Income Tax Assessment Amendment (Foreign Investment) Act 1992 (190 of 1992)

17   Attribution credit

Section 371 of the Principal Act is amended:

(a) by inserting after paragraph (1)(a) the following paragraphs:
        

"(aa) both the following conditions apply:

(i) an amount is included in the taxpayer's assessable income under section 456 in respect of the attributable income of another attribution account entity ('the other entity') for a statutory accounting period of the other entity;

(ii) that amount was calculated by reference to another amount ('the Part XI amount') that under Part XI was included in the attributable income of the other entity because the other entity had an interest in the eligible entity; or

(ab) each of the following conditions applies:

(i) an amount is included in the taxpayer's assessable income under section 456 in respect of the attributable income of another attribution account entity ('the other entity') for a statutory accounting period of the other entity;

(ii) the amount so included was calculated by reference to another amount that under Part XI was included in the attributable income of the other entity because the other entity had an interest in another attribution account entity ('the interposed entity');

(iii) the other amount referred to in subparagraph (ii) of this paragraph was calculated by reference to an amount ('the section 576 amount') that under section 576 was included in the notional income of the interposed entity because the interposed entity had an interest in the eligible entity; or";

(b) by inserting in subsection (2) "(2A), (2B)," after "subsections";
        

(c) by inserting after subsection (2) the following subsections:
        

"(2A) If an attribution credit arises under paragraph (1)(aa) for an eligible entity, the amount of the attribution credit is to be worked out using the formula:

(FIF income * Section 456 amount) / Notional assessable income.

In the formula:

'FIF income' means the amount of the foreign investment fund income included, in relation to the eligible entity, under Part XI in the notional assessable income of the other entity for the statutory accounting period of the other entity referred to in paragraph (1)(aa);

'Section 456 amount' means the amount included in the taxpayer's assessable income under section 456 in respect of the statutory accounting period referred to in paragraph (1)(aa) of the other entity;

'Notional assessable income' means the notional assessable income of the other entity under Part X for the statutory accounting period referred to in paragraph (1)(aa).

"(2B) If an attribution credit arises under paragraph (1)(ab) for an eligible entity, the amount of the attribution credit is to be worked out using the formula:

(FIF income * Section 456 amount) / Notional assessable income.

For the purposes of this subsection:

'FIF income' means the amount worked out using the formula:

(FIF income of the eligible entity * Section 529 amount) / Notional income of the interposed entity;

'FIF income of the eligible entity' means the amount of the foreign investment fund income included, in relation to the eligible entity, under section 576 in the notional income of the interposed entity referred to in subparagraph (1)(ab)(ii) for the notional accounting period of the interposed entity that ends during the statutory accounting period of the other entity referred to in subparagraph (1)(ab)(i);

'Section 529 amount' means the amount included in the notional assessable income of the other entity referred to in subparagraph (1)(ab)(i) under section 529 in respect of the statutory accounting period referred to in that subparagraph because of an interest that that other entity holds in the interposed entity;

'Notional income of the interposed entity' means the notional income of the interposed entity referred to in subparagraph (1)(ab)(ii) under Part XI for the notional accounting period of that entity that ends during the statutory accounting period of the other entity referred to in subparagraph (1)(ab)(ii);

'Section 456 amount' means the amount included in the taxpayer's assessable income under section 456 in respect of the statutory accounting period referred to in subparagraph (1)(ab)(i) of the other entity referred to in that subparagraph;

'Notional assessable income' means the notional assessable income of the other entity referred to in subparagraph (1)(ab)(i) under Part X for the statutory accounting period referred to in that subparagraph.

"(2C) If subsection (2A) applies to a taxpayer in respect of one or more eligible entities in respect of a particular section 456 amount, the amount of the attribution credit arising under paragraph (1)(a) for the other entity referred to in paragraph (1)(aa) is reduced by the attribution credit or the sum of the attribution credits that, except for subsection (2D), would arise for the eligible entity or eligible entities under subsection (2A).

"(2D) If subsection (2B) applies to a taxpayer in respect of one or more eligible entities in respect of a particular amount included in the notional income of the interposed entity referred to in subparagraph (1)(ab)(ii), the amount of the attribution credit arising under paragraph (1)(aa) for the interposed entity is to be reduced by the attribution credit or the sum of the attribution credits arising for the eligible entity or eligible entities under subsection (2B).";

(d) by inserting after paragraph (5)(a) the following paragraphs:
        

"(aa) in a paragraph (1)(aa) case-at the end of the notional accounting period of the eligible entity that gave rise to the Part XI amount referred to in subparagraph (1)(aa)(ii); or

(ab) in a paragraph (1)(ab) case-at the end of the notional accounting period of the eligible entity that gave rise to the section 576 amount referred to in subparagraph (1)(ab)(iii); or".