Document ID: chunk:federal_register_of_legislation:F2022C01160:reg:14
Version: federal_register_of_legislation:F2022C01160
Segment Type: reg
Provision Reference: reg 14
Character Range: 47207–49496

14                            United States of America  All passive income                                                                                                  an entity that operates in the United States of America as a regulated investment company under the tax law of the United States of America      not taxed in the United States of America at the normal company tax rate

Note: Section 324 of the Act explains the meaning of the expression subject to tax. Section 325 of the Act explains when taxation occurs in a country at the country's normal company tax rate.
 (2) In this instrument:
ordinary capital gains means gains or profits of a capital nature that:
 (a) arise from the sale or disposal of all or part of a CGT asset; and
 (b) are not gains or profits that would not be capital gains but for a provision of Australian tax law.
permanent establishment, in relation to an entity that carries on business in a listed country:
 (a) if:
 (i) there is a double tax agreement in relation to the country; and
 (ii) section 23AH of the Act applies to the entity;
  has the same meaning as in the agreement; or
 (b) otherwise—has the meaning given by subsection 6(1) of the Act.

Passive income
 (3) For the purposes of working out, in applying subsection (1) to income derived by an entity, whether the income is passive income of the entity:
 (a) the reference in paragraph 446(1)(k) of the Act to net gains that accrued to the company in the statutory accounting period in respect of the disposal of tainted assets is treated as being a reference to capital gains that accrued to the company in the statutory accounting period in respect of tainted assets; and
 (b) if section 23AH of the Act (about foreign branch income of Australian companies) applies to the entity—each reference, as appropriate, in Part X of the Act to a statutory accounting period is treated as a reference to a year of income; and
 (c) if Division 6AAA of Part III of the Act (about non‑resident trust estates) applies to the entity:
 (i) each reference, as appropriate, in Part X of the Act to a company is treated as being a reference to the entity; and
 (ii) each reference, as appropriate, in Part X to a statutory accounting period is treated as being a reference to a year of income.