Income Tax Assessment (1936 Act) Regulation 2015

PART 8 - ATTRIBUTION OF INCOME IN RESPECT OF CONTROLLED FOREIGN COMPANIES  

SECTION 17   ITEMS OF DESIGNATED CONCESSION INCOME  

17(1)    
For paragraph (a) of the definition of designated concession income in subsection 317(1) of the Act, in relation to a listed country mentioned in column 1 of an item of the following table:

(a) the kind of income or profits to which columns 2, 3 and 4 of the item apply is specified; and

(b) the kind of feature mentioned in column 4 of the item is specified in relation to income or profits of that kind.

Designated concession income
Item	Column 1	Column 2	Column 3	Column 4
	Country	Income or profits	derived by …	and that is …
1	Canada	All passive income and tainted services income	an entity that operates in Canada as an international banking centre under Canadian law	not subject to tax in Canada in a tax accounting period
2	Canada	All passive income	a company that operates in Canada as an investment corporation, or as a mutual fund corporation, under Canadian tax law	not taxed in Canada at the normal company tax rate
3	France	All passive income	a company that operates in France as a soci é t é d ' investissement à capital variable ( SICAV ) under French law	not subject to tax in France in a tax accounting period
4	France	All income or profits	a company that:	not used as the basis for establishing the amount of taxable income, taxable profits, tax base or tax liability of the entity under the tax law of France
					(a)	is treated as a resident of France for the purposes of the tax law of France; and
					(b)	has elected to be taxed on a tonnage basis rather than on income or profits
5	Germany	All passive income in carrying on business outside Germany at or through a permanent establishment	a company that is treated as a resident of Germany for the purposes of the tax law of Germany	not subject to tax in Germany in a tax accounting period
6	Germany	Ordinary capital gains in respect of shares in companies	either:	not taxed in Germany at the normal company tax rate
			(a)		a company that is treated as a resident of Germany for the purposes of the tax law of Germany; or
					(b)	any company in carrying on business in Germany at or through a permanent establishment of the company in Germany
7	Germany	All income or profits	a company that:	not used as the basis for establishing the amount of taxable income, taxable profits, tax base or tax liability of the entity under the tax law of Germany
					(a)	is treated as a resident of Germany for the purposes of the tax law of Germany; and
					(b)	has elected to be taxed on a tonnage basis rather than on income or profits
8	Japan	All income or profits derived from Japanese governmental bonds	an entity in carrying on business in Japan at or through a permanent establishment of the entity in that country	not subject to tax in Japan in a tax accounting period
9	New Zealand	Ordinary capital gains in respect of tainted assets	either:	not subject to tax in New Zealand in a tax accounting period
			(a)		a company that is treated as a resident of New Zealand for the purposes of the tax law of New Zealand; or
					(b)	any entity in carrying on business in New Zealand at or through a permanent establishment of the entity in New Zealand
10	United Kingdom	Ordinary capital gains in respect of shares in companies if:	a company that is treated as a resident of the United Kingdom for the purposes of the tax law of the United Kingdom	not subject to tax in the United Kingdom in a tax accounting period as a consequence of the substantial shareholding exemption available under the tax law of the United Kingdom
		(a)			the CGT assets of the companies; or
		(b)			the underlying CGT assets of the companies held through one of more non-resident entities that are associates;
		include CGT assets having the necessary connection with Australia
11	United Kingdom	All income or profits	a company that:	not used as the basis for establishing the amount of taxable income, taxable profits, tax base or tax liability of the entity under the tax law of the United Kingdom
					(a)	is treated as a resident of the United Kingdom for the purposes of the tax law of the United Kingdom; and
					(b)	has elected to be taxed on a tonnage basis rather than on income or profits
12	United Kingdom	All passive income	an entity that operates in the United Kingdom as an open-ended investment company under the law of the United Kingdom	not taxed in the United Kingdom at the normal company tax rate
13	United States of America	All income or profits derived from tax-exempt governmental bonds	either:	not subject to tax in the United States of America in a tax accounting period
			(a)		a company that is treated as a resident of the United States of America for the purposes of the tax law of the United States of America; or
					(b)	any entity in carrying on business in the United States of America at or through a permanent establishment of the entity in that country
14	United States of America	All passive income	an entity that operates in the United States of America as a regulated investment company under the tax law of the United States of America	not taxed in the United States of America at the normal company tax rate

Note:

Section 324 of the Act explains the meaning of the expression subject to tax . Section 325 of the Act explains when taxation occurs in a country at the country ' s normal company tax rate.

17(2)    
In this instrument:

ordinary capital gains
means gains or profits of a capital nature that:

(a) arise from the sale or disposal of all or part of a CGT asset; and

(b) are not gains or profits that would not be capital gains but for a provision of Australian tax law.

permanent establishment
, in relation to an entity that carries on business in a listed country:

(a) if:

(i) there is a double tax agreement in relation to the country; and

(ii) section 23AH of the Act applies to the entity;

has the same meaning as in the agreement; or

(b) otherwise - has the meaning given by subsection 6(1) of the Act.

Passive income

17(3)    
For the purposes of working out, in applying subsection (1) to income derived by an entity, whether the income is passive income of the entity:

(a) the reference in paragraph 446(1)(k) of the Act to net gains that accrued to the company in the statutory accounting period in respect of the disposal of tainted assets is treated as being a reference to capital gains that accrued to the company in the statutory accounting period in respect of tainted assets; and

(b) if section 23AH of the Act (about foreign branch income of Australian companies) applies to the entity - each reference, as appropriate, in Part X of the Act to a statutory accounting period is treated as a reference to a year of income; and

(c) if Division 6AAA of Part III of the Act (about non-resident trust estates) applies to the entity:

(i) each reference, as appropriate, in Part X of the Act to a company is treated as being a reference to the entity; and

(ii) each reference, as appropriate, in Part X to a statutory accounting period is treated as being a reference to a year of income.