New International Tax Arrangements (Foreign-owned Branches and Other Measures) Act 2005 (64 of 2005)

Schedule 2   Amendments relating to CFCs

Income Tax Assessment Act 1936

7   Subsection 457(2) (subparagraphs (a)(i) and (ii) of the definition of Adjusted distributable profits )

Repeal the subparagraphs, substitute:

(i) the CFC's income were its adjusted tainted income (excluding any non-portfolio dividends) derived during the period beginning on the first day of the statutory accounting period in which the residence-change time occurred and ending immediately before the time at which the residence-change time occurs; and

(ii) the CFC's only other income were an amount that the CFC would have derived had it disposed of all of its tainted assets immediately before the residence-change time for a consideration equal to their market value; and

(iii) the CFC's only expenses were expenses related to income covered by subparagraphs (i) and (ii); or