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INCOME TAX ASSESSMENT ACT 1936 - SECT 432 Active income test

INCOME TAX ASSESSMENT ACT 1936 - SECT 432

Active income test

  (1)   Subject to sections   437 and 453, for the purposes of this Part, a company is taken to pass the active income test in relation to a statutory accounting period if, and only if:

  (a)   the company was in existence at the end of the statutory accounting period; and

  (b)   there was no time during the statutory accounting period when the company was in existence when the company was neither a resident of a particular listed country nor of a particular unlisted country; and

  (c)   the company has kept accounts for the statutory accounting period and:

  (i)   the accounts are prepared in accordance with commercially accepted accounting principles; and

  (ii)   the accounts give a true and fair view of the financial position of the company; and

  (d)   the company has complied with the substantiation requirements set out in section   451 in relation to the statutory accounting period; and

  (e)   at all times during the statutory accounting period when the company was in existence and was a resident of a particular listed country, or of a particular unlisted country, the company carried on business in that country at or through a permanent establishment of the company in that country; and

  (f)   the tainted income ratio of the company for the statutory accounting period is less than 0.05.

  (3)   For the purposes of this section, if a company was dormant, within the meaning of Part   VI of the Companies Act 1981 , throughout a particular period (in this subsection called the dormant period ) commencing on the day on which the company was incorporated, the company is to be taken not to have been in existence during the dormant period.

Subdivision   B -- Tainted income ratio

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