(7) A reference in this section to the period specified in the taxpayer’s notice is a reference to the period as extended under subsection (4).
(8) A refusal or failure to comply with the taxpayer’s notice is not an offence.
(9) Subsection 262A(4) does not apply to records kept or obtained under or for the purposes of this section.
452 Active income test—substantiation requirements for partnership
(1) The substantiation requirements for a partnership in relation to a statutory accounting period are as follows:
(a) the partnership must keep (in Australia or elsewhere) such accounting records (in this section called the general accounting records) as correctly record and explain the matters, transactions, acts and operations that are relevant to the preparation of the recognised accounts of the partnership for the statutory accounting period;
(b) the general accounting records must be so kept as to enable the recognised accounts of the partnership for the statutory accounting period to be prepared;
(c) the partnership must retain, for the retention period in relation to the statutory accounting period:
(i) the recognised accounts of the partnership for the statutory accounting period; and
(ii) the general accounting records of the partnership for the statutory accounting period;
(d) the partnership must comply with a request made in a notice given to it under subsection (2) in relation to the statutory accounting period.
(2) A company that is a CFC at the end of a statutory accounting period of the company may, by notice in writing served on a partnership in which the company was a partner at any time during the statutory accounting period, request the partnership:
(a) to give to the company, within the period and in the manner specified in the notice, copies of such of the following documents as are specified in the notice:
(i) the recognised accounts of the partnership for the statutory accounting period;
(ii) the general accounting records of the partnership for the statutory accounting period; or
(b) to prepare a document containing particulars of the basis of the calculation of:
(i) the notional gross tainted turnover of the partnership for the statutory accounting period; and
(ii) the notional gross turnover of the partnership for the statutory accounting period;
and to give to the company, within the period and in the manner specified in the notice, a copy of that document.
(3) The period specified in the notice must end:
(a) later than 30 days after the date of service of the notice; and
(b) before the end of the retention period in relation to the statutory accounting period.
(4) Upon written application made by the company within the period specified in the notice, the Commissioner may, by notice in writing served on the company, extend the period specified in the notice.
(5) Where:
(a) an application under subsection (4) is made before the end of the period specified in the notice; and
(b) at the end of the period, the Commissioner has not notified the company of the Commissioner’s decision on the application;
the following provisions have effect:
(c) if the Commissioner’s decision is not notified to the company before the end of the retention period in relation to the statutory accounting period concerned—the Commissioner is taken to have extended the period under subsection (4) to the end of the retention period;
(d) if the Commissioner’s decision is notified to the company before the end of the retention period in relation to the statutory accounting period concerned—the Commissioner is taken to have extended the period under subsection (4) to the end of the day (in this subsection called the decision day) on which the Commissioner’s decision is notified to the company;
(e) if the Commissioner decides to extend the period—subject to subsection (6), the extended period must end after the decision day.
(6) The period as extended under subsection (4) must end before the end of the retention period in relation to the statutory accounting period.
(7) A reference in this section to the period specified in the notice is a reference to the period as extended under subsection (4).
(8) A refusal or failure to comply with the notice is not an offence.
(9) Subsection 262A(4) does not apply to records kept or obtained under or for the purposes of this section.
453 Active income test—substantiation requirements for attributable taxpayer
(1) Where:
(a) the Commissioner has reason to believe that:
(i) a taxpayer is an attributable taxpayer in relation to a company, being a CFC, at the end of a statutory accounting period of the CFC; and
(ii) the application of a provision of this Division to the company may be relevant to the assessment of the taxpayer; and
(b) any of the following subparagraphs applies:
(i) the taxpayer has claimed (whether in a return of income or otherwise) that the company has passed the active income test in relation to the statutory accounting period;
(ii) the taxpayer’s return of income of any year of income has been prepared on the basis that the company has passed the active income test in relation to the statutory accounting period;
(iii) the Commissioner has reason to believe that the company has passed the active income test in relation to the statutory accounting period;
the Commissioner may, by notice in writing served on the taxpayer (in this section called the Commissioner’s notice), request the taxpayer:
(c) to obtain from the company, in accordance with a request made in a notice given to the company under subsection 451(2), copies of such documents as are specified in the Commissioner’s notice; and
(d) if any of those copies are not in the English language—to make translations of those copies; and
(e) to produce to the Commissioner, within the period and in the manner specified in the Commissioner’s notice:
(i) in all cases—those copies; and
(ii) if paragraph (d) applies—those translations.
(2) The period specified in the Commissioner’s notice must end:
(a) later than 90 days after the date of service of the notice; and
(b) before the end of the retention period in relation to the statutory accounting period.
(3) Upon written application made by the taxpayer within the period specified in the Commissioner’s notice, the Commissioner may, by notice in writing served on the taxpayer, extend the period specified in the Commissioner’s notice.
(4) Where:
(a) an application under subsection (3) is made before the end of the period specified in the Commissioner’s notice; and
(b) at the end of the period, the Commissioner has not notified the taxpayer of the Commissioner’s decision on the application;
the following provisions have effect:
(c) if the Commissioner’s decision is not notified to the taxpayer before the end of the retention period in relation to the statutory accounting period concerned—the Commissioner is taken to have extended the period under subsection (3) to the end of the retention period;
(d) if the Commissioner’s decision is notified to the taxpayer before the end of the retention period in relation to the statutory accounting period concerned—the Commissioner is taken to have extended the period under subsection (3) to the end of the day (in this subsection called the decision day) on which the Commissioner’s decision is notified to the taxpayer;
(e) if the Commissioner decides to extend the period—subject to subsection (5), the extended period must end after the decision day.
(5) The period as extended under subsection (3) must end before the end of the retention period in relation to the statutory accounting period.
(6) A reference in this section to the period specified in the Commissioner’s notice is a reference to the period as extended under subsection (3).
(7) A refusal or failure to comply with the notice is not an offence.
(8) If the taxpayer refuses or fails to comply with the notice, then, for the purposes of the application of this Part (other than this Division) to the taxpayer, the company is taken not to have passed the active income test in relation to the statutory accounting period concerned.
454 Assessment on assumption—retention of accounts etc. and compliance with information notices
If:
(a) a statutory accounting period of a company has ended; and
(b) the retention period in relation to the statutory accounting period has not ended;
an assessment may be made of a taxpayer on the assumption that, after the assessment is made, the following requirements will be complied with in relation to the statutory accounting period:
(c) the requirements set out in paragraphs 451(1)(c) and (d) that are applicable to the company;
(d) the requirements set out in paragraphs 452(1)(c) and (d) that are applicable to a partnership in which the company was a partner at any time during the statutory accounting period.
455 Amendment of assessments
Where:
(a) an assessment has been made in relation to a year of income; and
(b) a provision of this Subdivision that is relevant to the assessment is dependent on a circumstance that occurs or may occur after the end of the year of income;
section 170 does not prevent the amendment of the assessment at any time for the purpose of giving effect to this Act in relation to the occurrence of that circumstance after the end of the year of income.
Division 9—Attribution of attributable income and other amounts
456 Assessability in respect of CFC’s attributable income
(1) Subject to subsection (2), where a CFC has attributable income for a statutory accounting period in respect of an attributable taxpayer, the taxpayer’s attribution percentage of the attributable income is included in the assessable income of the taxpayer of the year of income in which the end of the statutory accounting period occurs.
(2) Where section 457 applies in relation to the attributable taxpayer in relation to one or more changes of residence by the CFC during the statutory accounting period, then only so much of the attributable income of the CFC as relates to:
(a) where the CFC is a resident of an unlisted country at the end of the period:
(i) any part of the period when the CFC was a resident of a listed country; or
(ii) the part of the period, since the change of residence or last change of residence, as the case requires, when the CFC was a resident of the unlisted country; or
(b) where the CFC is a resident of a listed country at the end of the period—any part of the period when the CFC was a resident of the listed country or any other listed country;
is to be taken into account under subsection (1).
456A Reduction of section 456 assessability where item subject to foreign accruals tax
(1) Where:
(a) apart from this section, an amount (in this section called the otherwise assessable section 456 amount) is included in the assessable income of a year of income of an attributable taxpayer in relation to a CFC under section 456, in relation to the attributable income of the CFC of a statutory accounting period; and
(b) an attribution tracing interest of the attributable taxpayer, or of an interposed entity, in a CFE was taken into account in calculating the attributable taxpayer’s attribution percentage for the CFC; and
(c) foreign tax is payable by the CFE under an accruals tax law of a listed country in respect of an amount that is calculated by reference to an item of net income or net profit of the CFC, where the amount is taxed in the listed country:
(i) at that country’s normal company tax rate; and
(ii) in a tax accounting period commencing or ending:
(A) in the year of income of the attributable taxpayer; or
(B) in the statutory accounting period of the CFC; and
(d) the item constitutes the whole or part (which whole or part is in this section called the foreign accruals‑taxed attributable income) of the attributable income of the CFC of the statutory accounting period;
then the otherwise assessable section 456 amount is reduced by the amount calculated using the formula:
Start formula Indirect attribution interests via CFE times Foreign accruals-taxed attributable income end formula
where:
Indirect attribution interests via CFE means the total of the attributable taxpayer’s indirect attribution interests in the CFC that are held through the CFE.
Foreign accruals‑taxed attributable income means the amount of the foreign accruals‑taxed attributable income.
(2) Where:
(a) apart from this subsection, subsection (1) would reduce the otherwise assessable section 456 amount of the attributable taxpayer in relation to the CFC in a case where foreign tax is payable by 2 or more CFEs under accruals tax laws; and
(b) any indirect attribution interest referred to in the formula component Indirect attribution interests via CFE in subsection (1) is held through any 2 or more of the CFEs;
then that indirect attribution interest is only to be taken into account once in applying the subsection.
(3) Where, because of any of subsections 362(2) to (5), the amount that would otherwise be the attribution percentage of the attributable taxpayer for the CFC is reduced, then the Commissioner may, for the purposes of this section, make such consequential reduction as the Commissioner considers reasonable in the circumstances to any indirect attribution interest in the CFC held by the attributable taxpayer.
457 Assessability where CFC changes residence from unlisted country to listed country or to Australia
(1) Where at any time (in this section called the residence‑change time) a company that:
(a) is a CFC; and
(b) has an attributable taxpayer;
ceases to be resident in an unlisted country and becomes:
(c) a resident of a listed country; or
(d) a Part X Australian resident;
then the attributable taxpayer’s assessable income of the year of income in which the residence‑change time occurs includes the amount calculated under subsection (2).
(2) The amount is calculated using the formula:
Start formula Attribution percent times Adjusted distributable profits end formula
where:
Attribution percent means the attributable taxpayer’s attribution percentage, at the residence‑change time, in relation to the CFC.
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 income were its adjusted tainted income (excluding any non‑portfolio dividends) derived during the period beginning on the first day of the statutory accounting period in which the residence‑change time occurred and ending immediately before the time at which the residence‑change time occurs; and
(ii) the CFC’s only other income were an amount that the CFC would have derived had it disposed of all of its tainted assets immediately before the residence‑change time for a consideration equal to their market value; and
(iii) the CFC’s only expenses were expenses related to income covered by subparagraphs (i) and (ii); 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) derived during the period beginning on the first day of the statutory accounting period in which the residence‑change time occurred and ending immediately before the time at which the residence‑change time occurs; and
(ii) the CFC’s only expenses were expenses related to income covered by subparagraph (i).
(3) If:
(a) at the residence‑change time, regulations made for the purposes of section 320 come into effect; and
(b) a result of those regulations coming into effect is that the company:
(i) ceases to be a resident of an unlisted country; and
(ii) becomes a resident of a listed country;
at the residence‑change time;
then no amount is to be included in the attributable taxpayer’s assessable income under subsection (1) in relation to that change of residence.
459A Assessability where CFC or CFT has interest in certain attributable taxpayers
(1) Where:
(a) an amount (in this subsection called the section 456 to 459A amount) is included in the assessable income of an Australian partnership or of an Australian trust of a year of income under section 456 or 457 or under this section (apart from subsection (2)); and
(b) a CFC or CFT has an individual interest in the net income of the Australian partnership, or a present entitlement to a share of the net income of the Australian trust, being an interest or entitlement held either directly or indirectly through interposed Australian partnerships, CFPs or Australian trusts (or any combination thereof); and
(c) a taxpayer is an attributable taxpayer in relation to the CFC or CFT:
(i) where the section 456 to 459A amount is included in assessable income under section 456—at the end of the statutory accounting period referred to in that section; or
(ii) where the amount is included under section 457—at the residence‑change time referred to in that section; or
(v) where the amount is included under this section—at the time referred to in whichever subparagraph of this paragraph applied for the purposes of so including the amount;
then, subject to subsection (2), the assessable income of the attributable taxpayer of the year of income includes an amount calculated using the formula:
Start formula AP times Interest/Entitlement times Section 456 to 459A amount end formula
where:
AP [Attribution Percentage] means the taxpayer’s attribution percentage, at the time referred to in paragraph (c), for the CFC or CFT.
Interest/Entitlement means the percentage of the net income of the Australian partnership or Australian trust represented by the sum of the direct and indirect interests or present entitlements of the CFC or CFT.