PART X
-
ATTRIBUTION OF INCOME IN RESPECT OF CONTROLLED FOREIGN COMPANIES
History
Pt X inserted by No 5 of 1991.
Division 7
-
Calculation of attributable income of CFC
Subdivision D
-
Modifications relating to losses
SECTION 431
DEDUCTION ETC. FOR PREVIOUS PERIOD LOSS
431(1)
Where there are one or more losses of the eligible CFC of any statutory accounting period before the eligible period, the losses, to the extent they have not been previously taken into account under this section in respect of any such period, are to be taken into account in accordance with this section.
History
S 431(1) amended by
No 143 of 2007
, s 3 and Sch 1 item 117, by omitting
"
, in relation to notional assessable income of a particular class,
"
after
"
losses of the eligible CFC
"
, 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 s
559A
.
431(2)
The losses are to be taken into account as follows:
(a)
they are to be applied first against any (sometimes-exempt income) gain for the eligible period, to the extent that the gain has not already been applied under section
426
in determining whether there is a loss for the eligible period;
(b)
any excess is then a notional allowable deduction for the eligible period, but only to the extent that the deduction does not exceed the amount of the notional assessable income for the period as reduced by notional allowable deductions other than under this section;
(c)
where there are 2 or more losses, they are to be taken into account in the order in which they arose.
History
S 431(2) amended by
No 143 of 2007
, s 3 and Sch 1 items 118 and 119, by omitting
"
of the class
"
after
"
(sometimes-exempt income) gain
"
in para (a) and substituting para (b), 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 s
559A
. Para (b) formerly read:
(b)
any excess is then a notional allowable deduction in respect of notional assessable income of that class for the eligible period, but only to the extent that the deduction does not exceed the amount of that notional assessable income as reduced by notional allowable deductions of that class other than under this section;
431(3)
A loss for a statutory accounting period is only to be taken into account under subsection (2) if the eligible CFC was a CFC at the end of that statutory accounting period and each following statutory accounting period before the eligible period.
431(4)
A loss for a statutory accounting period is to be taken into account under subsection (2) only if:
(a)
where the eligible CFC is a resident of a listed country at the end of the eligible period:
(i)
the eligible CFC is a resident of a listed country at the end of that statutory accounting period; and
(ii)
if there are any statutory accounting periods (the
intervening periods
) occurring between that statutory accounting period and the eligible period
-
the eligible CFC was a resident of a listed country at the end of each of the intervening periods; or
(b)
where the eligible CFC is a resident of an unlisted country at the end of the eligible period:
(i)
the eligible CFC is a resident of an unlisted country at the end of that statutory accounting period; and
(ii)
if there are any statutory accounting periods (also the
intervening periods
) occurring between that statutory accounting period and the eligible period
-
the eligible CFC was a resident of an unlisted country at the end of each of the intervening periods.
History
S 431(4), (4A) and (4B) substituted for s 431(4), (4A), (4B) and (4C) by
No 143 of 2007
, s 3 and Sch 1 item 120, 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 s
559A
. S 431(4) formerly read:
431(4)
A loss for a statutory accounting period is not to be taken into account under subsection (2):
(a)
where the eligible CFC is a resident of a listed country at the end of the eligible period
-
if that statutory accounting period is one at whose end the CFC was:
(i)
if that statutory accounting period began on or after 1 July 1997
-
not a resident of a listed country; or
(ii)
if that statutory accounting period began before 1 July 1997
-
not a resident of a listed country (within the meaning of this Act as in force immediately before 1 July 1997);
or is any statutory accounting period before such a period; or
(b)
where the eligible CFC is a resident of an unlisted country at the end of the eligible period
-
if that statutory accounting period is one at whose end the CFC was:
(i)
if that statutory accounting period began on or after 1 July 1997
-
not a resident of an unlisted country; or
(ii)
if that statutory accounting period began before 1 July 1997
-
not a resident of an unlisted country (within the meaning of this Act as in force immediately before 1 July 1997);
or is any statutory accounting period before such a period.
S 431(4) amended by No 96 of 2004 and No 155 of 1997.
431(4A)
If:
(a)
at the end of both the eligible period and of a prior statutory accounting period, the eligible CFC was a resident of the same country; and
(b)
the country was either:
(i)
a listed country at the end of the eligible period and an unlisted country at the end of that statutory accounting period; or
(ii)
an unlisted country at the end of the eligible period and a listed country at the end of that statutory accounting period;
subsection (4) does not prevent a loss for that statutory accounting period, or an earlier statutory accounting period, from being taken into account under subsection (2).
History
S 431(4), (4A) and (4B) substituted for s 431(4), (4A), (4B) and (4C) by
No 143 of 2007
, s 3 and Sch 1 item 120, 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 s
559A
. S 431(4A) formerly read:
431(4A)
If:
(a)
the eligible CFC is a resident of a listed country at the end of the eligible period; and
(b)
at the end of a prior statutory accounting period, the CFC was a resident of the same country; and
(c)
at the end of that statutory accounting period, the country was:
(i)
if that statutory accounting period began on or after 1 July 1997
-
an unlisted country; or
(ii)
if that statutory accounting period began before 1 July 1997
-
an unlisted country (within the meaning of this Act as in force immediately before 1 July 1997);
subsection (4) does not prevent a loss for that statutory accounting period, or an earlier statutory accounting period, from being taken into account under subsection (2).
S 431(4A) amended by No 96 of 2004 and inserted by No 155 of 1997.
431(4B)
If:
(a)
the eligible CFC is a resident of an unlisted country at the end of the eligible period; and
(b)
that country emerged from the dissolution of another country; and
(c)
the other country was in existence at the end of a prior statutory accounting period; and
(d)
at the end of that statutory accounting period, the CFC was a resident of the other country; and
(e)
the other country was a listed country at the end of that statutory accounting period;
subsection (4) does not prevent a loss for that statutory accounting period, or an earlier statutory accounting period, from being taken into account under subsection (2).
History
S 431(4), (4A) and (4B) substituted for s 431(4), (4A), (4B) and (4C) by
No 143 of 2007
, s 3 and Sch 1 item 120, 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 s
559A
. S 431(4B) formerly read:
431(4B)
If:
(a)
the eligible CFC is a resident of an unlisted country at the end of the eligible period; and
(b)
that country emerged from the dissolution of another country; and
(c)
the other country was in existence at the end of a prior statutory accounting period; and
(d)
at the end of that statutory accounting period, the CFC was a resident of the other country; and
(e)
the other country was:
(i)
if that statutory accounting period began on or after 1 July 1997
-
a listed country at the end of that statutory accounting period; or
(ii)
if that statutory accounting period began before 1 July 1997
-
a listed country (within the meaning of this Act immediately before 1 July 1997) at the end of that statutory accounting period;
subsection (4) does not prevent a loss for that statutory accounting period, or an earlier statutory accounting period, from being taken into account under subsection (2).
S 431(4B) amended by No 96 of 2004 and inserted by No 155 of 1997.
431(4C)
(Repealed by
No 143 of 2007
)
History
S 431(4), (4A) and (4B) substituted for s 431(4), (4A), (4B) and (4C) by
No 143 of 2007
, s 3 and Sch 1 item 120, 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 s
559A
. S 431(4C) formerly read:
431(4C)
If:
(a)
the eligible CFC is a resident of an unlisted country at the end of the eligible period; and
(b)
at the end of a prior statutory accounting period, the CFC was a resident of the same country; and
(c)
at the end of that statutory accounting period, the country was:
(i)
if that statutory accounting period began on or after 1 July 1997
-
a listed country; or
(ii)
if that statutory accounting period began before 1 July 1997
-
a listed country (within the meaning of this Act as in force immediately before 1 July 1997);
subsection (4) does not prevent a loss for that statutory accounting period, or an earlier statutory accounting period, from being taken into account under subsection (2).
S 431(4C) amended by No 96 of 2004 and inserted by No 155 of 1997.
431(4D)
If:
(a)
as a result of the operation of subsection (4), a loss of a CFC for a statutory accounting period was not taken into account under subsection (2) in calculating the attributable income of the CFC for a later statutory accounting period (the
second statutory accounting period
); and
(b)
the eligible period is later than the second statutory accounting period;
then, despite anything in subsection (4), (4A) or (4B), the loss is not to be taken into account under subsection (2) in calculating the attributable income of the CFC for the eligible period.
History
S 431(4D) amended by
No 143 of 2007
, s 3 and Sch 1 item 121, by substituting
"
or (4B)
"
for
"
, (4B) or (4C)
"
, 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 s
559A
.
S 431(4D) inserted by No 155 of 1997.
431(5)
A loss for a statutory accounting period is not to be taken into account under subsection (2) if, assuming that it were a tax loss (within the meaning of the
Income Tax Assessment Act 1997
) of the eligible CFC, it would not be taken into account or allowed as a deduction in relation to the eligible period.
History
S 431(5) substituted by
No 143 of 2007
, s 3 and Sch 1 item 122, 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 s
559A
. S 431(5) formerly read:
431(5)
A loss for a statutory accounting period is not to be taken into account under subsection (2) if, assuming that it were a loss within the meaning of former section 80 that had been incurred by the eligible CFC, it would not, because of former section 80A or 80DA, be taken into account for the purpose of applying former section 80 in relation to the eligible period.
S 431(5) amended by
No 101 of 2006
, s 3 and Sch 2 item 478, by amending references to repealed inoperative provisions, effective 14 September 2006. For application and savings provisions see the
CCH Australian Income Tax Legislation archive
.
S 431 inserted by No 5 of 1991.
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