Income Tax Assessment Act 1936

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

Division 1 - Preliminary  

SECTION 324   WHEN INCOME OR PROFITS SUBJECT TO TAX IN A LISTED COUNTRY  

324(1)   [ Circumstances where income or profits subject to tax]  

Subject to this section, for the purposes of this Part, a particular item of income or profits derived by an entity is taken to be subject to tax in a listed country in a particular tax accounting period if, and only if, foreign tax (other than a withholding-type tax) is payable under a tax law of the listed country in respect of the item because the item is included in the tax base of that law for the tax accounting period.

324(2)   [Items deemed subject to tax by regulations]  

If:

(a) apart from this subsection and subsections (3) and (4), a particular item of income or profits derived by an entity is not subject to tax in a listed country in a particular tax accounting period; and

(b) apart from a feature of a kind specified in the regulations, the item would have been subject to tax in the listed country in the tax accounting period;

the regulations may provide that the item is to be treated, for the purposes of this Part or one or more specified provisions of this Part, as if it were subject to tax in the listed country in the tax accounting period.

324(3)   [Capital gains deemed subject to tax]  

Where:

(a) an entity becomes a resident of a particular listed country (in this section called the " current listed country " ) at a particular time (in this section called the " residence-change time " ); and

(b) the entity owns an asset at the residence-change time; and

(c) the entity disposes of the asset while a resident of the current listed country;

then, for the purposes of this Part:

(d) if, apart from this paragraph, the only part of a capital gain on the disposal of the asset that is subject to tax in the listed country is the part that relates to the period after the residence-change time - the whole of the capital gain, whether it relates to the period before or after the residence-change time, is, subject to subsection (4), taken to be subject to tax in the current listed country; and

(e) subsection (4) applies.

324(4)   [Capital gains deemed not subject to tax]  

Where:

(a) a capital gain on the disposal of the asset would, apart from this subsection and whether or not paragraph (3)(d) applies, be subject to tax in the current listed country; and

(b) at a time or times when it owned the asset before the residence-change time (but disregarding any time or times before a change of residence from an unlisted country to a listed country), the entity was a resident of one or more listed countries (each of which is in this subsection called a " previous listed country " ); and

(c) if the entity had disposed of the asset when it ceased to be a resident of a particular previous listed country (in this subsection called the " non-taxing listed country " ), any capital gain on the disposal would not have been subject to tax in that country; and

(d) if the entity had disposed of the asset when it ceased to be a resident of another previous listed country after the non-taxing listed country, any capital gain on the disposal would not have been subject to tax in that other previous listed country to the extent that it relates to the period of residence by the entity in the non-taxing listed country;

then, for the purposes of this Part, so much of the gain as relates to the period of residence in the non-taxing listed country is taken not to be subject to tax in the current listed country.

Note:

Section 830-75 of the Income Tax Assessment Act 1997 sets out additional circumstances, relating to entities that are foreign hybrids, in which a gain or profit is subject to tax in a listed country.