
a resident at any time during the original year of income; and
a company or a natural person (other than a company or a natural person
in the capacity of a trustee);
the original taxpayer is the trustee of a corporate unit trust in
relation to the original year of income;
the original taxpayer is the trustee of a public trading trust in
relation to the original year of income;
the original taxpayer is the trustee of an eligible entity (within the
meaning of Part IX) in relation to the original year of income;
the original taxpayer is the trustee of a resident trust estate (within
the meaning of Division 6) in relation to the year of income who is liable to
be assessed and pay tax under section 99 or 99A in respect of a part of the
net income of the trust estate;
then, in determining the profits that the first company has at a later time,
no account is to be taken of so much of the original profits as is equal to
the original assessable amount.
"(17) For the purposes of this section, where:
the first company has profits (in this subsection called the `original
profits') immediately before a distribution time for a distribution benefit in
relation to the first company; and
by virtue of subsection (1), an amount (in this subsection called the
`original assessable amount') is included in the assessable income of a
taxpayer (in this subsection called the `original taxpayer') of a year of
income (in this subsection called the `original year of income') under section
44, 458 or 459 in respect of the distribution payment in relation to the
distribution time; and
all of the following conditions are satisfied:
the original taxpayer is the trustee of a trust estate who is liable to
be assessed and pay tax under section 98 in respect of a share in the net
income of the trust estate of the original year of income;
the beneficiary who was entitled to that share was a resident at any
time during the original year of income;
the whole or a part (which whole or part is in this subsection called
the `beneficiary's portion of the original assessable amount') of the share of
the net income is attributable to the original assessable amount;
then, in determining the profits that the first company has at a later time,
no account is to be taken of so much of the original profits as is equal to
the beneficiary's portion of the original assessable amount.
"(18) For the purposes of this section, where:
the first company has profits (in this subsection called the `original
profits') immediately before a distribution time for a distribution benefit in
relation to the first company; and
by virtue of subsection (1), an amount (in this subsection called the
`original assessable amount') is included in the assessable income of a
taxpayer (in this subsection called the `original taxpayer') of a year of
income (in this subsection called the `original year of income') under section
44, 458 or 459 in respect of the distribution payment in relation to the
distribution time; and
the original taxpayer is the trustee of a trust estate or a
partnership; and
the following conditions are satisfied in relation to another taxpayer
(in this subsection called the `actual taxpayer'):
an amount is included in the assessable income of the actual taxpayer
of a year of income (in this subsection called the `assessment year of
income') under subsection 92 (1) or section 97 or 100;
the actual taxpayer is:
a resident at any time during the assessment year of income, being a
company or a natural person (other than a company or a natural person in the
capacity of a trustee); or
the trustee of a corporate unit trust in relation to the assessment
year of income; or
the trustee of a public trading trust in relation to the assessment
year of income; or
the trustee of an eligible entity (within the meaning of Part IX) in
relation to the assessment year of income; or
the trustee of a trust estate who is liable to be assessed and pay tax
under section 98 in respect of a share in the net income of a trust estate;
or
the trustee of a trust estate who is liable to be assessed and pay tax
under section 99 or 99A in respect of a part of the net income of a trust
estate;
if sub-subparagraph (ii) (A), (B), (C) or (D) applies - the whole or
a part of the amount so included in the actual taxpayer's assessable income
(which whole or part is in this subsection called the `actual taxpayer's
portion of the original assessable amount') is attributable (either directly
or indirectly through one or more interposed partnerships or trusts) to the
original assessable amount;
if sub-subparagraph (ii) (E) applies:
the beneficiary who was entitled to the share concerned was a resident
at any time during the assessment year of income; and
the whole or a part (which whole or part is in this subsection also
called the `actual taxpayer's portion of the original assessable amount') of
the share of the net income is attributable (either directly or indirectly
through one or more interposed partnerships or trusts) to the original
assessable amount;
if sub-subparagraph (ii) (F) applies:
the trust estate was a resident trust estate (within the meaning of
Division 6) in relation to the assessment year of income; and
the whole or a part (which whole or part is in this subsection also
called the `actual taxpayer's portion of the original assessable amount') of
the part of the net income is attributable (either directly or indirectly
through one or more interposed partnerships or trusts) to the original
assessable amount;
then, in determining the profits that the first company has at a later time,
no account is to be taken of so much of the original profits as is equal to
the actual taxpayer's portion of the original assessable amount.
"(19) The provisions of section 102AAJ apply for the purposes of this
section in like manner as they apply for the purposes of Division 6AAA.
"(20) For the purposes of this section, the question whether a company is a
resident of an unlisted country is to be determined in the same manner in
which that question is determined for the purposes of Part X.
"(21) In this section:
`arrangement' means:
any agreement, arrangement, understanding, promise or undertaking,
whether express or implied and whether or not enforceable, or intended to be
enforceable, by legal proceedings; and
any scheme, plan, proposal, action, course of action or course of
conduct, whether there are 2 or more parties or only one party involved;
`associate' has the same meaning as in Part X;
`associated entity', in relation to a company, means either of the following
entities:
a shareholder in the company;
an entity who is an associate of a shareholder in the company;
`CFC' has the same meaning as in Part X;
`distribution benefit' has the meaning given by subsection (3) of this
section;
`eligible equity interest':
in relation to a company, means any of the following:
a share, or an interest in a share, in the company;
a right to acquire a share, or an interest in a share, in the
company;
an option to acquire a share, or an interest in a share, in the
company; or
in relation to a unit trust, means any of the following:
a unit, or an interest in a unit, in the unit trust;
a right to acquire a unit, or an interest in a unit, in the unit
trust;
an option to acquire a unit, or an interest in a unit, in the unit
trust; or `entity' has the same meaning as in Part X;
`loan' includes:
an advance of money; and
the provision of credit or any other form of financial accommodation;
and
the payment of an amount for, on account of, on behalf or at the
request of an entity where there is an obligation (whether expressed or
implied) to repay the amount; and
a transaction (whatever its terms or form) which in substance effects a
loan of money;
`property' has the same meaning as in Division 6AAA;
`services' has the same meaning as in Division 6AAA;
`statutory accounting period' has the same meaning as in Part X;
`transfer' has the same meaning as in Division 6AAA.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 10
10. Section 79D of the Principal Act is repealed and the following section
is substituted:
Limitation on deductions for foreign income
"79D. (1) Where:
apart from this section, there are one or more foreign income
deductions of a taxpayer in relation to a class of assessable foreign income
in relation to a year of income; and
either:
the taxpayer did not derive any assessable
foreign income of that class in the year of income; or
the taxpayer derived assessable foreign
income of that class in the year of income and its amount is exceeded by the
sum of the foreign income deductions; then, for the purposes of this Act,
those deductions are reduced respectively:
where subparagraph (b) (i) applies - to nil; or
where subparagraph (b) (ii) applies - by amounts proportionate to those
deductions and equal in total to the amount of the excess referred to in that
subparagraph.
"(2) In this section:
`assessable foreign income' has the same meaning as in section 160AFD;
`class of assessable foreign income' has the same meaning as in section
160AFD;
`foreign income deduction' has the same meaning as in section 160AFD.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 11
General domestic losses of post-1989 years of income
11. Section 79E of the Principal Act is amended:
by inserting in subsections (5) and (6) "assessable" before "foreign"
(wherever occurring);
by omitting from subsection (12) the definitions of "class of income"
and "foreign source";
by inserting in subsection (12) the following definitions:
" `assessable foreign income' has the same meaning as in section 160AFD;
`class of assessable foreign income' has the same meaning as in section
160AFD;
`exempt income' does not include income to which section 23AH, 23AI or 23AJ or
paragraph 99B (2) (d) or (e) applies;
`foreign income deduction' has the same meaning as in section 160AFD;";
by omitting subsection (14) and substituting the following subsection:
"(14) For the purposes of the definition of
`non-loss deduction' in subsection (12), where:
there are one or more foreign income deductions of a taxpayer in
relation to a class of assessable foreign income in relation to a year of
income; and
either:
the taxpayer did not derive any assessable foreign income of that class
in the year of income; or
the taxpayer derived assessable foreign income of that class in the
year of income and its amount is exceeded by the sum of the foreign income
deductions;
then:
where subparagraph (b) (i) of this subsection applies - the foreign
income deductions are to be disregarded; and
where subparagraph (b) (ii) of this subsection applies - the foreign
income deductions are to be disregarded to the extent of the excess referred
to in that subparagraph.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 12
General domestic losses of pre-1990 years of income
12. Section 80 of the Principal Act is amended:
by inserting in subsections (2B) and (2C) "assessable" before "foreign"
(wherever occurring);
by omitting subsection (3) and substituting the following subsection:
"(3) In this section:
`assessable foreign income' has the same meaning as in section 160AFD; `exempt
income' does not include income to which section 23AH, 23AI or 23AJ or
paragraph 99B (2) (d) or (e) applies;
`net exempt income' means:
where the taxpayer is a resident - the amount by which the taxpayer's
exempt income derived from all sources exceeds the sum of the expenses (not
being expenses of a capital nature) incurred in deriving that income, and any
taxes payable in respect of that income in any country or place outside
Australia; and
where the taxpayer is a non-resident - the amount by which the
taxpayer's exempt income derived from sources in Australia (other than income,
if any, to which section 128D applies) exceeds the sum of the expenses (not
being expenses of a capital nature) incurred in deriving that income.";
by adding at the end of subsection (9) ", as in force immediately
before the commencement of the Taxation Laws Amendment (Foreign Income) Act
1990.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 13
Film losses of pre-1990 years of income
13. Section 80AAA of the Principal Act is amended by omitting subsection (2)
and substituting the following subsection:
"(2) In this section, `exempt income' and `net exempt income' have the same
respective meanings as in section 80.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 14
Primary production losses of pre-1990 years of income
14. Section 80AA of the Principal Act is amended by omitting subsection (5)
and substituting the following subsection:
"(5) In this section, `exempt income' and `net exempt income' have the same
respective meanings as in section 80.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 15
Transfer of loss within company group
15. Section 80G of the Principal Act is amended by omitting subsection (19)
and substituting the following subsection:
"(19) In this section, `exempt income' and `net exempt income' have the same
respective meanings as in section 80.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 16
Receipt of trust income not previously subject to tax
16. Section 99B of the Principal Act is amended:
by omitting "or" from the end of paragraph (2) (b);
by adding at the end of subsection (2) the following paragraphs:
an amount that is or has been included in
the assessable income of any taxpayer (other than a company) under section
102AAZD; or
if the beneficiary is a company - an amount
that is or has been included in the assessable income of the beneficiary under
section 102AAZD.";
by adding at the end the following subsection:
"(3) In paragraphs (2) (d) and (e):
`company' means a company other than a company in
the capacity of a trustee.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 17
Revocable trusts
17. Section 102 of the Principal Act is amended by omitting from subsection
(2B) all the words after "to that net income" and substituting the following
words and paragraphs:
"reduced by:
so much (if any) of that net income as is attributable to a period when
the person who created the trust was not a resident and is also attributable
to sources out of Australia; and
so much (if any) of that net income as is not covered by paragraph (a)
and represents an amount included in the assessable income of any taxpayer
under section 102AAZD.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 18
18. After section 102 of the Principal Act the following Division is
inserted:
"Division 6AAA - Special Provisions relating to Non-resident
Trust Estates etc.
"Subdivision A - Preliminary
Object of Division
"102AAA. The object of this Division is to set out rules relating to the
following:
the payment of interest on distributions from certain non-resident
trust estates (Subdivision B);
the winding-up of certain non-resident trust estates in existence on 12
April 1989 (Subdivision C);
an accruals system of taxation of certain non-resident trust estates
(Subdivision D).
Interpretation
"102AAB. In this Division, unless the contrary intention appears:
`1 July 1990 net worth', in relation to a trust estate, means the market
value, as at the beginning of 1 July 1990, of the assets of the trust estate,
reduced by the liabilities of the trust estate as at the beginning of that
day;
`accounts' has the same meaning as in Part X;
`actual transfer', in relation to property or services, means a transfer of
the property or services other than a transfer that is taken to have been made
because of subsection 102AAK (1), (2), (5), (6), (8), (10) or (11);
`approved form' means the form approved in writing by the Commissioner for the
purposes of the provision in which the expression appears;
`arm's length amount', in relation to an actual transfer of property or
services to a trust estate, means the amount that the trustee could reasonably
be expected to have been required to pay to obtain the property or the
services concerned from the transferor under a transaction where the parties
to the transaction are dealing with each other at arm's length in relation to
the transaction;
`associate' has the same meaning as in Part X;
`attributable income', in relation to a trust estate, has the meaning given by
section 102AAU;
`attributable taxpayer' has the meaning given by section 102AAT;
`attribution account payment' has the same meaning as in Part X;
`attribution debit' has the same meaning as in Part X;
`Australian entity' has the same meaning as in Part X;
`Australian trust' has the same meaning as in Part X;
`basic statutory interest rate', in relation to a year of income, means the
interest rate, or each of the interest rates, applicable for the purposes of
section 10 of the Taxation (Interest on Overpayments) Act 1983 for the year of
income or for periods included in the year of income, as the case may be;
`CFC' has the same meaning as in Part X;
`controlled foreign trust' has the same meaning as in Part X;
`corporate unit trust', in relation to a year of income, means a unit trust
that is a corporate unit trust in relation to the year of income for the
purposes of Division 6B;
`de facto marriage' means a relationship between 2 persons who, although not
legally married to each other, live with each other on a bona fide domestic
basis as husband and wife;
`depreciation provision' has the same meaning as in Part X;
`designated concession income' has the same meaning as in Part X;
`discretionary trust estate' means a trust estate where:
both of the following conditions are satisfied:
a person (who may include the trustee) is empowered (either
unconditionally or on the fulfilment of a condition) to exercise any power of
appointment or other discretion;
(ii) the exercise of the power or discretion, or the failure to exercise the
power or discretion, has the effect of determining, to any extent, either or
both of the following:
the identities of those who may benefit under the trust;
how beneficiaries are to benefit, as between themselves, under the
trust; or
one or more of the beneficiaries under the trust have a contingent or
defeasible interest in some or all of the corpus or income of the trust
estate; or
the trustee of another trust estate, being a trust estate where both of
the conditions in paragraph (a) are satisfied, benefits, or is capable
(whether by the exercise of a power of appointment or otherwise) of
benefiting, under the first-mentioned trust estate;
`eligible designated concession income' has the same meaning as in `entity'
means any of the following:
a company;
a partnership;
a person in the capacity of trustee;
any other person;
`exempt income', in relation to a trust estate, means the exempt income of the
trust estate calculated as if the trustee were a taxpayer who was a resident;
`IP time' means 7.30 p.m., by standard time in the Australian Capital
Territory, on 12 April 1989;
`listed country' has the same meaning as in Part X;
`listed country trust estate' has the meaning given by section 102AAE;
`net income', in relation to a trust estate, in relation to a year of income,
means:
if the trust estate is a corporate unit trust in relation to the year
of income - the net income (within the meaning of Division 6B) of the
corporate unit trust of the year of income; or
if the trust estate is a public trading trust in relation to the year
of income - the net income (within the meaning of Division 6C) of the public
trading trust of the year of income; or
in any other case - the net income (within the meaning of Division 6)
of the trust estate;
`non-attributable year of income', in relation to a trust estate, means a
non-resident year of income of the trust estate where no amount calculated by
reference to the attributable income of the trust estate of that year of
income is included in the assessable income of any taxpayer under subsection
102AAZD (1);
`non-discretionary trust estate' means a trust estate other than a
discretionary trust estate;
`non-resident family trust' has the meaning given by section 102AAH;
`non-resident trust estate' (except in section 102AAA), in relation to a year
of income, means a trust estate that is not a resident trust estate in
relation to the year of income;
`non-resident year of income', in relation to a trust estate, means a year of
income in relation to which the trust estate is a non-resident trust estate;
`pre-franking rebate tax', in relation to a taxpayer, in relation to a year of
income, means the tax that would be payable by the taxpayer in respect of
income of the year of income if the taxpayer were not entitled to a rebate
under Part IIIAA;
`profits' includes gains, whether of an income or capital nature;
`property' includes money;
`public trading trust', in relation to a year of income, means a unit trust
that is a public trading trust in relation to the year of income for the
purposes of Division 6C;
`public unit trust' has the meaning given by section 102AAF;
`resident trust estate', in relation to a year of income, means:
a resident trust estate in relation to the year of income within the
meaning of Division 6; or
a unit trust that is a corporate unit trust, or a public trading trust,
in relation to the year of income; or
an eligible entity (within the meaning of Part IX) in relation to the
year of income;
`scheme' means:
any agreement, arrangement, understanding, promise or undertaking,
whether express or implied and whether or not enforceable, or intended to be
enforceable, by legal proceedings; and
any scheme, plan, proposal, action, course of action or course of
conduct, whether there are 2 or more parties or only one party involved;
`services' includes any benefit, right (including a right in relation to, and
an interest in, real or personal property), privilege or facility and, without
limiting the generality of the foregoing, includes a benefit, right,
privilege, service or facility that is, or is to be, provided under:
an arrangement for or in relation to:
the performance of work (including work of a professional nature),
whether with or without the provision of property; or
(ii) the provision of, or of the use of facilities for, entertainment,
recreation or instruction; or
(iii) the conferring of benefits, rights or privileges for which
remuneration is payable in the form of a royalty, tribute, levy or similar
exaction; or
a contract of insurance; or
an arrangement for or in relation to the lending of money;
`spouse', in relation to a person, includes another person who, although not
legally married to the person, lives with the person on a bona fide domestic
basis as the husband or wife of the person;
`subject to tax' has the same meaning as in Part X;
`tax accounting period' has the same meaning as in Part X;
`tax law', in relation to a listed country or an unlisted country, has the
same meaning as in Part X;
`transfer':
in relation to property - includes dispose of (whether by assignment,
declaration of trust or otherwise) or provide; and
in relation to services - includes allow, confer, give, grant, perform
or provide;
`trust estate', in relation to a transfer of property or services, means the
trust estate or, as the case requires, the trustee of the trust estate;
`underlying transfer', in relation to a transfer of property or services to a
trust estate, means:
if that transfer was an actual transfer - the actual transfer; or
if that transfer was taken to have been made because of subsection
102AAK (1) - the actual transfer referred to in that subsection; or
if that transfer was taken to have been made because of subsection
102AAK (2) - the actual transfer referred to in paragraph 102AAK (2) (d); or
if that transfer was taken to have been made because of subsection
102AAK (5) - the actual transfer referred to in paragraph 102AAK (5) (b); or
if that transfer was taken to have been made because of the application
of subsection 102AAK (6) or (8) to an actual transfer - the actual transfer;
or
if that transfer was taken to have been made because of the application
of subsection 102AAK (6) or (8) to a transfer that was taken to have been made
because of subsection 102AAK (1) - the actual transfer referred to in
subsection 102AAK (1); or
if that transfer was taken to have been made because of the application
of subsection 102AAK (6) or (8) to a transfer that was taken to have been made
because of subsection 102AAK (5) - the actual transfer referred to in
paragraph 102AAK (5) (b); or
if that transfer was taken to have been made because of subsection
102AAK (10) - the actual transfer referred to in paragraph 102AAK (10) (b);
or
if that transfer was taken to have been made because of one or more
applications of subsection 102AAK (11) to an actual transfer - the actual
transfer; or
if that transfer was taken to have been made because of one or more
applications of subsection 102AAK (11) to a transfer (in this paragraph called
the `deemed transfer') that was taken to have been made because of subsection
102AAK (1), (2), (5), (6), (8) or (10) - the actual transfer that, under a
preceding paragraph of this definition, is the underlying transfer in relation
to the deemed transfer;
`underlying transferor', in relation to a transfer of property or services to
a trust estate, means the entity who made the underlying transfer concerned;
`weighted statutory interest rate', in relation to a year of income, means:
the person did not know, and made all reasonable efforts to obtain, the
information.
Treatment of partnerships
"468. (1) Subject to subsections (2) and (3), the following provisions apply
to a partnership as if the partnership were a person:
sections 462 to 467 (inclusive);
subsections 262A (4) and (5), in so far as those subsections apply to
records kept under or for the purposes of this Division;
Part III of the Taxation Administration Act 1953, in so far as that
Part of that Act relates to the provisions covered by paragraph (a) or (b) of
this subsection.
"(2) Where, by virtue of subsection (1), an offence is taken to have been
committed by a partnership, that offence is taken to have been committed by
each of the partners.
"(3) In a prosecution of a person for an offence by virtue of subsection
(2), it is a defence if the person proves that the person:
did not aid, abet, counsel or procure the act or omission by virtue of
which the offence was taken to have been committed; and
was not in any way, by act or omission, directly or indirectly,
knowingly concerned in, or party to, an act or omission by virtue of which the
offence is taken to have been committed.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 50
Interpretation
50. (1) In this Division:
"amended Act" means the Principal Act as amended by this Act;
"Principal Act" has the same meaning as in Division 1;
"1990-91 income year" means the year of income commencing on 1 July 1990.
(2) Expressions used in this Division that are also used in Part X of the
amended Act have the same respective meanings as in that Part.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 51
Application of amendments
51. (1) The amendments made by sections 7, 11 to 15 (inclusive) and 28 to 35
(inclusive) apply to assessments in respect of income of the 1990-91 income
year and of all subsequent years of income.
applies to assessments in respect of
income of the 1990-91 income year and of all subsequent years of income, and
that amendment is to be disregarded for the purpose of interpreting section
79D of the Principal Act in relation to any other assessment.
(3) The amendment made by paragraph 37 (a) applies to a company that becomes
a resident, within the meaning of section 6 of the amended Act, on or after 1
July 1989.
(4) The amendment made by paragraph 37 (b) applies to a trust estate that
becomes a resident trust estate on or after 29 June 1990.
(5) The amendment made by paragraph 37 (c) applies to a unit trust that
29 June 1990.
(6) The definition of "exempting receipt" (in relation to a company that is
a resident of an unlisted country) in section 377 of the amended Act applies
to amounts derived by, or dividends paid to, the company during accounting
periods of the company that end after 30 June 1990.
(7) The amendments made by sections 20 to 26 (inclusive) apply to
assessments in respect of income of the 1990-91 income year and of all
subsequent years of income.
(8) The definition of "exempting receipt" (in relation to a company that is
a resident within the meaning of section 6 of the amended Act) in section 380
of the amended Act applies to dividends paid to the company during its 1990-91
income year or any subsequent year of income.
(9) Subdivision D of Division 7 of Part X of the amended Act does not apply
to a statutory accounting period before that commencing on 1 July 1983.
(10) Subject to this Division, section 456 of the amended Act applies where
the statutory accounting period of the CFC referred to in that section begins
on or after 1 July 1990.
(11) Subject to this Division, section 457 of the amended Act applies where
the residence-change time referred to in that section occurs during a
statutory accounting period of the CFC that begins on or after 1 July 1990.
(12) Subject to this Division, sections 458 and 459 of the amended Act apply
to dividends paid during the 1990-91 income year, or any subsequent year of
income, of the taxpayer.
(13) Subject to this Division, section 462 of the amended Act applies where
the statutory accounting period of the CFC referred to in that section begins
on or after 1 July 1990.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 52
Transitional - section 108 of the amended Act
52. (1) In addition to the effect that it has apart from this section,
section 108 of the amended Act also has, and is taken to have had, the effect
that it would have if:
the following subsections were inserted before section (1):
"(1A) Subject to subsection (1B), if:
a company:
pays an amount to an associated person by way of an advance or loan;
or
pays or credits an amount on behalf of, or for the individual benefit
of, an associated person; and
the payment or credit was made:
after 30 June 1989 and before 4 June 1990; and
during a statutory accounting period of the company; and
the company is a CFC at any time during the statutory accounting
period; and
the company is a resident of an unlisted country at any time during the
statutory accounting period;
so much (if any) of the amount paid or credited as,
in the opinion of the Commissioner, represents a distribution of profits is
taken, for the purposes of this Act, to be a dividend paid by the company:
to the associated person as a shareholder in the company; and
out of profits derived by the company; and
on the last day of the statutory accounting period.
"(1B) If:
either of the following subparagraphs applies:
by virtue of subsection (1A), the whole or a part of the amount paid or
credited is included in the assessable income of a taxpayer of a year of
income under section 44;
by virtue of subsection (1A), an amount is included in the assessable
income of a taxpayer of a year of income under section 458 in respect of the
amount paid or credited; and
the taxpayer's return of income for the year of income was not prepared
on the basis that the amount paid or credited had the consequence specified in
subsection (1A);
that subsection has effect in relation to the
taxpayer and in relation to the amount paid or credited as if the reference in
that subsection to the purposes of this Act were a reference to the purposes
of this Act (other than Division 18, section 365 and Division 6 of Part X).";
and
subsection (1) did not apply to a payment or credit to which subsection
(1A) applies; and
the reference in paragraph (2) (a) to subsection (1) included a
reference to subsection (1A); and
the following subsections were added at the end:
"(5) For the purposes of this section, the
question whether a company is a resident of an unlisted country is to be
determined in the same manner in which that question is determined for the
purposes of Part X.
"(6) In this section:
`CFC' has the same meaning as in Part X;
`statutory accounting period' has the same meaning
as in Part X.".
(2) Where:
because of subsection (1), a company is taken by section 108 of the
amended Act to have paid a dividend; and
section 458 of the amended Act does not apply to include an amount in
the assessable income of a taxpayer of a year of income in respect of the
dividend only because it is not a non-portfolio dividend;
then:
an amount equal to the amount that would have been included if the
dividend had been a non-portfolio dividend is included in the taxpayer's
assessable income of the year of income; and
for the purposes of the amended Act, the amount is taken to be included
in the taxpayer's assessable income under section 459 of that Act.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 53
Transitional - section 160AFD of the amended Act
53. (1) Section 160AFD of the amended Act applies as if the only overall
foreign loss in respect of each class of assessable foreign income in any of
the 7 years of income before the 1990-91 income year were a loss of an amount
calculated in accordance with this section.
(2) The amount of the overall foreign loss for each class for the year of
income is calculated by:
working out, by making the following assumptions:
that section 160AFD of the Principal Act had not been repealed and
replaced by this Act;
that, subject to subsection (3) of this section, references in that
section to income of a class of a year of income derived from a foreign source
did not include references to income that would have been exempt from tax if
sections 23AH and 23AJ of the amended Act, and any other provision of the
amended Act relevant to the operation of those sections, had been included in
the Principal Act at all previous times;
what would have been, for the year of income, the overall foreign loss (if
any) in respect of each class of income derived from a foreign source that
would have been available to reduce foreign income of that class of the
1990-91 income year derived from that source; and
treating:
each overall foreign loss in respect of interest income or offshore
banking income derived from a foreign source as an overall foreign loss in
respect of assessable foreign income that is respectively interest income, or
offshore banking income, within the meaning of section 160AFD of the amended
Act; and
each overall foreign loss in respect of other income derived from a
foreign source that consists of a business (other than one carried on at or
through one or more permanent establishments), commercial or investment
activity as an overall foreign loss in respect of assessable foreign income
that is modified passive income within the meaning of section 160AFD of the
amended Act; and
each overall foreign loss in respect of other income derived from any
other foreign source as an overall foreign loss in respect of assessable
foreign income that is not interest income, offshore banking income or modified
passive income, within the meaning of section 160AFD of the amended Act; and
adding together all of the amounts worked out under paragraph (b) for
each class of assessable foreign income for the year of income.
(3) Where the overall foreign loss in respect of a class of income for the
year of income worked out under paragraph (2) (a) would be less if the
assumption in subparagraph (2) (a) (ii) were not made, then the assumption is
not to be made in working out that loss.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 54
Transitional - section 319 of the amended Act
54. Where, before the end of 30 June 1991, a company makes an election under
section 319 of the amended Act:
subsection 319 (4) and paragraph 319 (5) (b) of the amended Act do not
apply to the company in relation to the election; and
the first statutory accounting period of the company using the new day
specified in the election is the first period of 12 months finishing at the
end of the new day, where the new day occurs after 30 June 1991; and
subject to any further application of section 319, later statutory
accounting periods are the successive periods of 12 months finishing at the
end of the new day; and
sections 456 and 462 of the amended Act apply only to the statutory
accounting periods of the company referred to in paragraphs (b) and (c) of
this section; and
section 457 of the amended Act applies only where the residence-change
time referred to in that section occurs during a statutory accounting period
of the company referred to in paragraph (b) or (c) of this section; and
for the purposes of any provision of Part X of the amended Act that
requires reference to a statutory accounting period of the company before the
first one using the new day:
the part of the year beginning on 1 July 1990 and ending immediately
before the first statutory accounting period using the new day is taken to be
a statutory accounting period; and
earlier periods of 12 months are statutory accounting periods.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 55
Transitional - section 458 of the amended Act
55. (1) In addition to its application apart from this section, section 458
of the amended Act also has the effect in relation to a taxpayer that it would
have if:
subsection 458 (1) of the amended Act only applied to dividends paid to
a CFC on or after 1 July 1989 and before the commencement of the 1990-91
income year of the taxpayer; and
it were an additional requirement of subsection 458 (1) of the amended
Act that the CFC to which the dividend referred to in that subsection is paid
must be a resident of a listed country when the dividend is paid; and
where the ultimate recipient referred to in subsection 458 (4) or (5)
of the amended Act is a CFC:
that subsection only applied to dividends paid on or after 1 July 1989
and before the commencement of the 1990-91 income year of the taxpayer; and
it were an additional requirement of that subsection that the CFC must
be a resident of a listed country when the dividend referred to in that
subsection is paid; and
where subsection 458 (3) of the amended Act applies or the ultimate
recipient referred to in subsection 458 (4) or (5) is a CFT - that subsection
only applied to dividends paid on or after 1 July 1989 and before the
commencement of the 1990-91 year of income of the taxpayer; and
paragraph 458 (2) (b) and subsection 458 (7) of the amended Act were
omitted; and
any amount that would, in respect of the payment of a dividend, be
included in the assessable income of the taxpayer under section 458 of the
amended Act, as it applies in accordance with the assumptions made in
paragraphs (a) to (e) of this section, were required to be included in the
assessable income of the 1990-91 income year of the taxpayer instead of in the
year of income when the dividend is paid.
(2) Where, because of subsection (1), an amount is included in the
taxpayer's assessable income under section 458 of the amended Act, then the
attribution credit under section 371 of that Act in respect of the amount
arises at the commencement of the 1990-91 income year of the taxpayer, rather
than at the time referred to in paragraph 371 (5) (c) of that Act.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 56
Transitional - section 459 of the amended Act
56. In addition to its application apart from this section, section 459 of
the amended Act also has the effect in relation to a taxpayer that it would
have if:
subsection 459 (1) of the amended Act only applied to dividends paid
before the commencement of the 1990-91 income year of the taxpayer; and
where the ultimate recipient referred to in subsection 459 (2) or (3)
of the amended Act is a CFC - that subsection only applied to dividends paid
before the commencement of the 1990-91 income year of the taxpayer; and
any amount that would, in respect of the payment of a dividend, be
included in the assessable income of the taxpayer under section 459 of the
amended Act, as it applies in accordance with the assumptions made in
paragraphs (a) and (b) of this subsection, were required to be included in the
assessable income of the 1990-91 income year of the taxpayer instead of in the
year of income when the dividend is paid.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 57
Transitional - CFT distributions
57. (1) In this section:
"eligible trust distribution" means any property of a trust, where the
following conditions are satisfied:
the property is paid to or applied for the benefit of a beneficiary of
the trust;
the property represents income or profits of the trust, of any
accounting period, that have not been subject to tax in a listed country.
(2) If a particular part of an item of income or profit derived by a trust
would, under subsection 102AAE (2) of the amended Act, be treated as if it
were subject to tax in a listed country in a tax accounting period, then it is
treated for the purposes of subsection (1) of this section as if it were so
subject to tax.
(3) Where:
a CFT makes an eligible trust distribution to a CFC that is a resident
of a listed country; and
when the distribution is made, a taxpayer is an attributable taxpayer
in relation to the CFT and the CFC; and
the distribution is made on or after 29 June 1990 and before the
beginning of the first statutory accounting period in respect of which section
456 of the amended Act would, in accordance with subsection 51 (10) of this
Act, apply in relation to the CFC and the attributable taxpayer if the
requirements of that section were satisfied; then:
the assessable income of the attributable taxpayer of the 1990-91
income year includes an amount equal to the attributable taxpayer's
attribution percentage, for the CFC at the time when the distribution is made,
of the amount of the distribution; and
subsection (7) applies in relation to the distribution.
(4) Where:
a CFT makes an eligible trust distribution to a partnership; and
when the distribution is made, a CFC that is a resident of a listed
country has either or both of the following:
a direct interest in the profits of the partnership by virtue of being
a partner in the partnership;
an indirect interest in the profits of the partnership by virtue of
the holding or successive holding of interests in profits of interposed
Australian partnerships or present entitlements to shares of the income of
interposed Australian trusts (or any combination thereof); and
when the distribution is made, a taxpayer is an attributable taxpayer
in relation to the CFT and the CFC; and
the distribution is made on or after 29 June 1990 and before the
beginning of the first statutory accounting period in respect of which section
456 of the amended Act would, in accordance with subsection 51 (10) of this
Act, apply in relation to the CFC and the attributable taxpayer if the
requirements of that section were satisfied;
then:
the assessable income of the attributable taxpayer of the1990-91 income
year includes an amount calculated using the formula:
x Interest in partnership x Distribution
where:
Attribution percentage means the attributable taxpayer's attribution
percentage for the CFC;
Interest in partnership means the percentage of the total interests in the
profits of the partnership represented by the sum of the direct and indirect
interests of the CFC;
Distribution means the amount of the distribution; and
subsection (7) applies in relation to the distribution.
(5) Where:
a CFT makes an eligible trust distribution to an Australian trust; and
when the distribution is made, a CFC that is a resident of a listed
country has either or both of the following:
a direct interest in the income of the Australian trust by virtue of
being presently entitled to a share of that income;
an indirect interest in the income of the Australian trust by virtue
of the holding or successive holding of interests in profits of interposed
Australian partnerships or present entitlements to shares of the income of
interposed Australian trusts (or any combination thereof); and
when the distribution is made, a taxpayer is an attributable taxpayer
in relation to the CFT and the CFC; and
the distribution is made on or after 29 June 1990 and before the
beginning of the first statutory accounting period in respect of which section
456 of the amended Act would, in accordance with subsection 51 (10) of this
Act, apply in relation to the CFC and the attributable taxpayer if the
requirements of that section were satisfied;
then:
the assessable income of the attributable taxpayer of the 1990-91
income year includes an amount calculated using the formula:
x Interest in trust x Distribution
where:
Attribution percentage means the taxpayer's attribution percentage for the
CFC;
Interest in trust means the percentage of the income of the Australian trust
represented by the sum of the direct and indirect interests of the CFC;
Distribution means the amount of the distribution; and
subsection (7) applies in relation to the distribution.
(6) Subsection (3), (4) or (5) does not apply where:
in a subsection (3) case - the eligible trust distribution; or
in a subsection (4) or (5) case - any amount that would, as a result of
the making of the eligible trust distribution, be included in the tax base of
the CFC, or of any partnership or trust referred to in paragraph (4) (b) or
(5) (b), in respect of the holding of any interest or present entitlement
referred to in that paragraph;
is taxed in a listed country at the country's normal company tax rate.
(7) Where an amount is included in the attributable taxpayer's assessable
income of the 1990-91 income year under subsection (3), (4) or (5) in respect
of the eligible trust distribution, the following provisions have effect:
for the purposes of the amended Act, but subject to the remainder of
this subsection, the amount is taken to be included in the attributable
taxpayer's assessable income under subsection 458 (1), (4) or (5), where
subsection (3), (4) or (5) respectively of this section applies, as if it were
in respect of a dividend paid by a CFC at the same time as the eligible trust
distribution;
section 160AFCC of the amended Act applies in relation to the amount as
if that section read as follows:
"160AFCC. If:
an amount (in this section called the `notional section 458 amount') is
taken to be included in the assessable income of a taxpayer, being a company,
of the year of income commencing on 1 July 1990 under subsection 458 (1), as a
result of the application of subsection 57 (7) of the Taxation Laws Amendment
(Foreign Income) Act 1990 in relation to an eligible trust distribution
(within the meaning of the latter subsection) made to a CFC; and
when the eligible trust distribution was made, the CFC was related to
the taxpayer;
then the taxpayer is taken, for the purposes of this Division, to have paid,
and to have been personally liable for, in respect of the notional section 458
amount, an amount of foreign tax calculated using the formula:
x Foreign tax
Distribution
where:
Notional section 458 amount means the notional section 458 amount;
Foreign tax means the amount of foreign tax (other than under a tax law of the
listed country of which the CFC is a resident) paid by the CFC in respect of
the eligible trust distribution;
Distribution means the amount of the eligible trust distribution.";
for the purposes of the amended Act, the attribution credit under
section 371 of that Act in respect of the amount arises:
where the eligible trust distribution is made after the commencement of
the 1990-91 income year of the attributable taxpayer - when the distribution
is made; or
in any other case - at the commencement of the 1990-91 income year of
the attributable taxpayer;
instead of at the time referred to in subsection 371 (5) of that Act;
the provisions of section 375 of the amended Act are to be disregarded,
but:
an attributed tax account credit is taken to arise under that section,
at the time referred to in subparagraph (c) (i) or (ii) of this subsection,
for the CFC in respect of any amount of foreign tax that the attributable
taxpayer is taken, by section 160AFCC of the amended Act (as it applies in
accordance with paragraph (b) of this subsection), to have paid, and to have
been personally liable for, in respect of the eligible trust distribution;
and
the amount of the attributed tax account credit is equal to the amount
of the foreign tax.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 58
Transitional - change of CFC residence from unlisted to listed country
58. (1) Where:
(a) at a time (in this section called the "residence-change time") on or
after 1 July 1989, a company that:
is a CFC; and
has an attributable taxpayer;
ceases to be a resident of an unlisted country and becomes a resident of a
listed country; and
the residence-change time is before the beginning of the first
statutory accounting period in respect of which section 456 of the amended Act
would, in accordance with subsection 51 (10) of this Act, apply in relation to
the company and the attributable taxpayer if the requirements of that section
were satisfied;
the following provisions have effect:
an amount (in this subsection called the "adjusted profits amount")
equal to the attributable taxpayer's attribution percentage, at the
residence-change time, of the CFC's adjusted distributable profits, within the
meaning of subsection (2), is included in the attributable taxpayer's
assessable income of the 1990-91 income year;
for the purposes of the amended Act, but subject to the remainder of
this subsection, the adjusted profits amount is taken to be included in the
attributable taxpayer's assessable income under section 457 as if the change
in residence were one to which that section applied;
section 160AFCB of the amended Act applies in relation to the adjusted
profits amount as if it read as follows:
"160AFCB. (1) If:
an amount (in this subsection called the `adjusted profits amount') is
taken to be included in the assessable income of the taxpayer, being a
company, of the year of income commencing on 1 July 1990 under section 457, as
a result of the application of subsection 58 (1) of the Taxation Laws
Amendment (Foreign Income) Act 1990 in relation to a company that is a CFC at
the residence-change time referred to in that subsection; and
at the residence-change time, the CFC was related to the taxpayer;
the following provisions have effect:
the taxpayer is taken, for the purposes of this Division, to have paid
and to have been personally liable for, in respect of the adjusted profits
amount, in the year of income, an amount of foreign tax equal to the
taxpayer's attribution percentage, at the residence-change time, of the total
foreign tax and Australian tax paid by the CFC that is attributable to the
adjusted distributable profits referred to in subsection 58 (1) of that Act;
if those adjusted distributable profits include a non-portfolio
dividend paid to the CFC by a foreign company that, at the time of the payment
of the dividend, was related to the taxpayer - the taxpayer is taken, for the
purposes of this Division, to have paid, and to have been personally liable
for, in respect of the adjusted profits amount, in the year of income, an
amount of foreign tax equal to the taxpayer's attribution percentage at the
residence-change time, of the amount (if any) of foreign tax that the CFC
would have been taken to have paid, and to have been personally liable for,
because of section 160afc in respect of the dividend if:
the CFC had been an Australian company at the time of the payment of
the dividend; and
it were a requirement of that section (in addition to the other
requirement of that section), for companies to be a pair of companies in a
dividend series, that they be related to the taxpayer referred to in this
section.";
for the purposes of the amended Act, the attribution credit under
section 371 of that Act in respect of the amount arises:
where the residence-change time is after the commencement of the
1990-91 income year of the attributable taxpayer - at the residence-change
time; or
in any other case - at the commencement of the 1990-91 income year of
the attributable taxpayer;
instead of at the time referred to in subsection 371
(5) of that Act;
for the purposes of the amended Act, an attributed tax account credit
is taken to arise under section 375 of that Act, at the time referred to in
subparagraph (f) (i) or (ii) of this subsection, for the CFC in relation to
the adjusted profits amount if:
on the assumption that the reference to Australian tax were omitted
from paragraph (c) of section 160AFCB of the amended Act (being that section
as it applies in relation to the adjusted profits amount in accordance with
paragraph (e) of this subsection), the attributable taxpayer would be taken by
that paragraph to have paid, and to have been personally liable for, an amount
of foreign tax; or
the attributable taxpayer is taken by paragraph (d) of that section
(as it applies in relation to the adjusted profits amount in accordance with
paragraph (e) of this subsection) to have paid, and to have been personally
liable for, an amount of foreign tax; and the amount of the credit is equal to
the amount of the foreign tax.
(2) For the purposes of paragraph (1) (c), the CFC's adjusted distributable
profits are:
where the application of subsection (1) is the first or only
application of the subsection in relation to the CFC and the attributable
taxpayer - the amount that would be the CFC's distributable profits at the
residence-change time if:
all the CFC's assets were disposed of at that time for a consideration
equal to their market value; and
exempting profits of the CFC in relation to the attributable taxpayer
were not taken into account; or
in any other case - so much of the amount that would be the CFC's
distributable profits at the residence-change time on the assumptions in
paragraph (a) of this subsection as is attributable to the period since the
residence-change time referred to in the previous application of subsection
(1) in relation to the CFC and the attributable taxpayer.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 59
Transitional - change of CFC residence from unlisted country to Australia
59. Where, if:
a company that is a Part X Australian resident at a particular time
were instead a resident of a listed country at that time; and
subsection 58 (2) read as follows:
"(2) For the purposes of paragraph (1) (c), the
CFC's adjusted distributable profits are:
where the application of subsection (1) is the first or only
application of the subsection in relation to the CFC and the attributable
taxpayer - the amount that would be the CFC's distributable profits at the
residence-change time if the CFC's exempting profits in relation to the
attributable taxpayer were not taken into account; or
in any other case - so much of the amount that would be the CFC's
distributable profits at the residence-change time on the assumption in
paragraph (a) as is attributable to the period since the residence-change time
referred to in the previous application of subsection (1) in relation to the
CFC and the attributable taxpayer."; there would be an adjusted profits amount
in relation to the company included in a taxpayer's assessable income of a
year of income as a result of the application of paragraph 58 (1) (c), then:
that amount is included in the taxpayer's assessable income of the year
of income; and
paragraphs 58 (1) (d) to (g), and the amended Act as applied in
accordance with those paragraphs, have effect in relation to the amount as
if:
paragraph 58 (1) (c) applied to the amount; and
at any time when the company is a Part X Australian resident, it were
instead a resident of a listed country.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 60
Transitional - regulations
60. The first regulations made for the purposes of a provision of the
Principal Act inserted by this Act may be expressed:
to have been in effect at all relevant times before the date of
notification of the regulations; or
to apply in relation to a period any part of which occurred before the
date of notification of the regulations; or
to take effect from:
a specified date; or
(ii) a specified time on a specified date;
before the date of notification of the regulations.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 62
Principal Act
62. In this Part, "Principal Act" means the Income Tax (International
Agreements) Act 1953*2*.
*2* No. 82, 1953, as amended. For previous amendments, see No. 25, 1958; No.
88, 1959; Nos. 19 and 29, 1960; No. 71, 1963; No. 112, 1964; No. 105, 1965;
No. 17, 1966; Nos. 39 and 86, 1967; No. 3, 1968; No. 24, 1969; No. 48, 1972;
Nos. 11 and 216, 1973; No. 129, 1974; No. 119, 1975; Nos. 52, 55 and 143,
1976; No. 134, 1977; No. 87, 1978; Nos. 23 and 127, 1980; Nos. 28, 110, 143
and 154, 1981; Nos. 51 and 57, 1983; Nos. 123 and 125, 1984; Nos. 168 and 173,
1985; Nos. 49, 51 and 112, 1986; and No. 165, 1989.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 63
Interpretation
63. Section 3 of the Principal Act is amended by omitting subsection (5) and
substituting the following subsections:
"(5) For the purposes of this Act:
all income that is passive income constitutes a single class of income;
and
all income that is offshore banking income constitutes a single class
of income; and
all income not being passive income or offshore banking income
constitutes a single class of income; and
an amount of income that is deemed, for the purposes of any provision
of this Act or of the Assessment Act, to be attributable to any other income,
being income of a particular class, is to be taken to be income of that
class.
"(6) An expression used in subsection (5) and in Division 18 of Part III of
the Assessment Act has the same meaning in that subsection as it has in that
Division.".
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 64
Application of amendments
64. The amendments made by this Part apply to assessments in respect of
income of the year of income commencing on 1 July 1990 and of all subsequent
years of income.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 65
Principal Act
65. In this Part, "Principal Act" means the Taxation Administration Act
1953*3*.
*3* No. 1, 1953, as amended. For previous amendments, see Nos. 28, 39, 40 and
52, 1953; No. 18, 1955; No. 39, 1957; No. 95, 1959; No. 17, 1960; No. 75,
1964; No. 155, 1965; No. 93, 1966; No. 120, 1968; No. 216, 1973; No. 133,
1974; No. 37, 1976; Nos. 19 and 59, 1979; Nos. 39 and 117, 1983; No. 123,
1984; No. 65, 1985 (as amended by No. 193, 1985); Nos. 4, 47, 104, 123 and
168, 1985; Nos. 41, 46, 48, 112, 144 and 154, 1986; No. 49, 1986 (as amended
by No. 141, 1987); Nos. 120 and 145, 1987; No. 62, 1987 (as amended by No.
108, 1987); No. 108, 1987 (as amended by No. 138, 1987); No. 138, 1987 (as
amended by No. 11, 1988); Nos. 95 and 97, 1988; Nos. 97, 105, 107, 124, 163
and 167, 1989; and No. 20, 1990.
TAXATION LAWS AMENDMENT (FOREIGN INCOME) ACT 1990 No. 5 of 1991
- SECT 66
Interpretation
66. Section 8J of the Principal Act is amended:
by inserting in paragraph (2) (k) "or 264A (1) (d) or (e)" after "264
(1) (b)";
by inserting after paragraph (2) (k) the following paragraph:
subparagraph 451 (2) (c) (ii) or paragraph
453 (1) (e) of the Income Tax Assessment Act 1936;".
The
comprises Act No. 5, 1991 amended as indicated in the Tables below.
For all relevant information pertaining to application, saving or transitional provisions
Act | Number and year | Date of Assent | Date of commencement | Application, saving or transitional provisions |
5, 1991 | 8 Jan 1991 | 8 Jan 1991 | ||
48, 1991 | 24 Apr 1991 | S. 104: | — | |
216, 1991 | 24 Dec 1991 | Ss. 119 and 120: Royal Assent | S. 120 | |
75, 2010 | 28 June 2010 | Schedule 6 (item 98): 29 June 2010 | — |
(a) Subsection 2(2) of theTaxation Laws Amendment Act 1991 provides as follows:
(2) Sections 9, 15, 33, 70, 81, 82 and 83 and Part 6 are taken to have commenced
immediately after the commencement of the
Taxation Laws Amendment (Foreign
Income) Act 1990 .The
Taxation Laws Amendment (Foreign Income) Act 1990 commenced on 8 January 1991.
| |
Provision affected | How affected |
S. 52..................................... | am. No. 48, 1991 |
S. 53..................................... | am. No. 216, 1991 |
S. 61..................................... | rep. No. 75, 2010 |
Taxation Laws Amendment Act (No. 3) 1991 (No. 216, 1991)
The amendments made by this Part apply to assessments in respect of income of the 1990-91 year of income and of all subsequent years of income.
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