Document ID: chunk:federal_register_of_legislation:C2005A00147:clause:2_1:p1
Version: federal_register_of_legislation:C2005A00147
Segment Type: clause
Provision Reference: sch 2 cl 1 (pt 1/6)
Character Range: 121982–125079

1  Before Division 820
Insert:

Division 802—Foreign residents' income with an underlying foreign source

Table of Subdivisions

802‑A Conduit foreign income

Subdivision 802‑A—Conduit foreign income

Guide to Subdivision 802‑A

802‑5  What this Subdivision is about

      A distribution that an Australian corporate tax entity makes to a foreign resident is not subject to dividend withholding tax, and is not assessable income, to the extent that the entity declares it to be conduit foreign income.
      An Australian corporate tax entity has an amount that is non‑assessable non‑exempt income if it receives a distribution including conduit foreign income from another such entity and it makes a distribution including conduit foreign income.
      This Subdivision sets out the method of working out an entity's conduit foreign income.
      It also discourages streaming of distributions to entities that can take advantage of the receipt of conduit foreign income.

Table of sections

Operative provisions

802‑10 Objects
802‑15 Foreign residents—exempting CFI from Australian tax
802‑20 Distributions between Australian corporate tax entities—non‑assessable non‑exempt income
802‑25 Conduit foreign income of an Australian corporate tax entity
802‑30 Foreign source income amounts
802‑35 Capital gains and losses
802‑40 Effect of foreign tax credits on conduit foreign income
802‑45 Previous declarations of conduit foreign income
802‑50 Receipt of an unfranked distribution from another Australian corporate tax entity
802‑55 No double benefits
802‑60 No streaming of distributions

Operative provisions

802‑10  Objects

  The objects of this Subdivision are:
 (a) to encourage the establishment in Australia of regional holding companies for foreign groups; and
 (b) to improve Australia's attractiveness as a continuing base for its multinational companies;
by providing relief from tax on *distributions by *Australian corporate tax entities to *members who are foreign residents or other Australian corporate tax entities if those distributions relate to *conduit foreign income.

802‑15  Foreign residents—exempting CFI from Australian tax

 (1) So much of the *unfranked part of a *frankable distribution made by an *Australian corporate tax entity that the entity declares, in its *distribution statement, to be *conduit foreign income:
 (a) is not assessable income and is not *exempt income of a foreign resident; and
 (b) is an amount to which section 128B (Liability to withholding tax) of the Income Tax Assessment Act 1936 does not apply.

 (2) The declaration must be made on or before the day on which the *distribution is made.

Note: For a private company, this rule may bring forward the time at which the company is required to make its distribution statement: see section 202‑75.

802‑20  Distributions between Australian corporate tax entities—non‑assessable non‑exempt income

 (1) An *Australian corporate tax entity (the receiving entity) has an amount that is not assessable income and is not *exempt income for an income year if:
 (a) it receives from