Part 2 - Is the CFC largely exempt because it is primarily engaged in a genuine active business?

Last updated 4 December 2006

Part 2 deals with the normal operation of the active income test. Special rules for banks, other financial institutions and insurance companies are not included.

Section 1	What is the purpose of the active income test?
Section 2	Is the CFC a resident of a foreign country? Does the CFC have a permanent establishment in its country of residence? Does the CFC keep proper records? Have the substantiation requirements been met? (Refer to chapter 4 part 2 for a description of these requirements.)
Section 3	Is the tainted income ratio less than 5%?
Section 4	Explanation of the terms used in this part.
Section 5	Tainted income ratio for listed country CFCs for statutory accounting periods commencing before 1 July 1997.

Section 1 - What is the purpose of the active income test?

Section 2 - Conditions to be met to satisfy the test

Section 3 - Is the tainted income ratio less than 5%?

Section 4 - Explanation of terms used in this part

QC17522

Part 2 - Is the CFC largely exempt because it is primarily engaged in a genuine active business?

Section 1 - What is the purpose of the active income test?

Section 2 - Conditions to be met to satisfy the test

Section 3 - Is the tainted income ratio less than 5%?

Section 4 - Explanation of terms used in this part

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