Income Tax Assessment Act 1936
PART X
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ATTRIBUTION OF INCOME IN RESPECT OF CONTROLLED FOREIGN COMPANIES
Division 7
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Calculation of attributable income of CFC
Subdivision D
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Modifications relating to losses
SECTION 431
DEDUCTION ETC. FOR PREVIOUS PERIOD LOSS
431(1)
Where there are one or more losses of the eligible CFC of any statutory accounting period before the eligible period, the losses, to the extent they have not been previously taken into account under this section in respect of any such period, are to be taken into account in accordance with this section.
431(2)
The losses are to be taken into account as follows:
(a) they are to be applied first against any (sometimes-exempt income) gain for the eligible period, to the extent that the gain has not already been applied under section 426 in determining whether there is a loss for the eligible period;
(b) any excess is then a notional allowable deduction for the eligible period, but only to the extent that the deduction does not exceed the amount of the notional assessable income for the period as reduced by notional allowable deductions other than under this section;
(c) where there are 2 or more losses, they are to be taken into account in the order in which they arose.
431(3)
A loss for a statutory accounting period is only to be taken into account under subsection (2) if the eligible CFC was a CFC at the end of that statutory accounting period and each following statutory accounting period before the eligible period.
431(4)
A loss for a statutory accounting period is to be taken into account under subsection (2) only if:
(a) where the eligible CFC is a resident of a listed country at the end of the eligible period:
(b) where the eligible CFC is a resident of an unlisted country at the end of the eligible period:
431(4A)
If:
(a) at the end of both the eligible period and of a prior statutory accounting period, the eligible CFC was a resident of the same country; and
(b) the country was either:
431(4B)
If:
(a) the eligible CFC is a resident of an unlisted country at the end of the eligible period; and
(b) that country emerged from the dissolution of another country; and
(c) the other country was in existence at the end of a prior statutory accounting period; and
(d) at the end of that statutory accounting period, the CFC was a resident of the other country; and
(e) the other country was a listed country at the end of that statutory accounting period;
431(4C)
(Repealed by No 143 of 2007 )
431(4D)
If:
(a) as a result of the operation of subsection (4), a loss of a CFC for a statutory accounting period was not taken into account under subsection (2) in calculating the attributable income of the CFC for a later statutory accounting period (the second statutory accounting period ); and
(b) the eligible period is later than the second statutory accounting period;
431(5)
A loss for a statutory accounting period is not to be taken into account under subsection (2) if, assuming that it were a tax loss (within the meaning of the Income Tax Assessment Act 1997 ) of the eligible CFC, it would not be taken into account or allowed as a deduction in relation to the eligible period.
View history note
Hide history noteWhere there are one or more losses of the eligible CFC of any statutory accounting period before the eligible period, the losses, to the extent they have not been previously taken into account under this section in respect of any such period, are to be taken into account in accordance with this section.
431(2)
The losses are to be taken into account as follows:
(a) they are to be applied first against any (sometimes-exempt income) gain for the eligible period, to the extent that the gain has not already been applied under section 426 in determining whether there is a loss for the eligible period;
(b) any excess is then a notional allowable deduction for the eligible period, but only to the extent that the deduction does not exceed the amount of the notional assessable income for the period as reduced by notional allowable deductions other than under this section;
(c) where there are 2 or more losses, they are to be taken into account in the order in which they arose.
431(3)
A loss for a statutory accounting period is only to be taken into account under subsection (2) if the eligible CFC was a CFC at the end of that statutory accounting period and each following statutory accounting period before the eligible period.
431(4)
A loss for a statutory accounting period is to be taken into account under subsection (2) only if:
(a) where the eligible CFC is a resident of a listed country at the end of the eligible period:
(i) the eligible CFC is a resident of a listed country at the end of that statutory accounting period; and
(ii) if there are any statutory accounting periods (the intervening periods ) occurring between that statutory accounting period and the eligible period - the eligible CFC was a resident of a listed country at the end of each of the intervening periods; or
(b) where the eligible CFC is a resident of an unlisted country at the end of the eligible period:
(i) the eligible CFC is a resident of an unlisted country at the end of that statutory accounting period; and
(ii) if there are any statutory accounting periods (also the intervening periods ) occurring between that statutory accounting period and the eligible period - the eligible CFC was a resident of an unlisted country at the end of each of the intervening periods.
431(4A)
If:
(a) at the end of both the eligible period and of a prior statutory accounting period, the eligible CFC was a resident of the same country; and
(b) the country was either:
(i) a listed country at the end of the eligible period and an unlisted country at the end of that statutory accounting period; or
(ii) an unlisted country at the end of the eligible period and a listed country at the end of that statutory accounting period;
subsection (4) does not prevent a loss for that statutory accounting period, or an earlier statutory accounting period, from being taken into account under subsection (2).
431(4B)
If:
(a) the eligible CFC is a resident of an unlisted country at the end of the eligible period; and
(b) that country emerged from the dissolution of another country; and
(c) the other country was in existence at the end of a prior statutory accounting period; and
(d) at the end of that statutory accounting period, the CFC was a resident of the other country; and
(e) the other country was a listed country at the end of that statutory accounting period;
subsection (4) does not prevent a loss for that statutory accounting period, or an earlier statutory accounting period, from being taken into account under subsection (2).
431(4C)
(Repealed by No 143 of 2007 )
431(4D)
If:
(a) as a result of the operation of subsection (4), a loss of a CFC for a statutory accounting period was not taken into account under subsection (2) in calculating the attributable income of the CFC for a later statutory accounting period (the second statutory accounting period ); and
(b) the eligible period is later than the second statutory accounting period;
then, despite anything in subsection (4), (4A) or (4B), the loss is not to be taken into account under subsection (2) in calculating the attributable income of the CFC for the eligible period.
431(5)
A loss for a statutory accounting period is not to be taken into account under subsection (2) if, assuming that it were a tax loss (within the meaning of the Income Tax Assessment Act 1997 ) of the eligible CFC, it would not be taken into account or allowed as a deduction in relation to the eligible period.
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