Income tax 2020

Acquiring an interest in a CFC during an income year

Source: Taxation In Australia Journal Article

Published Date: 1 Sep 2020

 

The Australian controlled foreign company (CFC) rules are contained in Pt X of the Income Tax Assessment Act 1936 (Cth). Broadly, these rules seek to attribute to Australian taxpayers certain income derived by a non-resident company that is controlled by Australian residents and tax such income on an accruals basis, unless the non-resident company is subject to a tax system
that is deemed comparable to Australia's or the non-resident company is predominantly engaged in active business. This article focuses on the implications of the CFC rules where an Australian taxpayer acquires an interest in a CFC during an income year. The author is of the view that it could give rise to certain undesired outcomes and recommends that such taxpayers consider the
potential impact of the transaction and possible ways to minimise such impact as part of its due diligence process.

Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now

Details

The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))

("TTI")

The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.

Tags

Income tax 2020

Share this page