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 15/20)
Character Range: 6827921–6830472

Act), to be attributable to another amount of income of a particular kind or source; and
 (b) foreign income tax has been paid in respect of the other amount of income; and
 (c) the taxed amount is less than it would have been if that tax had not been paid.
Example: Aust Co (an Australian resident) is the sole beneficiary of an Australian resident trust H and is presently entitled to all the income of trust H. Trust H owns shares in For Co (a foreign company). For Co pays a dividend to trust H and the dividend is subject to withholding tax in For Co's country of residence.
 Trust H allocates to Aust Co, the dividend, as well as other Australian source income trust H earned in the year (none of which was subject to foreign income tax). Aust Co is treated as having paid the foreign income tax paid by For Co under subsection 770‑130(3). The foreign income tax is treated as paid in respect of the amount included in Aust Co's assessable income that is attributable to the dividend.

770‑135  Foreign income tax paid by CFCs on attributed amounts
 (1) This Division applies to an entity (other than a *CFC) as if it had paid an amount of *foreign income tax worked out under subsection (7) in respect of an amount included in its assessable income if:
 (a) the amount is included in its assessable income as described in subsection (2); and
 (b) the conditions in subsections (3) and (5) are satisfied.
 (2) An amount is included in an entity's assessable income as described in this subsection if the entity is a company and the amount is included under:
 (a) section 456 (a section 456 case) of the 1936 Act in relation to a *CFC and a statutory accounting period; or
 (b) section 457 (a section 457 case) of that Act in relation to a CFC.
Note: Section 456 of the 1936 Act includes, in the assessable income of certain Australian shareholders, amounts that are attributable to the profits of an Australian‑controlled foreign company.
 Section 457 does likewise when a controlled foreign company changes residence from an unlisted to a listed country or to Australia.

Tax paid condition
 (3) An amount of *foreign income tax, income tax or *withholding tax (the tax amount) must have been paid:
 (a) for a section 456 case—by the *CFC in respect of an amount included in the notional assessable income of the CFC for the statutory accounting period; or
 (b) for a section 457 case—by the CFC.
Note: Section 770‑130 deems foreign income tax to have been paid in certain circumstances.
 (3A) For the purposes of paragraphs (3)(a) and (b), the