Income Tax Assessment Act 1936

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

Division 8 - Active income test  

Subdivision G - Substantiation requirements  

SECTION 453   ACTIVE INCOME TEST - SUBSTANTIATION REQUIREMENTS FOR ATTRIBUTABLE TAXPAYER  

453(1)   [Commissioner's notice]  

Where:

(a) the Commissioner has reason to believe that:

(i) a taxpayer is an attributable taxpayer in relation to a company, being a CFC, at the end of a statutory accounting period of the CFC; and

(ii) the application of a provision of this Division to the company may be relevant to the assessment of the taxpayer; and

(b) any of the following subparagraphs applies:

(i) the taxpayer has claimed (whether in a return of income or otherwise) that the company has passed the active income test in relation to the statutory accounting period;

(ii) the taxpayer's return of income of any year of income has been prepared on the basis that the company has passed the active income test in relation to the statutory accounting period;

(iii) the Commissioner has reason to believe that the company has passed the active income test in relation to the statutory accounting period;

the Commissioner may, by notice in writing served on the taxpayer (in this section called the ``Commissioner's notice'' ), request the taxpayer:

(c) to obtain from the company, in accordance with a request made in a notice given to the company under subsection 451(2) , copies of such documents as are specified in the Commissioner's notice; and

(d) if any of those copies are not in the English language - to make translations of those copies; and

(e) to produce to the Commissioner, within the period and in the manner specified in the Commissioner's notice:

(i) in all cases - those copies; and

(ii) if paragraph (d) applies - those translations.

453(2)   [Period in Commissioner's notice]  

The period specified in the Commissioner's notice must end:

(a) later than 90 days after the date of service of the notice; and

(b) before the end of the retention period in relation to the statutory accounting period.

453(3)   [Extension of period]  

Upon written application made by the taxpayer within the period specified in the Commissioner's notice, the Commissioner may, by notice in writing served on the taxpayer, extend the period specified in the Commissioner's notice.

453(4)   [Period deemed extended]  

Where:

(a) an application under subsection (3) is made before the end of the period specified in the Commissioner's notice; and

(b) at the end of the period, the Commissioner has not notified the taxpayer of the Commissioner's decision on the application;

the following provisions have effect:

(c) if the Commissioner's decision is not notified to the taxpayer before the end of the retention period in relation to the statutory accounting period concerned - the Commissioner is taken to have extended the period under subsection (3) to the end of the retention period;

(d) if the Commissioner's decision is notified to the taxpayer before the end of the retention period in relation to the statutory accounting period concerned - the Commissioner is taken to have extended the period under subsection (3) to the end of the day (in this subsection called the ``decision day'' ) on which the Commissioner's decision is notified to the taxpayer;

(e) if the Commissioner decides to extend the period - subject to subsection (5), the extended period must end after the decision day.

453(5)   [End of extended period]  

The period as extended under subsection (3) must end before the end of the retention period in relation to the statutory accounting period.

453(6)   [Reference to period]  

A reference in this section to the period specified in the Commissioner's notice is a reference to the period as extended under subsection (3).

453(7)   [Non-compliance not an offence]  

A refusal or failure to comply with the notice is not an offence.

453(8)   [Effect of non-compliance]  

If the taxpayer refuses or fails to comply with the notice, then, for the purposes of the application of this Part (other than this Division) to the taxpayer, the company is taken not to have passed the active income test in relation to the statutory accounting period concerned.