New International Tax Arrangements (Participation Exemption and Other Measures) Act 2004 (96 of 2004)

Schedule 2   Foreign branch income, non-portfolio dividends and listed countries

Part 3   Non-portfolio dividend exemption: consequential amendments

Income Tax Assessment Act 1936

72   Subsection 457(2) (definition of Adjusted distributable profits )

Repeal the definition, substitute:

Adjusted distributable profits means:

(a) if paragraph (1)(c) applies - the amount that would be the CFC's distributable profits at the residence-change time if:

(i) the CFC's only income were its adjusted tainted income (excluding any non-portfolio dividends) if all the CFC's tainted assets were disposed of at that time for a consideration equal to their market value; and

(ii) the CFC's only expenses were expenses related to income covered by subparagraph (i); or

(b) if paragraph (1)(d) applies - the amount that would be the CFC's distributable profits at the residence-change time if:

(i) the CFC's only income were its adjusted tainted income (excluding any non-portfolio dividends); and

(ii) the CFC's only expenses were expenses related to income covered by subparagraph (i).