Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 5/53)
Character Range: 2926730–2929392

company, unless the company satisfies the business continuity test
 (1) A company must calculate its taxable income and tax loss under this Subdivision if, during the income year, a person begins to control, or becomes able to control, the voting power in the company (whether directly, or indirectly through one or more interposed entities) for the purpose, or for purposes including the purpose, of:
 (a) getting some benefit or advantage in relation to how this Act applies; or
 (b) getting such a benefit or advantage for someone else.
Note 1: A person can still control the voting power in a company that is in liquidation etc.: see section 165‑250.
Note 2: Subdivision 167‑B has special rules for working out voting power in a company whose shares do not all carry the same voting rights, or do not carry all of the voting rights in the company.
 (2) However, that person's control of the voting power, or ability to control it, does not require the company to calculate its taxable income under this Subdivision if the company satisfies the *business continuity test for the rest of the income year (the business continuity test period).
 (3) Apply the *business continuity test to the *business that the company carried on immediately before the time (the test time) when the person began to control that voting power, or became able to control it.
For the business continuity test: see Subdivision 165‑E.

Working out the company's taxable income

165‑45  First, divide the income year into periods
 (1) Divide the income year into periods as follows.
 (2) The first period starts at the start of the income year. Each later period starts immediately after the end of the previous period.
 (3) The last period ends at the end of the income year. Each period (except the last) ends at the earlier of:
 (a) the latest time that would result in persons having *more than a 50% stake in the company during the whole of the period; or
 (b) the earliest time when a person begins to control, or becomes able to control, the voting power in the company (whether directly, or indirectly through one or more interposed entities) for the purpose, or for purposes including the purpose, of:
 (i) getting some benefit or advantage to do with how this Act applies; or
 (ii) getting such a benefit or advantage for someone else.
Note: See section 165‑255 for the rule about incomplete periods.
 (4) However, what would otherwise be 2 or more successive periods are treated as a single period if the company satisfies the *business continuity test for all of them, considered as a single period (the business continuity test period). Apply the business continuity test