Income Tax Assessment Act 1936

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

Division 3 - Control interests, attribution interests, attributable taxpayers and attribution percentages  

Subdivision A - Control interests  

SECTION 349   ASSOCIATE-INCLUSIVE CONTROL INTEREST IN A COMPANY OR TRUST  

349(1)   [Interests held by entity and associates]  

Subject to this section, the associate-inclusive control interest that an entity (in this section called the lower entity ) holds in a company or trust at a particular time is the aggregate of:

(a) the direct control interest in the company or trust that the lower entity holds at that time; and

(b) the indirect control interests in the company or trust that the lower entity holds at that time; and

(c) the direct control interests in the company or trust held at that time by associates of the lower entity; and

(d) the indirect control interests in the company or trust held at that time by associates of the lower entity.

349(2)   [Indirect interests to be disregarded]  

In calculating the associate-inclusive control interest that the lower entity holds in the company or trust:

(a) an indirect control interest of the lower entity is not to be counted under paragraph (1)(b) to the extent to which it is calculated by reference to:

(i) a direct control interest in the company or trust that is taken into account under paragraph (1)(c); or

(ii) an indirect control interest in the company or trust that is taken into account under paragraph (1)(d); and

(b) an indirect control interest of an associate of the lower entity is not to be counted under paragraph (1)(d) to the extent to which it is calculated by reference to:

(i) a direct control interest in the company or trust that is taken into account under paragraph (1)(a) or (c); or

(ii) an indirect control interest in the company or trust that is taken into account under paragraph (1)(b) or (d).

349(3)   [Interest held or entitled to be acquired]  

If, apart from this subsection, both of the following things would be counted in calculating the associate-inclusive control interest that the lower entity holds in the company or trust:

(a) the holding of a direct control interest by the lower entity or any other entity;

(b) an entitlement to acquire that direct control interest;

only one of those things is to be taken into account.

349(4)   [Entity deemed to hold 100% interest]  

For the purpose of determining any of the following matters:

(a) whether the aggregate of the associate-inclusive control interests that a group of entities holds in a company is not less than 50%;

(b) whether a single Australian entity has an associate-inclusive control interest in a company of not less than 40%;

(c) whether the aggregate of the associate-inclusive control interests that a group of entities holds in a trust is not less than 50%;

(d) whether the associate-inclusive control interest that an Australian entity holds in a CFC is not less than 10%;

(e) whether the associate-inclusive control interest that an Australian entity holds in a company is not less than 1%;

if, apart from this subsection an entity, or each of 2 or more entities, would hold a direct control interest, or control tracing interest, in another entity (in this subsection called the higher entity ) equal to 100%:

(f) only one of those entities is to be taken to hold a direct control interest, or control tracing interest, as the case may be, in the higher entity equal to 100%; and

(g) no other entity (whether or not the entity would, apart from this subsection hold a direct control interest, or control tracing interest, of 100%) is to be taken to hold any direct control interest, or control tracing interest, as the case may be, in the higher entity.

349(5)   [Interests held by group of entities]  

For the purpose of calculating the aggregate of the associate-inclusive control interests that a group of entities holds in a company or trust:

(a) if a particular direct control interest or indirect control interest that an entity holds in another entity would be counted more than once because the entity is an associate of one or more other entities in the group, that interest is to be counted only once; and

(b) if both of the following things would, but for this subsection, be counted in calculating the aggregate of the associate-inclusive control interests that a group of entities holds in a company or trust:

(i) the holding of a direct control interest by an entity;

(ii) an entitlement to acquire that direct control interest;

only one of those things is to be counted.

349(6)   [Commissioner's decision]  

If it is necessary for the purposes of this section to decide:

(a) which one of 2 things is to be taken into account for the purposes of subsection (3) or (5); or

(b) which one of 2 or more entities is to be chosen for the purposes of paragraph (4)(f);

the Commissioner may make that decision.