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Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX

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PART 4-5 - GENERAL

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Division 802 - Foreign residents ' income with an underlying foreign source

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Subdivision 802-A - Conduit foreign income

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History

Subdiv 802-A inserted by No 147 of 2005, s 3 and Sch 2 item 1, applicable to income years starting on or after 1 July 2005. No 147 of 2005, s 3 and Sch 2 items 27 and 28, contains the following additional application provisions:

27 Income years starting on 1 July 2005 or after that day and before Royal Assent
(1)
This item applies to an entity for whom an income year (the first year ) starts:

(a) on 1 July 2005; or

(b) after that day and before the day on which this Act receives the Royal Assent [ ie 14 December 2005].

(2)
The entity can only declare an amount to be conduit foreign income under Subdivision 802-A of the Income Tax Assessment Act 1997 on or after the day on which this Act receives the Royal Assent.

(3)
An FDA surplus that exists for the entity under Subdivision B of Division 11A of Part III of the Income Tax Assessment Act 1936 at the end of the day before the day on which this Act receives the Royal Assent has effect as if it were the entity's conduit foreign income under Subdivision 802-A of the Income Tax Assessment Act 1997 .

(4)
Any FDA credit under section 128TA of the Income Tax Assessment Act 1936 that arises during the period starting on 1 July 2005 and ending on the day before the day on which this Act receives the Royal Assent cannot also be conduit foreign income.

(5)
Section 802-40 of the Income Tax Asssessment Act 1997 , as inserted by item 1, does not apply to the first year.
28 Later starting income years
(1)
This item applies to an entity for whom an income year (also the first year ) starts on or after the day on which this Act receives the Royal Assent and before 1 July 2006.

(2)
The amendments made by items 7, 8, 9, 13 and 16, and 19 to 24 apply from the start of the first year.

(3)
An FDA surplus that exists for the entity under Subdivision B of Division 11A of Part III of the Income Tax Assessment Act 1936 at the start of the first year has effect as if it were the entity's conduit foreign income under Subdivision 802-A of the Income Tax Assessment Act 1997 .
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Operative provisions

SECTION 802-40

802-40 Effect of foreign income tax offset on conduit foreign income

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The entity ' s conduit foreign income includes an amount if a tax offset arose for the entity under Division 770 for the income year immediately before the one in which the relevant time occurs. The amount is worked out using the formula:

Offset

(1 − *Corporate tax rate)
*Corporate tax rate

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History

S 802-40 amended by No 97 of 2008 , s 3 and Sch 3 item 157, by substituting the formula, effective 3 October 2008. The formula formerly read:

" Offset

(1 − *General company tax rate)
General company tax rate "

S 802-40 amended by No 143 of 2007 , s 3 and Sch 1 items 179 to 181, by substituting " tax offset arose for the entity under Division 770 " for " credit arose for the entity under section 160AF of the Income Tax Assessment Act 1936 " and substituting " Offset " for " Credit " in the formula, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under Div 770 heading . No 143 of 2007 , s 3 and Sch 1 item 223 also contains the following application and transitional rules:

Application and transitional rules for section 802-40 of the 1997 Act
(1)
The amendments apply in relation to income years starting one year later than the first income year covered by item 222 [ ie the 2008-09 income year] (the transitional year ).

(2)
Section 802-40 of the Income Tax Assessment Act 1997 has effect in relation to the transitional year as if section 160AF of the Income Tax Assessment Act 1936 had not been repealed.

S 802-40 inserted by No 147 of 2005, s 3 and Sch 2 item 1, applicable to income years starting on or after 1 July 2005. For additional application provisions see note under Subdiv 802-A heading. No 147 of 2005, s 3 and Sch 2 items 27 and 28, contains the following further application provision:

28 Later starting income years
(1)
This item applies to an entity for whom an income year (also the first year ) starts on or after the day on which this Act receives the Royal Assent [ ie 14 December 2005] and before 1 July 2006.
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(4)
Section 802-40 of the Income Tax Assessment Act 1997 , as inserted, does not apply to the first year.

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