Taxation Laws Amendment (Foreign Income Measures) Act 1997 (155 of 1997)

Schedule 1   Foreign source income

Part 1   General amendments

Income Tax Assessment Act 1936

49   Subsection 431(4)

Repeal the subsection, substitute:

(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 broad-exemption 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 broad-exemption 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 a non-broad-exemption 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 non-broad-exemption listed 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.

(4A) If:

(a) the eligible CFC is a resident of a broad-exemption 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 - a non-broad-exemption listed 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).

(4B) If:

(a) the eligible CFC is a resident of a non-broad-exemption listed 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 broad-exemption 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).

(4C) If:

(a) the eligible CFC is a resident of a non-broad-exemption 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 - a broad-exemption 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).

(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), (4B) or (4C), the loss is not to be taken into account under subsection (2) in calculating the attributable income of the CFC for the eligible period.