Division 2Controlled foreign companies

Start here

Get a plain-English read of Division 2

Turn the raw legal text into a practical explanation grounded in Income Tax Regulations 1936.

## Part 1—Preliminary #### 1 Name of regulations These Regulations are the Income Tax Regulations 1936. #### 2 Definitions In these Regulations: > Act means the Income Tax Assessment Act 1936. > ESS interest has the meaning given by subsection 83A‑10(1) of the Income Tax Assessment Act 1997. ## Part 3—Liability to taxation #### 6 Prescribed class of persons (Act, subsection 23AB(2)) For subsection 23AB(2) of the Act, members of the Australian Federal Police who are members of the force, created by the United Nations, for keeping peace in Cyprus are a prescribed class of persons. #### 7A Declaration of eligible duty For subsection 23AD(2) and subparagraph 23AD(3)(b)(iii) of the Act, duty with an organisation specified in an item of the following table is eligible duty if: (a) the duty is in an area specified in the item; and (b) the duty occurs: (i) after the day specified in column 3 of the item; and (ii) before the day (if any) specified in column 4 of the item. ```html <table cellspacing="0" cellpadding="0" style="margin-left:0.25pt; border-collapse:collapse"><thead><tr><td colspan="5" style="width:343.55pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Eligible duty</td></tr><tr><td style="width:20.45pt; border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"></td><td style="width:57.1pt; border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Column 1</td><td style="width:119.4pt; border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Column 2</td><td style="width:53.8pt; border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Column 3</td><td style="width:49.6pt; border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Column 4</td></tr><tr><td style="width:20.45pt; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Item</td><td style="width:57.1pt; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Organisation</td><td style="width:119.4pt; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Area</td><td style="width:53.8pt; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">After the day</td><td style="width:49.6pt; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Before the day</td></tr></thead><tbody><tr><td style="width:20.45pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">1</td><td style="width:57.1pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Australian Defence Force on Operation Accordion</td><td style="width:119.4pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">The land area, territorial waters, airspace and superjacent airspace of the following countries:(a) the Kingdom of Bahrain;(b) the State of Qatar;(c) the United Arab Emirates.</td><td style="width:53.8pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">30 June 2014</td><td style="width:49.6pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">1 July 2016</td></tr><tr><td style="width:20.45pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">2</td><td style="width:57.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Australian Defence Force on Operation Augury</td><td style="width:119.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">The land area, territorial waters, airspace and superjacent airspace of the Hashemite Kingdom of Jordan.</td><td style="width:53.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">3 July 2014</td><td style="width:49.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"></td></tr><tr><td style="width:20.45pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">3</td><td style="width:57.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Australian Defence Force on Operation Highroad</td><td style="width:119.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">The land area, territorial waters, airspace and superjacent airspace of Afghanistan.</td><td style="width:53.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">31 December 2014</td><td style="width:49.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">1 July 2016</td></tr><tr><td style="width:20.45pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">4</td><td style="width:57.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Australian Defence Force on Operation Manitou</td><td style="width:119.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">The sea (including adjacent ports and the area within a 10 kilometres radius of such ports) and superjacent airspace of:(a) the Arabian Sea north of latitude 11°00′00″S and west of longitude 68°00′00″E; and(b) the Gulf of Aden; and(c) the Gulf of Oman; and(d) the Persian Gulf; and(e) the Red Sea; and(f) the Strait of Hormuz.</td><td style="width:53.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">30 June 2014</td><td style="width:49.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">1 July 2016</td></tr><tr><td style="width:20.45pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">5</td><td style="width:57.1pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">Australian Defence Force on Operation Okra</td><td style="width:119.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">The following areas:(a) the land area, territorial waters, airspace and superjacent airspace of the following countries:(i) Albania;(ii) Bosnia and Herzegovina;(iii) Bulgaria;(iv) Croatia;(v) Cyprus;(vi) Czech Republic;(vii) Estonia;(viii) Hungary;(ix) Iraq;(x) Kuwait;(xi) Montenegro;(xii) Poland;(xiii) Romania(xiv) the Hashemite Kingdom of Jordan;(xv) the Kingdom of Bahrain;(xvi) the State of Qatar;(xvii) the United Arab Emirates;(b) the waters and superjacent airspace of the Persian Gulf.</td><td style="width:53.8pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">8 August 2014</td><td style="width:49.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">1 July 2016</td></tr><tr><td style="width:20.45pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">6</td><td style="width:57.1pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">United Nations—Assistance Mission in Afghanistan (Operation Palate II)</td><td style="width:119.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">The land area, territorial waters, airspace and superjacent airspace of Afghanistan.</td><td style="width:53.8pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">26 June 2005</td><td style="width:49.6pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top">1 January 2016</td></tr></tbody></table> ``` #### 9 Prescribed Life Tables—subsection 27H(4) of the Act For the purposes of the definition of life expectation factor in subsection 27H(4) of the Act, the following Australian Life Tables published by the Australian Government Actuary are prescribed: (a) for an annuity first commencing to be payable before 1 September 1988—the Australian Life Tables 1975–1977; (b) for an annuity first commencing to be payable on or after 1 September 1988 but before 1 May 1993—the Australian Life Tables 1980–1982; (c) for an annuity first commencing to be payable on or after 1 May 1993 but before 1 July 1993—the Australian Life Tables 1985–1987; (d) for an annuity first commencing to be payable on or after 1 July 1993—the Australian Life Tables that are most recently published before the year in which the annuity first commences to be payable. #### 12 Excluded car parking facilities (1) For the purposes of paragraph 51AGA(1)(e) of the Act, the provision of car parking facilities for a car during a period referred to in section 51AGA of the Act is taken to be excluded from that section if: (a) the facilities are provided to an employee who: (i) is entitled under the law of a State or Territory to the use of a disabled persons’ car parking space; and (ii) is the driver of, or is a passenger in, the car; and (b) a valid disabled persons’ car parking permit is displayed on the car. (2) In this regulation: > disabled persons’ car parking space means a car parking space: (a) in a public car parking area; and (b) designated for the exclusive use of disabled persons. > disabled persons’ car parking permit means a permit, label or other document: (a) issued by the appropriate authority in a State or Territory; and (b) authorising the parking of a car in a disabled persons’ car parking space. ## Part 4—Returns and assessments #### 20 Amendment of assessments for an income year For a provision of subsection 170(1) of the Act mentioned in an item of the table, the circumstances set out in the item are prescribed. > Note: If a circumstance in an item of the table exists, the Commissioner of Taxation may amend an assessment of the taxpayer within 4 years after the day on which the Commissioner gives notice of the assessment to the taxpayer, unless a longer amendment period applies to the taxpayer. | Item | Provision | Circumstance | | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | 1 | Paragraph (f) of item 1 of the table in subsection 170(1)Paragraph (e) of item 2 of the table in subsection 170(1)Paragraph (d) of item 3 of the table in subsection 170(1) | All of the following exist:(a) there has been a transaction involving associates (within the meaning of section 318 of the Act), that has income tax consequences, in the year of income mentioned in the item;(b) the parties were not dealing with each other at arm’s length in relation to the transaction;(c) the period during which the Commissioner may amend an assessment in relation to one of the parties is at least 4 years. | | 2 | Paragraph (f) of item 1 of the table in subsection 170(1)Paragraph (e) of item 2 of the table in subsection 170(1)Paragraph (d) of item 3 of the table in subsection 170(1) | All of the following exist:(a) a private company is taken to have paid a dividend to an entity, as described in section 109C, 109D, 109E or 109F of the Act, in the year of income mentioned in the item;(b) the entity is:(i) a shareholder of the company; or(ii) an associate of a shareholder of the company; or(iii) a former shareholder of the company; or(iv) an associate of a former shareholder of the company;(c) the period during which the Commissioner may amend an assessment in relation to the company is at least 4 years. | | 3 | Paragraph (f) of item 1 of the table in subsection 170(1)Paragraph (d) of item 3 of the table in subsection 170(1) | All of the following exist:(a) the effect of section 109XB of the Act is that an amount is included as a dividend in the assessable income of a taxpayer as described in subsection 109XA(1), (2) or (3) of the Act in the year of income mentioned in the item;(b) the matter involves a taxpayer who is:(i) a shareholder of a company; or(ii) an associate of a shareholder of a company;(c) the period during which the Commissioner may amend an assessment in relation to both the trust and the company is at least 4 years. | | 4 | Paragraph (f) of item 1 of the table in subsection 170(1)Paragraph (e) of item 2 of the table in subsection 170(1)Paragraph (d) of item 3 of the table in subsection 170(1) | All of the following exist in the year of income mentioned in the item:(a) a taxpayer has acquired an ESS interest;(b) subsection 83A‑35(5) of the Income Tax Assessment Act 1997 (integrity rule about share trading and investment companies) did not apply to the ESS interest;(c) the entity that provided the ESS interest to the taxpayer is not a small business entity in relation to which item 2 or 3 of the table in subsection 170(1) of the Act applies. | | 5 | Paragraph (f) of item 1 of the table in subsection 170(1)Paragraph (e) of item 2 of the table in subsection 170(1)Paragraph (d) of item 3 of the table in subsection 170(1) | Both of the following exist in the year of income mentioned in the item:(a) the taxpayer has not identified income (ordinary or statutory) from one or more foreign transactions for the purposes of, or in the course of, an assessment;(b) the income has not been received from a resident investment vehicle within the meaning of the Income Tax Assessment Act 1997. | | 6 | Paragraph (f) of item 1 of the table in subsection 170(1)Paragraph (e) of item 2 of the table in subsection 170(1)Paragraph (d) of item 3 of the table in subsection 170(1) | Both of the following exist in the year of income mentioned in the item:(a) subsection 345(5) of the Act (transfer under a scheme) may be applicable to the taxpayer;(b) not all of the relevant information regarding the application of that subsection can be obtained from a resident investment vehicle within the meaning of the Income Tax Assessment Act 1997. | | 7 | Paragraph (f) of item 1 of the table in subsection 170(1) | Both of the following exist in the year of income mentioned in the item:(a) paragraph 448(1A)(f) of the Act (provision of services under a scheme) may be applicable to the taxpayer; | | | Paragraph (e) of item 2 of the table in subsection 170(1)Paragraph (d) of item 3 of the table in subsection 170(1) | (b) not all of the relevant information regarding the application of that paragraph can be obtained from a resident investment vehicle within the meaning of the Income Tax Assessment Act 1997. | | 8 | Paragraph (f) of item 1 of the table in subsection 170(1)Paragraph (e) of item 2 of the table in subsection 170(1)Paragraph (d) of item 3 of the table in subsection 170(1) | Any of the following provisions applies in relation to the taxpayer in the year of income mentioned in the item:(a) section 45A of the Act (streaming of dividends and capital benefits);(b) section 45B of the Act (schemes to provide certain benefits);(c) subsection 102AE(7) of the Act (excluded income for minors);(d) section 177E of the Act (stripping of company profits);(e) section 177EA of the Act (franking debit creation and franking credit cancellation schemes);(f) Division 270 of Schedule 2F to the Act (scheme to take advantage of deductions); | | | | (g) subsection 26‑50(7) of the Income Tax Assessment Act 1997 (expenses for a leisure facility or boat);(h) any of sections 165‑180 to 165‑205 (rules affecting the operation of tests for changing ownership of a company), and Division 175 (use of a company’s tax losses or deductions to avoid income tax), of the Income Tax Assessment Act 1997;(i) Subdivision 207‑F of the Income Tax Assessment Act 1997 (cancellation of gross‑up or tax offset where the imputation system has been manipulated). | | 9 | Paragraph (f) of item 1 of the table in subsection 170(1) | The making of an election under paragraph 96‑7(1)(a) or (b) in Schedule 1 to the Taxation Administration Act 1953 in relation to an excess non‑concessional contributions determination for a financial year that corresponds to the year of income mentioned in the item. | ## Part 8—Rebate for low income aged persons and pensioners and rebate in respect of certain benefits ### Division 1—General #### 148 Interpretation In this Part: > lowest marginal tax rate, in relation to a year of income, means the rate that is: (a) the lowest rate specified in the table in Part 1 of Schedule 7 to the Income Tax Rates Act 1986, in the application of the table to that year of income; and (b) expressed as a decimal fraction. > rebatable benefit has the same meaning as in subsection 160AAA(1) of the Act. > tax‑free threshold, in relation to a year of income, has the meaning given by subsection 3(1) of the Income Tax Rates Act 1986. #### 149 Amount of rebate of tax (1) For sections 160AAAA and 160AAAB of the Act, the amount of an entitlement to a rebate of tax is ascertained in accordance with Division 1A of this Part. (2) For section 160AAA of the Act, the amount of an entitlement to a rebate of tax is ascertained in accordance with Division 3 of this Part. ### Division 1A—Rebate under sections 160AAAA and 160AAAB of the Act #### 150AA Definitions In this Division: > rebate threshold has the meaning given by subregulations 150AB(3) and (3A). > relevant income‑recipient means the beneficiary of a trust, if the trustee in relation to the trust: (a) is the taxpayer; and (b) is liable to be assessed under section 98 of the Act in respect of the beneficiary’s share of the net income of the trust estate. #### 150AB Eligibility—amount of rebate income (1) For subsection 160AAAA(3) or 160AAAB(3) of the Act, the amount mentioned is: ![](image.002.png) (2) A taxpayer’s rebate amount for a year of income is the amount in the relevant item in the following table: | Item | Class of person | Rebate amount | | ---- | ------------------------------------- | ------------- | | 1 | Single person | $2 230 | | 2 | Member of a couple | $1 602 | | 3 | Member of an illness‑separated couple | $2 040 | (2B) If, in a year of income, more than one item in the table in subregulation (2) applies to a taxpayer, the taxpayer’s rebate amount is the amount that gives the taxpayer the greatest rebate entitlement. (3) If subregulation (3A) does not apply, a taxpayer’s rebate threshold for a year of income is the amount calculated using the formula: ![](image.003.png) where: > D is the tax‑free threshold. > E is the maximum amount of rebate allowable under section 159N of the Act. > F is the taxpayer’s rebate amount for the year of income. > Note: The rebate amount is worked out in accordance with subregulations (2) and (2B), but may then be affected by regulation 150AE or 150AF. > C is the lowest marginal tax rate. > Note: For lowest marginal tax rate and tax‑free threshold—see regulation 148. (3A) If the taxpayer’s rebate threshold, if it were calculated using the formula in subregulation (3), would be an amount that is greater than the amount at which the rebate of tax under section 159N of the Act is reduced, the taxpayer’s rebate threshold for a year of income is the amount calculated using the formula: ![](image.004.png) where: > C is the lowest marginal tax rate. > D is the tax‑free threshold. > E is the maximum amount of rebate allowable under section 159N of the Act. > F is the taxpayer’s rebate amount for the year of income. > Note: The rebate amount is worked out in accordance with subregulations (2) and (2B), but may then be affected by regulation 150AE or 150AF. > G is the amount at which the rebate of tax under section 159N of the Act is reduced. > H is the rate at which the rebate of tax under subsection 159N(2) of the Act is reduced, expressed as a decimal fraction. > I is the second lowest marginal tax rate, expressed as a decimal fraction. > Note: For lowest marginal tax rate and tax‑free threshold—see regulation 148. (4) If an amount worked out under subregulation (1), (2), (3) or (3A) is not an amount of whole dollars, the amount must be rounded up to the nearest whole dollar. (5) In this regulation: > illness separated couple has the same meaning as in subsection 4(7) of the Social Security Act 1991. > member of a couple has the same meaning as in: (a) the Social Security Act 1991; or (b) the Veteran’s Entitlements Act 1986. > single person means a person who, at any time in the year of income, is not the spouse of another person. #### 150AD Rebate for low income aged persons and pensioners Subject to regulations 150AE and 150AF, a taxpayer who, under section 160AAAA or 160AAAB of the Act, is eligible, in a year of income, for a rebate of tax is entitled, in respect of income, or trust income, of the year of income, to a rebate of tax amounting to: (a) if the relevant income‑recipient’s rebate income of the year of income does not exceed his or her rebate threshold—the taxpayer’s rebate amount; or (b) if the relevant income‑recipient’s rebate income of the year of income exceeds his or her rebate threshold—the taxpayer’s rebate amount, reduced by 12.5 cents for each $1 of the amount of the excess. #### 150AE Transfer of unused rebate from taxpayer other than trustee (1) Regulation 150AD is affected by subregulation (2) if, in relation to a year of income: (a) a taxpayer (TP1) is entitled to a rebate of tax under section 160AAAA of the Act; and (aa) a person (TP2) who is, at any time in that year of income, TP1’s spouse, is entitled to a rebate of tax under section 160AAAA of the Act; and (b) TP1’s rebate amount for the year of income, worked out under this regulation, exceeds the tax payable by TP1 in respect of income of that year (disregarding any credits or rebates); and (c) the amount of the rebate to which, apart from this subregulation, TP2 is entitled under section 160AAAA of the Act for the year of income is less than TP2’s rebate amount for that year. (2) In the circumstances mentioned in subregulation (1): (a) TP1’s rebate amount for the year of income is the amount ascertained under subregulation 150AB(2) reduced by the amount of the excess rebate amount mentioned in paragraph (1)(b); and (b) TP2’s rebate amount for the year of income is the amount ascertained under subregulation 150AB(2) increased by the amount of excess rebate ascertained under subregulation (11). (3) Regulation 150AD is affected by subregulation (4) if, in relation to a year of income: (a) a taxpayer (TP1) is, under section 160AAAA of the Act, entitled to a rebate of tax; and (b) TP1 is, at any time in that year of income, the spouse of a person who is a relevant income‑recipient in relation to a taxpayer (TP2) who is entitled under section 160AAAB to a rebate of tax; and (c) TP1’s rebate amount for the year of income worked out under this regulation exceeds the tax payable by TP1 in respect of income of that year (disregarding any credits or rebates); and (d) the amount of the rebate to which, apart from this subregulation, TP2 is entitled under section 160AAAB for the year of income in relation to TP1’s spouse is less than TP2’s rebate amount for that year in relation to TP1’s spouse. (4) In the circumstances mentioned in subregulation (3), the rebate amount for the year of income is: (a) for TP1—the amount ascertained under subregulation 150AB(2) or 151(3) reduced by the amount of the excess rebate amount mentioned in paragraph (3)(c); and (b) for TP2—the amount ascertained under subregulation 150AB(2) increased by the amount of the excess rebate amount ascertained under subregulation (11). (7) This regulation applies whether TP1 is, or is not, the same person as TP2. (8) For this regulation, if: (a) TP1 received, at any time in the year of income, a pension under: (i) Part 2.3, 2.4 or 2.5 of the Social Security Act 1991; or (ii) Division 4 or 5 of Part III of the Veterans’ Entitlements Act 1986; and (b) the pension payments were exempt payments under Subdivision 52‑A or 52‑B of the Income Tax Assessment Act 1997; the amount of TP1’s assessable income of that year is to be calculated as if that pension were assessable income. (11) In the circumstances mentioned in paragraphs (2)(b) and (4)(b), if TP1’s taxable income for the year is $6 000 or less, the amount of excess rebate is the excess rebate amount mentioned in paragraph (1)(b). (12) In the circumstances mentioned in paragraphs (2)(b) and (4)(b), if TP1’s taxable income for the year is greater than $6 000, and each rate of tax payable by TP1 is a rate set out in Part I of Schedule 7 to the Income Tax Rates Act 1986: (a) the amount of excess rebate is calculated using the formula: ![](image.005.png) where: A is TP1’s rebate amount for the year of income, worked out under this regulation. B is TP1’s taxable income for the year; but (b) if the amount calculated in paragraph (a) is less than zero, the amount of excess rebate is zero. (13) In the circumstances mentioned in paragraphs (2)(b) and (4)(b), if TP1’s taxable income for the year is greater than $6 000, and each rate of tax payable by TP1 is a rate set out in Part II of Schedule 7 to the Income Tax Rates Act 1986, the amount of excess rebate is the excess rebate amount mentioned in paragraph (1)(b). #### 150AF Transfer of unused rebate from taxpayer who is trustee (1) Regulation 150AD is affected by subregulation (2) if, in relation to a year of income: (a) a taxpayer (TP1) is entitled to a rebate under section 160AAAB of the Act; and (b) the relevant income‑recipient in relation to that rebate is, at any time in that year of income, the spouse of a taxpayer (TP2) who is entitled to a rebate of tax under section 160AAAA of the Act; and (c) TP1’s rebate amount in relation to the relevant income‑ recipient mentioned in paragraph (b) exceeds the tax payable by TP1 in relation to that relevant income‑ recipient for income of that year (disregarding any credits or rebates); and (d) the amount of the rebate to which, apart from this subregulation, TP2 is entitled under section 160AAAA of the Act for the year of income is less than TP2’s rebate amount for that year. (2) In the circumstances mentioned in subregulation (1), the rebate amount for the year of income is: (a) for TP1—the amount ascertained under subregulation 150AB(2) reduced by the amount of the excess rebate amount mentioned in paragraph (1)(c); and (b) for TP2—the amount ascertained under subregulation 150AB(2) increased by the amount of the excess rebate amount ascertained under subregulation (8) or (9). (3) Regulation 150AD is affected by subregulation (4) if, in relation to a year of income: (a) a taxpayer (TP1) is entitled to a rebate under section 160AAAB of the Act; and (b) the relevant income‑recipient in relation to TP1 (RIR1) is, at any time in that year of income, the spouse of a person (RIR2) who is the relevant income‑recipient in relation to a taxpayer (TP2) who is entitled to a rebate of tax under section 160AAAB of the Act; and (c) TP1’s rebate amount in relation to RIR1 exceeds the tax payable by TP1 in relation to RIR1 for income of that year (disregarding any credits or rebates); and (d) the amount of the rebate to which, apart from this subregulation, TP2 is entitled under section 160AAAB of the Act for the year of income in relation to RIR2 is less than TP2’s rebate amount for that year in relation to RIR2. (4) In the circumstances mentioned in subregulation (3), the rebate amount for the year of income: (a) for TP1—is the amount ascertained under subregulation 150AB(2) reduced by the amount of the excess rebate amount mentioned in paragraph (3)(c); and (b) for TP2—is the amount ascertained under subregulation 150AB(2) increased by the amount of the excess rebate amount ascertained under subregulation (8) or (9). (7) This regulation applies whether TP1 is, or is not, the same person as TP2. (7A) For this regulation, if: (a) TP1 received, at any time in the year of income, a pension under: (i) Part 2.3, 2.4 or 2.5 of the Social Security Act 1991; or (ii) Division 4 or 5 of Part III of the Veterans’ Entitlements Act 1986; and (b) the pension payments were exempt payments under Subdivision 52‑A or 52‑B of the Income Tax Assessment Act 1997; the amount of TP1’s assessable income for that year is to be calculated as if that pension were assessable income. (8) In the circumstances mentioned in paragraphs (2)(b) and (4)(b), if TP1’s taxable income in relation to the relevant income‑recipient for the year is $6 000 or less, the amount of excess rebate is the excess rebate amount mentioned in paragraph (1)(b). (9) In the circumstances mentioned in paragraphs (2)(b) and (4)(b), if TP1’s taxable income in relation to the relevant income‑recipient for the year is greater than $6 000, and each rate of tax payable by TP1 is a rate set out in Part I of Schedule 7 to the Income Tax Rates Act 1986: (a) the amount of excess rebate is calculated using the formula: ![](image.006.png) where: A is TP1’s rebate amount for the year of income, worked out under this regulation. B is TP1’s taxable income for the year; but (b) if the amount calculated in paragraph (a) is less than zero, the amount of excess rebate is zero. (10) In the circumstances mentioned in paragraphs (2)(b) and (4)(b), if TP1’s taxable income for the year is greater than $6 000, and each rate of tax payable by TP1 is a rate set out in Part II of Schedule 7 to the Income Tax Rates Act 1986, the amount of excess rebate is the excess rebate amount mentioned in paragraph (1)(c). ### Division 3—Rebate under section 160AAA of the Act #### 152 Rebate of tax in respect of rebatable benefits (1) If the assessable income of a taxpayer of a year of income includes an amount of rebatable benefit, the taxpayer is entitled in the taxpayer’s assessment in respect of income of that year of income to a rebate of tax of the amount calculated using the formula in subregulation (2) or (3). (2) If the taxpayer’s benefit amount is less than or equal to the threshold at the upper conclusion of the lowest marginal tax rate, the formula is: ![](image.007.png) where: > A is the taxpayer’s benefit amount, being the amount of rebatable benefit received by the taxpayer during the year of income, rounded down to the nearest whole dollar. > Note: For lowest marginal tax rate and tax‑free threshold—see regulation 148. (3) If the taxpayer’s benefit amount is greater than the threshold at the upper conclusion of the lowest marginal tax rate, the formula is: ![](image.008.png) where: > A is the taxpayer’s benefit amount, being the amount of rebatable benefit received by the taxpayer during the year of income, rounded down to the nearest whole dollar. > B is the threshold at the upper conclusion of the lowest marginal tax rate. > Note: For lowest marginal tax rate and tax‑free threshold—see regulation 148. (4) If the amount worked out under subregulation (2) or (3) is not an amount of whole dollars, the amount must be rounded up to the nearest whole dollar. ## Part 8A—Foreign income ### Division 1—General #### 152A Interpretation (1) In this Part, unless the contrary intention appears, words and phrases have the same meanings as they have in Part X of the Act. (2) In this Part, unless the contrary intention appears: > CGT asset has the meaning given by section 108‑5 of the Income Tax Assessment Act 1997. > compulsory acquisition, in relation to a CGT asset, means the compulsory acquisition of that asset by: (a) the government of a country, whether a federal, State or municipal government (however described); or (b) an authority of such a government. > permanent establishment, in relation to an entity that carries on business in a listed country: (a) if there is a double tax agreement in relation to the country and section 23AH of the Act applies to the entity—has the same meaning as in the agreement; or (b) in any other case—has the meaning given by subsection 6(1) of the Act. > wholly‑owned group has the meaning given by section 975‑500 of the Income Tax Assessment Act 1997. (3) In this Part (other than in regulation 152D): > capital gains means gains or profits of a capital nature that arise from the sale or disposal of all or part of a CGT asset, other than gains or profits that would not be capital gains but for a provision of Australian tax law. (4) In this Part: > passive income means passive income described in section 446 of the Act, subject to the following modifications: (a) omit paragraph 446(1)(k) and insert the following paragraph: ‘(k) capital gains in respect of tainted assets;’; (b) if it is necessary to identify the designated concession income of an entity to which Division 6AAA of Part III of the Act applies, as part of using Schedule 9: (i) read each reference, as appropriate, in Part X to a company as a reference to the entity; and (ii) read each reference, as appropriate, in Part X to a statutory accounting period as a reference to a year of income; (c) if it is necessary to identify the designated concession income of an entity to which section 23AH of Part III of the Act applies, as part of using Schedule 9, read each reference, as appropriate, in Part X to a statutory accounting period as a reference to a year of income. ### Division 2—Controlled foreign companies #### 152B Income or profits as designated concession income (1) For the definition of designated concession income in section 317 of the Act, if: (a) a listed country is mentioned in column 2 of an item in Part 2 of Schedule 9; and (b) an entity mentioned in column 3 of the item derived income or profits that are: (i) of a kind specified in column 4 of the item; and (ii) further described in column 5 of the item; the income or profits are designated concession income. (2) For subregulation (1), the income or profits of an entity include: (a) the entity’s interest in the income or profits of a partnership in which the entity is a partner; and (b) the entity’s beneficial interest in the income or profits of a trust estate in which the entity is a beneficiary. #### 152C Listed countries For the definition of listed country in subsection 320(1) of the Act, a foreign country or a part of a foreign country listed in Schedule 10 is declared to be a listed country for the purposes of Part X of the Act. #### 152D Capital gains regarded as subject to tax (1) In this regulation: > capital gains means gains or profits or other amounts of a capital nature. > roll‑over relief, in relation to a particular tax accounting period in relation to a listed country, means the deferral of tax liability in the tax accounting period under a tax law of the listed country because of a circumstance specified in regulation 152E. (2) For section 324 of the Act, if: (a) capital gains that are derived by an entity are not subject to tax in a listed country in a particular tax accounting period; and (b) apart from the availability of roll‑over relief, the capital gains would have been subject to tax in the listed country in the tax accounting period; the capital gains are to be treated as if they were subject to tax in the listed country in the tax accounting period. #### 152E Circumstances specified for the definition of roll‑over relief in regulation 152D For the definition of roll‑over relief in subregulation 152D(1), each of the following circumstances is specified: (a) an entity: (i) is taken to have disposed of all or part of a CGT asset because of an act, transaction or event as a result of which the entity has received an amount of money or a replacement CGT asset: (A) by way of compensation for the compulsory acquisition, or for the loss or destruction, of the original CGT asset; or (B) under a policy of insurance against the risk of loss or destruction of the original CGT asset; and (ii) after receiving an amount of money mentioned in subparagraph (i), in order to achieve a deferral of tax liability under the tax law of the listed country, is required: (A) to incur expenditure in acquiring a CGT asset in place of the original CGT asset; or (B) to incur expenditure of a capital nature in repairing or restoring the original CGT asset; (b) a company disposes of a CGT asset to another company, and the transferee is a member of the same wholly‑owned group as the transferor; (c) a company redeems or cancels all the shares of a particular class in the company, and: (i) an entity holds shares of that class in the company; and (ii) the company issues to the entity other shares in the company in substitution for the redeemed or cancelled shares; and (iii) the market value of the new shares immediately after they were issued is not less than the market value of the redeemed or cancelled shares immediately before the redemption or cancellation; and (iv) the entity did not receive any consideration (other than the new shares) in respect of the redemption or cancellation; (d) an entity owns an option to acquire shares in a company or a right, issued by a company, to acquire shares in the company or to acquire an option to acquire shares in the company, and: (i) any of the shares: (A) are consolidated and divided into new shares of a larger amount; or (B) are subdivided into shares of a smaller amount; and (ii) as a result of the consolidation or subdivision: (A) the original option is cancelled; or (B) the original right is cancelled; and (iii) the company issues to the entity: (A) another option relating to the new shares in substitution for the original option; or (B) another right relating to the new shares, in substitution for the original right; and (iv) the market value of the new option or the new right, immediately after it was issued, is not less than the market value of the original option or original right immediately before its cancellation; and (v) the entity did not receive any consideration in respect of the cancellation, other than the new option or right. #### 152F Accruals tax laws For the purposes of the definition of accruals tax law in section 317 of the Act, each of the following laws of a broad‑exemption listed country is declared to be an accruals tax law: (a) sections 90 to 95 (inclusive) of the Income Tax Act of Canada; (b) article 209B of the General Tax Code of France; (c) sections 7 to 14 (inclusive) of the Foreign Tax Act of the Federal Republic of Germany; (d) articles 40‑4 to 40‑6 (inclusive) and 66‑6 to 66‑9 (inclusive) of the Special Taxation Measures Law of Japan; (e) sections CQ 1 to CQ 3 (inclusive) and sections EX 1 to EX 27 (inclusive) of the Income Tax Act 2007 of New Zealand; (f) Part 9A of the Taxation (International and Other Provisions) Act 2010 of the United Kingdom; (g) Chapter 3A of Part 2 of the Corporation Tax Act 2009 of the United Kingdom; (h) subpart F of Part III of subchapter N of Chapter 1 of the Internal Revenue Code of the United States of America. #### 152G State foreign taxes that are treated as federal foreign taxes For the purposes of Part X of the Act, a foreign tax imposed in Switzerland that is a cantonal tax on income referred to in paragraph 3(b) of Article 2 of the Swiss convention within the meaning of the International Tax Agreements Act 1953 is to be treated as if it were an additional federal foreign tax of Switzerland. ## Part 10—Miscellaneous #### 173 Appointment of Public Officer Whenever the position of Public Officer of a company becomes vacant, and it is necessary for a new Public Officer to be appointed, the notice of appointment by the company of a new Public Officer must be given to the Commissioner in the approved form. ## Part 15—Application and transitional provisions #### 200 Transitional arrangements arising out of the Income Tax Amendment Regulation 2013 (No. 1) The amendments made by Schedule 1 to the Income Tax Amendment Regulation 2013 (No. 1) apply in relation to assessments of income for the 2012‑2013 income year and later income years. #### 201 Transitional arrangements arising out of the Tax Laws Amendment (2013 Measures No. 1) Regulation 2013 The amendments made by items 1 to 5 of Schedule 1 to the Tax Laws Amendment (2013 Measures No. 1) Regulation 2013 apply in relation to assessments of income for the 2013‑2014 income year and later income years. #### 202 Transitional arrangements arising out of the Tax and Superannuation Laws Amendment (Release Conditions for Non‑concessional Contributions) Regulation 2015 The amendment of these Regulations made by item 1 of Schedule 1 to the Tax and Superannuation Laws Amendment (Release Conditions for Non‑concessional Contributions) Regulation 2015 applies in relation to assessments for the 2013‑14 year of income and later years of income. #### 202 Transitional arrangements arising out of the Treasury Laws Amendment (2015 Measures No. 1) Regulation 2015 The repeal made by item 17 of Schedule 1 to the Treasury Laws Amendment (2015 Measures No. 1) Regulation 2015 applies in relation to quarters or financial years (as the case requires) beginning on or after 1 July 2015.