Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p15
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 15/16)
Character Range: 6767829–6770676

276; or
 (ii) Division 5 or 6 of Part III of the Income Tax Assessment Act 1936; and
 (c) the amount can be attributed (either directly or indirectly through one or more interposed trusts or partnerships that are not *corporate tax entities) to a *foreign equity distribution; and
 (d) at the time the distribution is made, the entity satisfies the participation test in section 768‑15 in relation to the company that made the distribution; and
 (e) the entity:
 (i) does not receive the distribution in the capacity of a trustee; or
 (ii) receives the distribution in the capacity of a trustee of a *public trading trust; and
 (f) the distribution is not one to which section 768‑7 (which is about foreign income tax deductions) applies.
 (3) An amount that is *non‑assessable non‑exempt income under subsection (2) is taken, for the purpose of section 25‑90 (about deductions relating to foreign non‑assessable non‑exempt income) to be derived from the same source as the *foreign equity distribution.

768‑7  Foreign equity distributions entitled to a foreign income tax deduction
 (1) This section applies to a *foreign equity distribution if:
 (a) all or part of the distribution gives rise to a *foreign income tax deduction; and
 (b) the exception in subsection (2) does not apply to the distribution.

Exception for foreign corporate collective investment vehicles
 (2) This subsection applies to a *foreign equity distribution if:
 (a) the *foreign income tax deduction arises because the company that made the distribution is recognised under the law of the foreign country in which the deduction arises as being used for collective investment; and
 (b) *foreign income tax or a withholding‑type tax was payable in respect of the distribution.

768‑10  Meaning of foreign equity distribution
  A foreign equity distribution is a *distribution or *non‑share dividend made by a company that is not a Part X Australian resident (within the meaning of Part X of the Income Tax Assessment Act 1936) in respect of an *equity interest in the company.

768‑15  Participation test—minimum 10% participation
  An entity satisfies the participation test in this section in relation to another entity at a time if, at that time, the sum of the following is at least 10%:
 (a) the *direct participation interest the entity would have in the other entity if rights on winding‑up were disregarded;
 (b) the *indirect participation interest the entity would have in the other entity if:
 (i) rights on winding‑up were disregarded; and
 (ii) section 960‑185 only applied to intermediate entities that are not *corporate tax entities.

Subdivision 768‑B—Some items of income that are exempt from income tax

Table of sections
768‑100 Foreign government officials in Australia
768‑105 Compensation arising out of Second World War
768‑110  Foreign residents