Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p14
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 14/16)
Character Range: 6765088–6768056

the International Tax Agreements Act 1953 or in the international tax agreement itself.
 (3) This section has effect despite any other provision of this Act (other than Part IVA of the Income Tax Assessment Act 1936).

Division 768—Foreign non‑assessable income and gains

Table of Subdivisions
768‑A Returns on foreign investment
768‑B Some items of income that are exempt from income tax
768‑G Reduction in capital gains and losses arising from CGT events in relation to certain voting interests in active foreign companies
768‑R Temporary residents

Subdivision 768‑A—Returns on foreign investment

Guide to Subdivision 768‑A

768‑1  What this Subdivision is about

      If:
             (a) an Australian corporate tax entity receives a foreign equity distribution from a foreign company, either directly or indirectly through one or more interposed trusts or partnerships; and
             (b) the Australian corporate tax entity holds a participation interest of at least 10% in the foreign company;
      the distribution is non‑assessable non‑exempt income for the Australian corporate tax entity.

Table of sections

Foreign equity distributions on participation interests
768‑5 Foreign equity distributions on participation interests
768‑7 Foreign equity distributions entitled to a foreign income tax deduction
768‑10 Meaning of foreign equity distribution
768‑15 Participation test—minimum 10% participation

Foreign equity distributions on participation interests

768‑5  Foreign equity distributions on participation interests

Foreign equity distributions received directly
 (1) A *foreign equity distribution is not assessable income, and is not *exempt income, of the entity to which it is made if:
 (a) the entity is an Australian resident and a *corporate tax entity; and
 (b) 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
 (c) 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
 (d) the distribution is not one to which section 768‑7 (which is about foreign income tax deductions) applies.

Foreign equity distributions received through interposed trusts and partnerships
 (2) An amount is not assessable income, and is not *exempt income, of an entity if:
 (a) the entity is a beneficiary of a trust or a partner in a partnership, an Australian resident and a *corporate tax entity; and
 (b) the amount is all or part of the *net income of the trust or partnership that would, apart from this subsection, be included in the entity's assessable income because of:
 (i) Division 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