Income Tax Assessment Act 1936

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

Division 8 - Active income test  

Subdivision G - Substantiation requirements  

SECTION 451   ACTIVE INCOME TEST - SUBSTANTIATION REQUIREMENTS FOR COMPANY  

451(1)   [Substantiation requirements]  

The substantiation requirements for a company in relation to a statutory accounting period are as follows:

(a) the company must keep (in Australia or elsewhere) such accounting records (in this section called the " general accounting records " ) as correctly record and explain the matters, transactions, acts and operations that are relevant to the preparation of the recognised accounts of the company for the statutory accounting period;

(b) the general accounting records must be so kept as to enable the recognised accounts of the company for the statutory accounting period to be prepared;

(c) the company must retain, for the retention period in relation to the statutory accounting period:

(i) the recognised accounts of the company for the statutory accounting period; and

(ii) the general accounting records of the company for the statutory accounting period;

(d) the company must comply with a request made in a notice given to it under subsection (2) in relation to the statutory accounting period.

451(2)   [Taxpayer's notice]  

An entity that is an attributable taxpayer in relation to a company, being a CFC, as at the end of a statutory accounting period of the company may, by notice in writing served on the company (in this section called the " taxpayer ' s notice " ), request the company:

(a) to give to the taxpayer, within the period and in the manner specified in the taxpayer's notice, copies of such of the following documents as are specified in the notice:

(i) the recognised accounts of the company for the statutory accounting period;

(ii) the general accounting records of the company for the statutory accounting period; or

(b) to prepare a document containing particulars of the basis of the calculation of the tainted income ratio of the company for the statutory accounting period and to give to the taxpayer, within the period and in the manner specified in the taxpayer's notice, a copy of that document; or

(c) if the company was a partner in a partnership at any time during the statutory accounting period:

(i) to obtain from the partnership, in accordance with a request made in a notice given to the partnership by the company under subsection 452(2) , copies of specified documents; and

(ii) to give those copies to the taxpayer, within the period and in the manner specified in the taxpayer's notice.

451(3)   [Period in taxpayer's notice]  

The period specified in the taxpayer's notice must end:

(a) later than 60 days after the date of service of the taxpayer's notice; and

(b) before the end of the retention period in relation to the statutory accounting period.

451(4)   [Extension of period]  

Upon written application made by the taxpayer within the period specified in the taxpayer's notice, the Commissioner may, by notice in writing served on the taxpayer, extend the period specified in the taxpayer's notice.

451(5)   [Period deemed extended]  

Where:

(a) an application under subsection (4) is made before the end of the period specified in the taxpayer's notice; and

(b) at the end of the period, the Commissioner has not notified the taxpayer of the Commissioner's decision on the application;

the following provisions have effect:

(c) if the Commissioner's decision is not notified to the taxpayer before the end of the retention period in relation to the statutory accounting period concerned - the Commissioner is taken to have extended the period under subsection (4) to the end of the retention period;

(d) if the Commissioner's decision is notified to the taxpayer before the end of the retention period in relation to the statutory accounting period concerned - the Commissioner is taken to have extended the period under subsection (4) to the end of the day (in this subsection called the " decision day " ) on which the Commissioner's decision is notified to the taxpayer;

(e) if the Commissioner decides to extend the period - subject to subsection (6), the extended period must end after the decision day.

451(6)   [End of extended period]  

The period as extended under subsection (4) must end before the end of the retention period in relation to the statutory accounting period.

451(7)   [Reference to period]  

A reference in this section to the period specified in the taxpayer's notice is a reference to the period as extended under subsection (4).

451(8)   [Effect of non-compliance]  

A refusal or failure to comply with the taxpayer's notice is not an offence.

451(9)   [Application of s 262A(4)]  

Subsection 262A(4) does not apply to records kept or obtained under or for the purposes of this section.