(d) income (being interest, fees, commission or other amounts) derived by a person in respect of offshore banking transfers of the person; or
(e) income consisting of dividends or non‑share dividends paid to a person by a company out of profits derived from the making of offshore banking transfers.
tainted rental income (other than 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 in respect of any of the following:
(a) a lease to which an associate of the company was a party at the time the income was derived;
(b) a lease where any or all of the rent was paid or given by an associate of the company;
(c) a lease of land, except where the following conditions are satisfied:
(i) the land is situated in a listed country or in an unlisted country;
(ii) at all times during the period when the income accrued, the company was a resident of that country;
(d) a lease of land where the following conditions are satisfied:
(i) the land is situated in a listed country or in an unlisted country;
(ii) at all times during the period when the income accrued, the company was a resident of that country;
(iii) it is not the case that a substantial part of the income is attributable to the provision of labour‑intensive property management services in connection with the land, being services provided by directors or employees of the company;
(e) a lease of either of the following:
(i) a ship;
(ii) an aircraft;
except where a substantial part of the income is attributable to the provision by the directors or employees of the company of any of the following in relation to the ship or aircraft concerned:
(iii) operating crew services;
(iv) maintenance services;
(v) management services;
(f) a lease of either of the following:
(i) a cargo container designed or intended for use on ships or aircraft as part of a containerised cargo handling system;
(ii) plant or equipment designed or intended for use on board ships;
except where a substantial part of the income is attributable to the provision by the directors or employees of the company of either of the following in relation to the container, plant or equipment concerned:
(iii) maintenance services;
(iv) management services.
tainted royalty income, in relation to a company, means royalties derived by the company except where all of the following conditions are satisfied:
(a) the royalties are derived in the course of a business carried on by the company;
(b) at the time the royalties were derived, the entity liable to pay the royalties was not an associate of the company;
(c) either of the following subparagraphs applies:
(i) the matter or thing in respect of which the royalty is consideration originated with the company;
(ii) the company has substantially developed, altered or improved that matter or thing with the result that its market value was substantially enhanced.
tainted sales income has the meaning given by section 447.
tainted services income has the meaning given by section 448.
tax accounting period, in relation to an entity, in relation to a foreign tax imposed by a tax law of a listed country, means the accounting period used by the entity for the purposes of determining the tax base under that law.
tax detriment has the meaning given by section 330.
tax law, in relation to a listed country or an unlisted country, means:
(a) if the listed country or the unlisted country has federal foreign tax and either or both of the following:
(i) State foreign tax;
(ii) municipal foreign tax;
the law of the listed country or the unlisted country that imposes the federal foreign tax; or
(b) in any other case—the law of the listed country or the unlisted country that imposes foreign tax.
transitional finance share has the meaning given by section 327B.
transitional finance share dividend means a dividend in respect of a transitional finance share.
trust means:
(a) an entity in the capacity of trustee (including an entity that manages a trust if there is no trustee); or
(b) as the case requires, a trust or trust estate.
unlisted country has the meaning given by section 320.
widely distributed finance share has the meaning given by section 327A.
widely distributed finance share dividend means a dividend in respect of a widely distributed finance share.
(2) Where, if all offshore borrowings made by persons when they were offshore banking units were taken to be tax exempt loan money of the persons for the purposes of Division 11A of Part III, an offshore loan, or other transfer, of an amount by a person would, for the purposes of that Division, be an offshore loan, or other transfer, of tax exempt loan money of the person, the offshore loan, or other transfer, of the amount is an offshore banking transfer of the person for the purposes of the definition of tainted interest income.
318 Associates
(1) For the purposes of this Part, the following are associates of an entity (in this subsection called the primary entity) that is a natural person (otherwise than in the capacity of trustee):
(a) a relative of the primary entity;
(b) a partner of the primary entity or a partnership in which the primary entity is a partner;
(c) if a partner of the primary entity is a natural person otherwise than in the capacity of trustee—the spouse or a child of that partner;
(d) a trustee of a trust where the primary entity, or another entity that is an associate of the primary entity because of another paragraph of this subsection, benefits under the trust;
(e) a company where:
(i) the company is sufficiently influenced by:
(A) the primary entity; or
(B) another entity that is an associate of the primary entity because of another paragraph of this subsection; or
(C) another company that is an associate of the primary entity because of another application of this paragraph; or
(D) 2 or more entities covered by the preceding sub‑subparagraphs; or
(ii) a majority voting interest in the company is held by:
(A) the primary entity; or
(B) the entities that are associates of the primary entity because of subparagraph (i) of this paragraph and the preceding paragraphs of this subsection; or
(C) the primary entity and the entities that are associates of the primary entity because of subparagraph (i) of this paragraph and because of the preceding paragraphs of this subsection.
(2) For the purposes of this Part, the following are associates of a company (in this subsection called the primary entity):
(a) a partner of the primary entity or a partnership in which the primary entity is a partner;
(b) if a partner of the primary entity is a natural person otherwise than in the capacity of trustee—the spouse or a child of that partner;
(c) a trustee of a trust where the primary entity, or another entity that is an associate of the primary entity because of another paragraph of this subsection, benefits under the trust;
(d) another entity (in this paragraph called the controlling entity) where:
(i) the primary entity is sufficiently influenced by:
(A) the controlling entity; or
(B) the controlling entity and another entity or entities; or
(ii) a majority voting interest in the primary entity is held by:
(A) the controlling entity; or
(B) the controlling entity and the entities that, if the controlling entity were the primary entity, would be associates of the controlling entity because of subsection (1), because of subparagraph (i) of this paragraph, because of another paragraph of this subsection or because of subsection (3);
(e) another company (in this paragraph called the controlled company) where:
(i) the controlled company is sufficiently influenced by:
(A) the primary entity; or
(B) another entity that is an associate of the primary entity because of another paragraph of this subsection; or
(C) a company that is an associate of the primary entity because of another application of this paragraph; or
(D) 2 or more entities covered by the preceding sub‑subparagraphs; or
(ii) a majority voting interest in the controlled company is held by:
(A) the primary entity; or
(B) the entities that are associates of the primary entity because of subparagraph (i) of this paragraph and the other paragraphs of this subsection; or
(C) the primary entity and the entities that are associates of the primary entity because of subparagraph (i) of this paragraph and the other paragraphs of this subsection;
(f) any other entity that, if a third entity that is an associate of the primary entity because of paragraph (d) of this subsection were the primary entity, would be an associate of that third entity because of subsection (1), because of another paragraph of this subsection or because of subsection (3).
(3) For the purposes of this Part, the following are associates of a trustee (in this subsection called the primary entity):
(a) any entity that benefits under the trust;
(b) if a natural person benefits under the trust—any entity that, if the natural person were the primary entity, would be an associate of that natural person because of subsection (1) or because of this subsection;
(c) if a company is an associate of the primary entity because of paragraph (a) or (b) of this subsection—any entity that, if the company were the primary entity, would be an associate of the company because of subsection (2) or because of this subsection.
(4) For the purposes of this Part, the following are associates of a partnership (in this subsection called the primary entity):
(a) a partner in the partnership;
(b) if a partner in the partnership is a natural person—any entity that, if that natural person were the primary entity, would be an associate of that natural person because of subsection (1) or (3);
(c) if a partner in the partnership is a company—any entity that, if the company were the primary entity, would be an associate of the company because of subsection (2) or (3).
(5) In determining, for the purposes of this section, whether an entity is an associate of another entity at a particular time (in this subsection called the test time):
(a) an entity (in this subsection called the public unit trust entity) that, apart from this subsection, is the trustee of a public unit trust at the test time is to be treated as if it were a company instead of a trustee; and
(b) the public unit trust entity is taken to be sufficiently influenced by another entity or other entities if the public unit trust entity is accustomed or under an obligation (whether formal or informal), or might reasonably be expected, to act in accordance with the directions, instructions or wishes of the other entity or other entities (whether those directions, instructions or wishes are, or might reasonably be expected to be, communicated directly or through interposed companies, partnerships or trusts); and
(c) another entity or other entities are taken to hold a majority voting interest in the public unit trust entity if either of the following percentages is not less than 50%:
(i) the percentage of the income of the trust represented by the share of the income to which the other entity or other entities are entitled, or that the other entity or other entities are entitled to acquire;
(ii) the percentage of the corpus of the trust represented by the share of the corpus to which the other entity or other entities are entitled, or that the other entity or other entities are entitled to acquire.
(6) For the purposes of this section:
(a) a reference to an entity benefiting under a trust is a reference to the entity benefiting, or being capable (whether by the exercise of a power of appointment or otherwise) of benefiting, under the trust, either directly or through any interposed companies, partnerships or trusts; and
(b) a company is sufficiently influenced by an entity or entities if the company, or its directors, are accustomed or under an obligation (whether formal or informal), or might reasonably be expected, to act in accordance with the directions, instructions or wishes of the entity or entities (whether those directions, instructions or wishes are, or might reasonably be expected to be, communicated directly or through interposed companies, partnerships or trusts); and
(c) an entity or entities hold a majority voting interest in a company if the entity or entities are in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the company.
(7) In this section and any other provision of this Act that has effect for the purposes of this section, a reference to the spouse of a person does not include:
(a) a spouse who is legally married to the person but living separately and apart from the person on a permanent basis; or
(b) a spouse within the meaning of paragraph (a) of the definition of spouse in subsection 995‑1(1) of the Income Tax Assessment Act 1997 who is living separately and apart from the person on a permanent basis.
319 Statutory accounting period of a company
(1) Subject to this section, each period of 12 months finishing at the end of 30 June is a statutory accounting period of a company.
(2) A company may, by notice in writing to the Commissioner, elect that a day (in this section called the new day) is to be the last day of its statutory accounting period instead of the day (in this section called the old day) that would otherwise apply under this section.
(3) The new day must be:
(a) if:
(i) the company has not previously given a notice under this section; and
(ii) the company regularly uses:
(A) an accounting period of 12 months finishing at the end of a day other than 30 June for the purposes of complying with the requirements of a tax law of any country; or
(B) an accounting period of 12 months finishing at the end of a day other than 30 June for the purposes of reporting to its shareholders;
either of those days; or
(b) if the company has previously given a notice under this section—30 June or either of the days that, but for the giving of the notice, would be applicable under paragraph (a).
(4) Subject to any further application of subsection (2) and to subsections (4A) and (5):
(a) the first statutory accounting period using the new day is the period that begins immediately after the end of the statutory accounting period (using the old day) during which the election was made; and
(b) later statutory accounting periods are the successive periods of 12 months finishing at the end of the new day.
(4A) Subject to subsection (5), if:
(a) the election is made in the company’s statutory accounting period in which the company first became a CFC; and
(b) the new day occurs after the election is made but before the old day;
then, subject to any further application of subsection (2):
(c) that statutory accounting period finishes at the end of the new day; and
(d) later statutory accounting periods are the successive periods of 12 months finishing at the end of the new day.
(5) Where, when it makes the election, it is less than 12 months since the company was incorporated or otherwise established:
(a) the reference in subparagraph (3)(a)(ii) to the company regularly using an accounting period is instead a reference to the company proposing to use the accounting period; and
(b) subject to any further application of subsection (2):
(i) the first statutory accounting period of the company is the period beginning at the time of incorporation or establishment and ending at the end of the new day; and
(ii) later statutory accounting periods are the successive periods of 12 months finishing at the end of the new day.
(6) If:
(a) the company is a CFC at the beginning of what is, disregarding this subsection, a statutory accounting period; and
(b) the company ceases to exist before the end of the statutory accounting period;
the statutory accounting period ends immediately before the company ceases to exist.
(7) For the purposes of applying this section to a company, if:
(a) the company is a CFC at a particular time; and
(b) an entity is the only attributable taxpayer in relation to the company at that time; and
(c) the entity’s attribution percentage in relation to the company is 100% at that time;
then, instead of a notice being given under subsection (2) by the company at that time, the notice may be given at that time by the entity.
320 Listed countries and unlisted countries
(1) In this Part:
listed country means a foreign country, or a part of a foreign country, that is declared by the regulations to be a listed country for the purposes of this Part.
unlisted country means:
(a) a foreign country that does not (either in whole or in part) consist of a listed country or listed countries; or
(b) if one or more parts of a foreign country are listed countries—the remainder of that foreign country.
(2) Subject to this section, for the purposes of this section, if, apart from this section:
(a) a colony, overseas territory or protectorate of a foreign country; or
(b) an overseas territory for the international relations of which a foreign country is responsible;
is not a foreign country in its own right, the colony, territory or protectorate is taken to be a foreign country in its own right.
(3) Subject to subsection (4), for the purposes of this section, if, apart from this subsection and subsection (4), there are 2 or more foreign countries with a common income tax system, those countries are to be treated as the same country.