Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 768 - Foreign non-assessable income and gains  

Subdivision 768-A - Returns on foreign investment  

Foreign equity distributions on participation interests

SECTION 768-5   Foreign equity distributions on participation interests  

Foreign equity distributions received directly

768-5(1)    
A *foreign equity distribution is not assessable income, and is not *exempt income, of the entity to which it is made if:

(a) the entity is an Australian resident and a *corporate tax entity; and

(b) at the time the distribution is made, the entity satisfies the participation test in section 768-15 in relation to the company that made the distribution; and

(c) the entity:

(i) does not receive the distribution in the capacity of a trustee; or

(ii) receives the distribution in the capacity of a trustee of a *public trading trust; and

(d) the distribution is not one to which section 768-7 (which is about foreign income tax deductions) applies.

Foreign equity distributions received through interposed trusts and partnerships

768-5(2)    
An amount is not assessable income, and is not *exempt income, of an entity if:

(a) the entity is a beneficiary of a trust or a partner in a partnership, an Australian resident and a *corporate tax entity; and

(b) the amount is all or part of the *net income of the trust or partnership that would, apart from this subsection, be included in the entity ' s assessable income because of:

(i) Division 276 ; or

(ii) Division 5 or 6 of Part III of the Income Tax Assessment Act 1936 ; and

(c) the amount can be attributed (either directly or indirectly through one or more interposed trusts or partnerships that are not *corporate tax entities) to a *foreign equity distribution; and

(d) at the time the distribution is made, the entity satisfies the participation test in section 768-15 in relation to the company that made the distribution; and

(e) the entity:

(i) does not receive the distribution in the capacity of a trustee; or

(ii) receives the distribution in the capacity of a trustee of a *public trading trust; and

(f) the distribution is not one to which section 768-7 (which is about foreign income tax deductions) applies.

768-5(3)    
An amount that is *non-assessable non-exempt income under subsection (2) is taken, for the purpose of section 25-90 (about deductions relating to foreign non-assessable non-exempt income) to be derived from the same source as the *foreign equity distribution.