(ii) foreign tax imposed by a tax law of the country is payable in respect of the income or profits but there is a feature in relation to that tax;
and the feature is of a kind specified in the regulations; or
(b) capital gains that would be made because of CGT event J1, if the assumptions in paragraphs 383(a) to (c) applied.
Note 1: CGT event J1 is about companies ceasing to be related after a roll‑over.
Note 2: Basically, the effect of those assumptions is that the company concerned is taken to be a taxpayer and a resident and CGT event J1 may therefore be taken to have happened.
direct attribution account interest has the meaning given by section 366.
direct attribution interest has the meaning given by section 356.
direct control interest:
(a) in relation to a company—has the meaning given by section 350;
(b) in relation to a trust—has the meaning given by section 351.
discretionary trust means a trust where:
(a) both of the following conditions are satisfied:
(i) a person (who may include the trustee) is empowered (either unconditionally or on the fulfilment of a condition) to exercise any power of appointment or other discretion;
(ii) the exercise of the power or discretion, or the failure to exercise the power or discretion, has the effect of determining, to any extent, either or both of the following:
(A) the identities of those who may benefit under the trust;
(B) how beneficiaries are to benefit, as between themselves, under the trust; or
(b) one or more of the beneficiaries under the trust have a contingent or defeasible interest in some or all of the corpus or income of the trust; or
(c) the trustee of another trust, being a trust where both of the conditions in paragraph (a) are satisfied, benefits or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting, under the first‑mentioned trust.
disposal of an asset includes:
(a) redemption; and
(b) CGT event J1 happening in relation to the asset (about companies ceasing to be related after a roll‑over) if the assumptions in paragraphs 383(a) to (c) applied.
Note: Basically, the effect of those assumptions is that the company concerned is taken to be a taxpayer and a resident and CGT event J1 may therefore be taken to have happened.
distributable profits, in relation to a company, means the amount, whether of an income or capital nature, that, having regard to the accounts of the company and such other matters as may reasonably be regarded as relevant, constitutes profits of the company that would be available for distribution by the company by way of dividends if there were disregarded any requirement of the constituent document, or of any resolution or decision, of the company restricting the availability of the profits for distribution in that way, other than any requirement providing for an eligible provision or reserve.
double tax agreement, in relation to a foreign country, means:
(a) if there is only one agreement (within the meaning of the International Tax Agreements Act 1953) in force in respect of the foreign country—that agreement; or
(b) if there are 2 or more agreements (within the meaning of that Act) in force in respect of the foreign country—the agreement that is expressed to be:
(i) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income; or; or
(ia) concerning the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income; or
(ii) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital; or
(iii) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital; or
(iv) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains; or
(v) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital and to certain other taxes.
eligible designated concession income, in relation to a listed country, in relation to a particular period (in this definition called the income period), means designated concession income in relation to the listed country:
(a) that is not subject to tax in another listed country in a tax accounting period:
(i) ending before the end of the income period; or
(ii) commencing during the income period; or
(b) that is:
(i) subject to tax in another listed country in a tax accounting period:
(A) ending before the end of the income period; or
(B) commencing during the income period; and
(ii) designated concession income in relation to that other listed country.
eligible finance share has the meaning given by section 327.
eligible finance share dividend means a dividend in respect of an eligible finance share.
eligible provision or reserve means:
(a) a provision or reserve required to be maintained by law; or
(b) a provision for any liability in respect of foreign tax or Australian tax; or
(c) a reserve maintained for the purpose of qualifying for relief from foreign tax; or
(d) a provision or reserve for depreciation, bad or doubtful debts or leave payments; or
(e) any other provision or reserve of a kind prescribed by regulations for the purposes of this paragraph.
eligible transferor has the meaning given by sections 347 and 348.
entitled to acquire has the meaning given by section 322.
entity means any of the following:
(a) a company;
(b) a partnership;
(c) a person in the capacity of trustee;
(d) any other person.
factoring income means income derived from carrying on a business of factoring.
financial intermediary business means:
(a) banking business; or
(b) a business whose income is principally derived from the lending of money.
general insurance company means a company whose sole or principal business is insurance business within the meaning of subsection 3(1) of the Insurance Act 1973, but does not include a life assurance company.
goods includes:
(a) ships, aircraft and other vehicles; and
(b) animals, including fish; and
(c) minerals, trees and crops, whether on, under or attached to land or not; and
(d) gas and electricity.
grossed‑up amount, in relation to an attribution debit, has the meaning given by section 373.
gross tainted turnover has the meaning given by section 435.
gross turnover has the meaning given by section 434.
group includes:
(a) one entity alone; and
(b) a number of entities the members of which are not in any way associated with each other nor acting together.
income interest in a partnership means an interest in the profits of the partnership.
income interest in a trust means an interest in the income of the trust.
indirect attribution account interest has the meaning given by section 369.
indirect attribution interest has the meaning given by section 357.
indirect control interest has the meaning given by section 352.
IP time means 7.30 p.m., by standard time in the Australian Capital Territory, on 12 April 1989.
law, in relation to a listed country or an unlisted country, means a law of that listed country or unlisted country, or of any part of, or place in, that listed country or unlisted country.
lease includes a sublease and, in relation to a company title interest in land, includes an agreement similar to a lease or sublease.
leased includes let on hire (including a letting on hire that is described in the relevant agreement as a lease) under an agreement other than a hire‑purchase agreement.
listed country has the meaning given by section 320.
net tainted commodity gains has the meaning given by section 443.
net tainted currency exchange gains has the meaning given by section 444.
non‑attributable income period, in relation to a taxpayer in relation to a company in relation to the application of a provision of this Act in accordance with Division 7, means a statutory accounting period of the company for which:
(a) there is no requirement to calculate under Division 7 the attributable income of the company in relation to the taxpayer; or
(b) there is a requirement to calculate under Division 7 the attributable income of the company in relation to the taxpayer, but the particular provision is not relevant to that calculation.
non‑discretionary trust means a trust other than a discretionary trust.
non‑portfolio dividend means a dividend (other than an eligible finance share dividend or a widely distributed finance share dividend) paid to a company where that company has a voting interest, within the meaning of section 334A, amounting to at least 10% of the voting power, within the meaning of that section, in the company paying the dividend.
non‑resident family trust has the meaning given by section 328.
non‑share forward contract means a forward contract that is not in respect of shares or a share price index.
non‑share futures contract means a futures contract that is not in respect of shares or a share price index.
notional allowable deduction has the meaning given by subsection 382(2).
notional assessable income has the meaning given by subsection 382(2).
notional exempt income has the meaning given by subsection 382(2).
Part X Australian resident means a resident within the meaning of section 6, but does not include an entity where:
(a) there is a double tax agreement in force in respect of a foreign country; and
(b) that agreement contains a provision that is expressed to apply where, apart from the provision, the entity would, for the purposes of the agreement, be both a resident of Australia and a resident of the foreign country; and
(c) that provision has the effect that the entity is, for the purposes of the agreement, a resident solely of the foreign country.
passive income has the meaning given by section 446.
premium income means:
(a) premiums in respect of insurance or reinsurance; or
(b) life assurance premiums.
profits includes gains, whether of an income or capital nature.
property management services includes any of the following services:
(a) cleaning;
(b) secretarial;
(c) catering.
provide, in relation to services, includes allow, confer, give, grant or perform.
public unit trust has the meaning given by section 329.
recognised accounts:
(a) in relation to a company, in relation to a statutory accounting period, means the accounts referred to in subparagraph 432(1)(c) that are prepared by the company for the statutory accounting period; or
(b) in relation to a partnership in which a company is a partner at any time during a statutory accounting period, means the accounts referred to in paragraph 437(1)(b) that are prepared by the partnership for the statutory accounting period.
rent means any consideration (in this definition called a rental consideration) paid or given by a lessee under a lease and includes consideration (whether paid or given by a lessee or another person) in the nature of a rental consideration.
residency assumption, in relation to a CFC, means the assumption about the residence of the CFC that is made in paragraph 383(a).
retention period, in relation to a statutory accounting period, means the period of 5 years commencing at the end of the statutory accounting period.
sale, in relation to goods, includes exchange or hire‑purchase and purchase, when used in relation to goods, has a corresponding meaning.
services includes any benefit, right (including a right in relation to, and an interest in, real or personal property), privilege or facility and, without limiting the generality of the foregoing, includes a right, benefit, privilege, service or facility that is, or is to be, provided under:
(a) an arrangement for or in relation to:
(i) the performance of work (including work of a professional nature), whether with or without the provision of property; or
(ii) the provision of, or of the use of facilities for, entertainment, recreation or instruction; or
(iii) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; or
(b) a contract of insurance; or
(c) an arrangement for or in relation to the lending of money.
ship means a vessel or boat of any description, and includes:
(a) an air‑cushion vehicle; and
(b) any floating structure.
special excluded rental income, in relation to a company, in relation to a statutory accounting period, means income derived by the company in the statutory accounting period by way of rent, where:
(a) the income was derived by the company from a CFC; and
(b) at all times during the statutory accounting period when the income accrued:
(i) the CFC was an associate of the company; and
(ii) the company was a resident of a particular listed country or a particular unlisted country; and
(iii) the CFC was also a resident of that listed country or that unlisted country, as the case may be; and
(c) the income was taxed in that listed country or that unlisted country, as the case may be, at the country’s normal company tax rate (see section 325); and
(d) the income would not have been, in whole or in part, a notional allowable deduction of the CFC if it were assumed that the CFC had failed to pass the active income test in relation to any statutory accounting period of the CFC.
statutory accounting period has the meaning given by section 319.
subject to tax has the meaning given by section 324.
tainted asset, in relation to a company, means:
(a) any of the following:
(i) loans (including deposits with a bank or other financial institution);
(ii) debenture stock, bonds, debentures, certificates of entitlement, bills of exchange, promissory notes or other securities;
(iii) shares in a company;
(iv) an interest in a trust or partnership;
(v) futures contracts;
(vi) forward contracts;
(vii) interest rate swap contracts;
(viii) currency swap contracts;
(ix) forward exchange rate contracts;
(x) forward interest rate contracts;
(xi) life assurance policies;
(xii) a right or option in respect of such a loan, security, share, interest, contract or policy;
(xiii) any similar financial instrument; or
(b) an asset that was held by the company solely or principally for the purpose of deriving tainted rental income; or
(c) an asset other than:
(i) trading stock; or
(ii) any other asset used solely in carrying on a business;
but does not include a commodity investment.
tainted commodity gain, in relation to a company, in relation to a statutory accounting period, means:
(a) a gain realised by the company in the statutory accounting period from disposing of a tainted commodity investment; or
(b) a capital gain that the company would have made in the statutory accounting period because CGT event J1 would have happened in relation to a tainted commodity investment, if the assumptions in paragraphs 383(a) to (c) applied.
Note: Basically, the effect of those assumptions is that the company concerned is taken to be a taxpayer and a resident and CGT event J1 may therefore be taken to have happened.
tainted commodity investment, in relation to a company, means:
(a) either of the following contracts:
(i) a forward contract in respect of a commodity;
(ii) a futures contract in respect of a commodity; or
(b) a right or option in respect of such a contract;
except where either of the following conditions is satisfied:
(c) both of the following subparagraphs apply:
(i) the company carries on:
(A) a business of producing or processing the commodity; or
(B) a business that involves the use of the commodity as a raw material in a production process;
(ii) the contract, right or option relates to the carrying on of that business;
(d) both of the following subparagraphs apply in relation to the contract:
(i) the contract was entered into by the company for the sole purpose of eliminating or reducing the risk of adverse financial consequences that might result for the company, under another contract, from fluctuations in the price of the commodity;
(ii) the company does not and will not derive tainted sales income from a transaction under that other contract.
tainted commodity loss, in relation to a company, in relation to a statutory accounting period, means:
(a) a loss realised by the company in the statutory accounting period from disposing of a tainted commodity investment; or
(b) a capital loss that the company would have made in the statutory accounting period because CGT event J1 would have happened in relation to a tainted commodity investment, if the assumptions in paragraphs 383(a) to (c) applied.
Note: Basically, the effect of those assumptions is that the company concerned is taken to be a taxpayer and a resident and CGT event J1 may therefore be taken to have happened.
tainted currency exchange gain, in relation to a company, in relation to a statutory accounting period, means a currency exchange gain realised by the company in the statutory accounting period except where the gain related to an active income transaction (within the meaning of section 439).
tainted currency exchange loss, in relation to a company, in relation to a statutory accounting period, means a currency exchange loss realised by the company during the statutory accounting period except where the loss related to an active income transaction (within the meaning of section 439).
tainted income ratio has the meaning given by section 433.
tainted interest income, in relation to a company, means:
(a) interest or a payment in the nature of interest; or
(b) an amount that, if the company were a resident within the meaning of section 6, would be included in assessable income under Division 16E of Part III (or would be so included if Division 230 of the Income Tax Assessment Act 1997 did not apply); or