Income Tax Assessment Act 1936

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

Division 1 - Preliminary  

SECTION 327  

327   ELIGIBLE FINANCE SHARES  

For the purposes of this Part, a share in a company is an eligible finance share if all the following conditions are satisfied:

(a) the shareholder is an AFI or an AFI subsidiary;

(b) the share was issued to the shareholder by the company in the ordinary course of business carried on by the shareholder;

(c) the shareholder is not an associate of the company;

(d) having regard to:

(i) the manner in which the amount of dividends in respect of the share are to be calculated; and

(ii) the conditions applicable to the payment of dividends in respect of the share; and

(iii) any other relevant matters;

the payment of the dividends in respect of the share may reasonably be regarded as equivalent to the payment of interest on a loan where the interest accrues at intervals not exceeding 12 months and is paid not later than 12 months after it accrues.