Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p16
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 16/20)
Character Range: 6830237–6832796

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 tax amount does not include an amount of *foreign IIR tax or *foreign UTPR tax that is treated as not being foreign tax under subsection 393(2) of the 1936 Act.
 (4) For the purposes of paragraphs (3)(a) and (b), the tax amount includes an amount that is taken to have been paid by the *CFC under subsection 393(4) of the 1936 Act (about tax paid on reinsurance premiums).

Association condition
 (5) If the entity is a company, it must have an *attribution percentage of 10% or more:
 (a) for a section 456 case—in relation to the *CFC at the end of the statutory accounting period; or
 (b) for a section 457 case—in relation to the CFC at the residence‑change time (within the meaning of section 457 of the 1936 Act).

Amount of foreign income tax
 (7) The amount worked out under this subsection is:
 (a) for a section 456 case—the sum of all the tax amounts for the statutory accounting period multiplied by the company's *attribution percentage in relation to the *CFC at the time mentioned in paragraph (5)(a); or
 (b) for a section 457 case—the sum of all the tax amounts to the extent they are attributable to the amount included in the company's assessable income under section 457 of the 1936 Act.

Grossing‑up of attributed amount
 (8) For the purposes of this Act except this section and section 371 of the 1936 Act (for a section 456 case or a section 457 case), the amount included in the entity's assessable income as described in subsection (2) is taken to be increased by the amount of tax worked out under subsection (7).
Note: Section 371 of the 1936 Act records an amount in an attribution account when the amount is included in the assessable income of an attributable taxpayer in relation to a CFC.

Rules about when foreign tax is considered not paid

770‑140  When foreign income tax is considered not paid—anti‑avoidance rule
  Despite anything else in this Division, this Act applies to you as if you had not paid an amount of *foreign income tax to the extent that you or any other entity become entitled to:
 (a) a refund of the foreign income tax; or
 (b) any other benefit worked out by reference to the amount of the foreign income tax (other than a reduction in the amount of the foreign income tax).

770‑145  When foreign income tax is considered not paid—foreign DMT tax reduced by amount