Income Tax Assessment Act 1936

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

Division 7 - Calculation of attributable income of CFC  

Subdivision B - General modifications of Australian tax law  

SECTION 398   MODIFIED APPLICATION OF DEPRECIATION PROVISIONS  

398(1)    
Where property has been held by the eligible CFC in a non-attributable income period in relation to the application of a depreciation provision to the property (in relation to the eligible CFC and the eligible taxpayer) prior to the eligible period, subsection (2) applies.

398(2)    
Such amount as the Commissioner considers appropriate to take account of the holding of the property as mentioned in subsection (1) is, under the depreciation provision:

(a) a notional allowable deduction to the eligible CFC; or

(b) included in the notional assessable income of the eligible CFC;

as the case requires, for the eligible period in relation to the eligible taxpayer, in substitution for any amount that would otherwise be so included or allowable.

398(3)    

For the purpose of exercising his or her power under subsection (2) to determine a notional allowable deduction in relation to:

(a) former sections 54 to 62 of this Act; or

(b) the former Division 42 (Depreciation) of the Income Tax Assessment Act 1997 (other than Subdivisions 42-L and 42-M); or

(c) Division 40 of that Act (other than Subdivision 40-E );

the Commissioner must assume that the property was used by the eligible CFC during any non-attributable income period wholly and exclusively for the purpose of producing notional assessable income.