INCOME TAX REGULATIONS (AMENDMENT) 1991 NO. 20 INCOME TAX REGULATIONS (AMENDMENT) 1991 NO. 20 - TABLE OF PROVISIONS 1. Commencement 2. Amendment 3. New Part 8A 4. 4.1 Add at the end: 5. New Schedules 9 and 10 SCHEDULE 9 SCHEDULE 10 1991 No. 20 INCOME TAX REGULATIONS (AMENDMENT) - REG 1 1. Commencement 1.1 These Regulations are taken to have taken effect from 1 July 1989. 1991 No. 20 INCOME TAX REGULATIONS (AMENDMENT) - REG 2 2. Amendment 2.1 The Income Tax Regulations are amended as set out in these Regulations. 1991 No. 20 INCOME TAX REGULATIONS (AMENDMENT) - REG 3 3. New Part 8A 3.1 After Part 8, insert: "PART 8A-FOREIGN INCOME Interpretation "152A. (1) In this Part, unless the contrary intention appears, words and phrases have the same meanings as they have in Part X of the Act. "(2) In this Part, unless the contrary intention appears: 'asset' has the same meaning as in section 160A of the Act; 'compulsory acquisition', in relation to an asset, means the compulsory acquisition of that asset by: (a) the government of a country, whether a federal, State or municipal government (however described); or (b) an authority of such a government. 'concessional rate of tax', in relation to a listed country, means a rate of tax that is less than the country's normal company rate of tax imposed under the tax law of the listed country that applies to income derived from sources in that country by a company that is a resident of that country; 'interest income', in relation to an entity, means: (a) interest or payments in the nature of interest; and (b) any amount that, if the entity were a taxpayer and a resident of Australia, would be included in its assessable income under Division 16E of Part III of the Act; 'normal company tax rate' means: (a) in relation to a listed country other than Switzerland-the country's normal company rate of tax imposed under the tax law of the listed country that applies to income derived from sources in that country by a company that is a resident of that country; and (b) in the case of Switzerland-the normal company rate of tax determined by the addition of: (i) the normal company rate of tax imposed by the federal tax law that applies to income derived from sources in Switzerland by a company that is a resident of Switzerland; and (ii) the cantonal normal company rate of tax that applies to that income; 'offshore banking business', in relation to a listed country, means any banking business carried on with, for, or on behalf of a person (either directly or indirectly) who is not a resident of the listed country; 'offshore financial business', in relation to a listed country, means a business of lending money to a person who is not a resident of that country, to the extent that the money lent is provided (either directly or indirectly) by a person who is not a resident of that country; 'offshore income' means income or profits derived by an entity from carrying on: (a) an offshore banking business; or (b) an offshore financial business; or (c) an offshore reinsurance business; or (d) an offshore insurance business; or (e) an offshore investment business; whether or not that business is the sole or principal business of that entity; 'offshore insurance business', in relation to a listed country, means insurance business of any kind involving the insurance against any risk or event outside that listed country; 'offshore investment business', in relation to a listed country, means a business consisting, in whole or in part, of the management of the investment of funds for, or on behalf of, a person (either directly or indirectly) who is not a resident of that listed country; 'offshore reinsurance business', in relation to a listed country, means reinsurance business of any kind in which: (a) the original policy is issued: (i) by a person who is not a resident of that listed country; or (ii) by a foreign permanent establishment of a person resident in that listed country; and (b) the risk or event is reinsured where the risk is, or the event occurs, outside that listed country; 'permanent establishment', in relation to an entity that carries on business in a listed country: (a) if there is a double tax agreement in relation to the country and section 23AH of the Act applies to the entity has the same meaning as in the agreement; or (b) in any other case-has the meaning given by subsection 6 (1) of the Act; 'relevant listed country', in relation to an entity, means: (a) if the entity is a CFC that is a resident of a listed country at the end of a statutory accounting period-that listed country; or (b) if the entity, whether or not it is a CFC to which paragraph (a) applies, derives a capital gain, offshore income, interest income, shipping income or royalty, from any source in a relevant period, in connection with a permanent establishment of the entity in a listed country the country in which the permanent establishment is located. 'relevant period': (a) in relation to a CFC that is a resident of a listed country at the end of a statutory accounting period-means a statutory accounting period for that CFC; and (b) in relation to a company referred to in section 377 of the Act-means an accounting period for that company; and (c) in relation to a CFC referred to in section 403 of the Act means a statutory accounting period for that CFC; and (d) in relation to a company referred to in section 436 of the Act-means a statutory accounting period for that company; and (e) in relation to any other entity-means a year of income; 'relevant tax accounting period', in relation to an entity, means a tax accounting period within the meaning of section 317 of the Act that ends before the end of, or commences during, the relevant period in relation to that entity; 'shipping income means': (a) rent in respect of a lease of: (i) a ship; or (ii) a cargo container designed or intended for use on a ship as part of a containerised cargo handling system; or (iii) plant or equipment designed or intended for use on board a ship; or (b) an amount that is paid or is payable in respect of the carrying on of a business of transporting passengers, mail, livestock or goods by ship. "(3) Subject to subregulation (4), for the purposes of the definitions of: (a) 'offshore banking business'; and (b) 'offshore financial business'; and (c) 'offshore investment business'; and (d) 'offshore reinsurance business'; a person is a resident of a listed country at a particular time if, and only if, the person is, at that time, treated as a resident of the listed country for the purposes of the tax law of the listed country. "(4) If the tax law of a listed country adopts a criterion other than treatment as a resident as the criterion for applying to a person a worldwide source tax base (within the meaning of section 331 of the Act), subregulation (3) has effect, in relation to that tax law, as if that criterion were the same as treatment as a resident of the listed country for the purposes of that tax law. What are capital gains? "152B. (1) Subject to subregulation (3), in this Part (other than in regulation 152F), 'capital gains', in relation to a CFC that is a resident of a listed country at the end of a statutory accounting period, means gains or profits of a capital nature that arise from the sale or disposal of all or part of an asset that is sold or disposed of by the CFC during that accounting period. "(2) For the purposes of subregulation (1), 'capital gains', in relation to a CFC that is resident of a listed country at the end of a statutory accounting period, includes gains or profits that arise from the sale or disposal of all or part of: (a) an interest in a partnership asset of a partnership in which the CFC is a partner; or (b) a beneficial interest in a trust asset of a trust estate in which the CFC is a beneficiary; where the interest has been sold or disposed of during the period referred to in subregulation (1). "(3) In this Part (other than in regulation 152F), 'capital gains', in relation to a permanent establishment in relation to an entity, means gains or profits of a capital nature that arise from the sale or disposal of all or part of an asset: (a) that has been used by the entity in carrying on business in a listed country at or through the permanent establishment of the entity in that country; or (b) that was effectively connected with the permanent establishment of the entity in a listed country; where the asset has been sold or disposed of during a relevant period. "(4) For the purposes of this Part (other than regulation 152F), capital gains are taken to be derived by an entity from the sale or disposal of all or part of an asset, or an interest in an asset, in the same relevant period as the relevant period in which the sale or disposal occurred. When are income or profits subject to a reduction of tax? "152C. (1) Subject to subregulation (2), in this Part, income or profits derived by an entity in a relevant period are regarded as being 'subject to a reduction of tax' in a listed country in a particular tax accounting period if: (a) a law of that country; or (b) a decree, proclamation, instrument or direction (however described) issued by a competent authority in that country; or (c) an administrative arrangement in that country; provides that the income or profits are, in the tax accounting period: (d) exempt from tax under a tax law of the listed country; or (e) subject to a concessional rate of tax; or (f) not required to be used as the basis for: (i) determining the amount of taxable income, taxable profits or tax base, as the case may be; or (ii) establishing the tax liability; of the entity under a tax law of the listed country; or (g) subject to subregulation (3), reduced for the purposes of: (i) determining the amount of taxable income, taxable profits or tax base, as the case may be; or (ii) establishing the tax liability; of the entity under a tax law of the listed country; or (h) subject to any other form of tax benefit that has the effect of reducing the amount of tax that would otherwise be payable by the entity under a tax law of the listed country. "(2) Income or profits derived by an entity in a relevant period are not to be regarded as subject to a reduction of tax in any tax accounting period if the income or profits are not subject to a reduction of tax in any of the relevant tax accounting periods that relate to the relevant period. "(3) Paragraph (1) (g) does not apply to the reduction under the tax law of the listed country of income or profits by losses or outgoings to the extent to which the losses or outgoings are: (a) incurred by the entity in gaining or producing the income or profits; or (b) necessarily incurred by the entity in carrying on a business for the purpose of gaining or producing the income or profits. "(4) Income or profits in relation to Switzerland are taken to be subject to a concessional rate of tax if the income or profits are subject to a concessional rate of tax: (a) under the law that imposes the federal foreign tax; or (b) under the law that imposes the tax that is, in accordance with regulation 152K, to be treated as if it were an additional federal foreign tax. "(5) For the purposes of paragraph (1) (h), 'tax benefit' in relation to a listed country, includes a credit, rebate or other tax concession provided in respect of income or profits, other than a credit or rebate for foreign tax payable under a law of another foreign country or tax payable under a law of Australia. Income or profits as designated concession income "152D. (1) For the purposes of the definition of 'designated concession income' in section 317 of the Act, the following kinds of income or profits are specified: (a) in relation to each listed country-capital gains derived by an entity during a relevant period, if it is a feature in relation to foreign tax imposed by a tax law of a relevant listed country that the capital gains derived by the entity in the relevant period are exempt from tax in the relevant listed country in a tax accounting period; (b) in relation to each listed country-offshore income, interest income, royalties or shipping income derived by an entity during a relevant period, if that income or those royalties are derived: (i) by a CFC that is a resident of a relevant listed country at the end of that relevant period-from any source; and (ii) by any entity-from any source, in carrying on business in a relevant listed country at or through a permanent establishment of the entity in that country; and it is a feature in relation to foreign tax imposed by a tax law of the relevant listed country that the income or royalties derived by the entity in the relevant period are subject to a reduction of tax in the relevant listed country in a tax accounting period; (c) in relation to a listed country referred to in Column 2 of an item in Part 2 of Schedule 9-income or profits derived in a relevant period, from any source, by an entity referred to in Column 3 of that item, if it is a feature in relation to foreign tax imposed by a tax law of that listed country that the income or profits derived by the entity in the relevant period are subject to a reduction of tax in the listed country in a tax accounting period. "(2) For the purposes of subparagraph (1) (b) (i), income or royalties derived by a CFC includes income or royalties consisting of: (a) the CFC s interest in the income or royalties of a partnership in which the CFC is a partner; or (b) the CFC s beneficial interest in the income or royalties of a trust estate in which the CFC is a beneficiary; where the income or royalties of the partnership or trust estate are derived during the relevant period referred to in paragraph (1) (b). "(3) For the purposes of paragraph (1) (b), interest income that would be included in an entity s assessable income under Division 16E of Part III of the Act in a relevant period: (a) if the entity were a taxpayer and a resident of Australia; and (b) if references to year of income in that Division were read as references to relevant period; is to be taken to be derived by the entity in that relevant period. "(4) In spite of paragraph (1) (b), interest income or royalties are not to be regarded as designated concession income if, in relation to a relevant listed country: (a) an entity derives that income or those royalties in a relevant period; and (b) an amount of tax paid, or payable, under a tax law of the relevant listed country (before the grant of a credit or rebate: (i) for any foreign tax payable under a law of another foreign country; or (ii) for any Australian tax); on that income or those royalties in respect of a relevant tax accounting period that relates to the relevant period is not less than an amount calculated in accordance with the formula: G x NCR where: 'G' is the amount of the gross income or gross royalties derived by the entity; 'NCR' is the normal company tax rate of the relevant listed country. "(5) In spite of paragraph (1) (b), interest income or royalties are not to be regarded as designated concession income if, in relation to a relevant listed country: (a) an entity derives that income or those royalties in a relevant period from sources in another listed country (in this subregulation, called the 'source listed country'); and (b) an amount of tax paid, or payable, under a tax law of the source listed country on that income or those royalties in respect of a relevant tax accounting period that relates to the relevant period is not less than an amount calculated in accordance with the formula: G x NCRS where: 'G' is the amount of the gross income or gross royalties derived by the entity; 'NCRS' is the normal company tax rate of the source listed country. "(6) In spite of paragraph (1) (b), shipping income is not to be regarded as designated concession income if, in relation to a relevant listed country: (a) an entity derives shipping income in a relevant period; and (b) the shipping income is derived from sources in a foreign country other than the relevant listed country; and (c) an amount of tax paid, or payable, under a tax law of the foreign country on the shipping income in respect of a relevant tax accounting period that relates to the relevant period is not less than 5% of the amount of the gross shipping income. When are capital gains exempt from tax? "152E. (1) For the purposes of paragraph 152D (1) (a), capital gains are taken to be exempt from tax in relation to a relevant listed country if foreign tax imposed by a tax law of the country is not payable in a particular tax accounting period in respect of the capital gains because: (a) a law of that country; or (b) a decree, proclamation, instrument or direction (however described) issued by a competent authority in that country; or (c) an administrative arrangement in that country; exempts the capital gains from tax or has the effect that the capital gains are not taxed under the tax law of the country in the tax accounting period. "(2) If: (a) in spite of subregulation (1); and (b) apart from the deferral of tax liability; foreign tax in respect of capital gains would have been payable: (c) under the tax law of the relevant listed country; and (d) in the tax accounting period; because the capital gains would not have been exempt from tax, capital gains in relation to that country are not taken to be exempt from tax in that tax accounting period only because the tax law of that country provides for a deferral of tax liability in that country in respect of the capital gains in any of the circumstances referred to in subregulations 152G (1) and (2). "(3) In spite of subregulation (1), capital gains derived by an entity in a relevant period are not regarded as exempt from tax in a relevant listed country in a tax accounting period if: (a) tax is not paid on the capital gains by the entity in the tax accounting period because of a provision of a law of that country; and (b) the tax is regarded as having been paid in respect of the capital gains under a double tax agreement or under regulations made for the purposes of section 160AFF of the Act. Certain capital gains regarded as subject to tax "152F. (1) For the purposes of section 23AH, Division 6AAA of Part III and Part X of the Act, if: (a) capital gains that accrue to, or are derived by, an entity are not subject to tax in a listed country in a particular tax accounting period; and (b) apart from the feature of roll-over relief, the capital gains would have been subject to tax in the listed country in the tax accounting period; the capital gains are to be treated as if they were subject to tax in the listed country in the tax accounting period. "(2) In this regulation, a reference to 'roll-over relief', in relation to a particular tax accounting period in relation to a listed country, is a reference to the deferral of tax liability in the tax accounting period under a tax law of the listed country: (a) in relation to section 23AH and Part X of the Act-because of a circumstance referred to in subregulations 152G (1) and (2); and (b) in relation to Division 6AAA of Part III of the Act because of a circumstance referred to in subregulation 152G (1) and paragraphs 152G (2) (b) and (c); if, apart from the deferral of tax liability, foreign tax would have been payable under the tax law in the tax accounting period in respect of the capital gains because the capital gains would have been included in the tax base of that law for the tax accounting period. "(3) In this regulation, a reference to 'capital gains' is a reference to a gain or profit or other amount of a capital nature. Circumstances specified for purposes of regulations 152E and 152F "152G. (1) The following circumstance is specified for the purposes of subregulations 152E (2) and 152F (2): (a) that an entity is taken to have disposed of all or part of an asset because of an act, transaction or event as a result of which the entity has received an amount of money or a replacement asset: (i) by way of compensation for the compulsory acquisition, or for the loss or destruction, of the original asset; or (ii) under a policy of insurance against the risk of loss or destruction of the original asset; and (b) when the entity has received an amount of money referred to in paragraph (a)-the entity is required, to achieve a deferral of tax liability under the tax law of the listed country, to incur expenditure in acquiring an asset in place of the original asset or to incur expenditure of a capital nature in repairing or restoring the original asset. "(2) Each of the following circumstances is specified for the purposes of subregulation 152E (2) and subregulation 152F (2): (a) that a company disposes of an asset to another company and the transferee is a group company in relation to the transferor; (b) that: (i) a company redeems or cancels all of the shares of a particular class in the company; and (ii) an entity holds shares of that class in the company; and (iii) the company issues to the entity other shares in the company in substitution for the first-mentioned shares; and (iv) the market value of the new shares immediately after they were issued is not less than the market value of the first-mentioned shares immediately before the redemption or cancellation; and (v) the entity did not receive any consideration (other than the new shares) in respect of that redemption or cancellation; (c) that: (i) an entity owns: (A) rights issued by a company to acquire shares in the company or to acquire an option to acquire shares in the company; or (B) an option to acquire shares in the company; and (ii) in relation to any of the shares referred to in subparagraph (i): (A) the shares are consolidated and divided into new shares of a larger amount; or (B) the shares are subdivided into shares of smaller amount; and (iii) as a consequence of the consolidation or subdivision: (A) the original rights are cancelled; or (B) the original option is cancelled; and (iv) the company issues to the entity: (A) other rights relating to the new shares, in substitution for the original rights; or (B) another option relating to the new shares, in substitution for the original option; and (v) the market value of the new rights or the new option immediately after it was issued is not less than the market value of the original rights or option immediately before its cancellation; and (vi) the entity did not receive any consideration in respect of the cancellation other than the new rights or option. "(3) In subregulation (2), 'group company' has the meaning that it would have in subsections 160ZZO (3) to (8B) of the Act (inclusive) if, in those subsections, references to year of income were read as references to tax accounting period. Tax sparing "152H. (1) For the purposes of paragraph 152D (1) (b), in relation to a relevant listed country, offshore income, interest income, royalties or shipping income derived by an entity in a relevant period are not taken to be subject to a reduction of tax in a tax accounting period that relates to the relevant period if: (a) tax is not paid on the income or royalties by the entity in the tax accounting period because of a provision of a law of the relevant listed country; and (b) but for the provision of the law of the relevant listed country, the income or royalties would not have been subject to a reduction of tax in the relevant listed country in the tax accounting period; and (c) the tax is regarded as having been paid in respect of the income or royalties under a double tax agreement or by regulations made for the purposes of section 160AFF of the Act. "(2) For the purposes of subregulations 152D (4), (5) and (6), in relation to a relevant listed country, if interest income, royalties or shipping income are derived by an entity in a relevant period, tax is regarded as having been paid or payable in respect of a relevant tax accounting period if: (a) tax is not paid, or is not payable, on the income or royalties by the entity in respect of the relevant tax accounting period because of a provision of a law of the relevant listed country; and (b) the tax is regarded as having been paid in respect of the income or royalties under a double tax agreement or by regulations made for the purposes of section 160AFF of the Act. Features relating to taxation in listed countries "152I. For the purposes of the definition of 'designated concession income' in section 317 of the Act, features of a kind referred to in subregulation 152D (1) are features in relation to foreign tax imposed by a tax law of a listed country. What are listed countries ? "152J. Each foreign country or part of a foreign country specified in Schedule 10 is declared to be a listed country for the purposes of Part X of the Act. State foreign taxes that are treated as federal foreign taxes "152K. For the purposes of Part X of the Act, a foreign tax imposed in Switzerland that is a cantonal tax on income referred to in paragraph 1 (b) of Article 2 of the Swiss agreement within the meaning of the Income Tax (International Agreements) Act 1953 is to be treated as if it were an additional federal foreign tax of Switzerland.". 1991 No. 20 INCOME TAX REGULATIONS (AMENDMENT) - REG 4 4.1 Add at the end: 4. Regulation 170 (Services of notices etc.) "(2) This regulation applies to the service of a notice: (a) for the purposes of section 451 of the Act-by an attributable taxpayer upon a company that is a CFC within the meaning of Part X; and (b) for the purposes of section 452 of the Act-by a company that is a CFC within the meaning of that Part upon a partnership; in the same way as it applies to the Commissioner serving a notice on a person.". 1991 No. 20 INCOME TAX REGULATIONS (AMENDMENT) - REG 5 5. New Schedules 9 and 10 5.1 After Schedule 8, add the following Schedules: 1991 No. 20 INCOME TAX REGULATIONS (AMENDMENT) - SCHEDULE 9 SCHEDULE 9 Paragraph 152D (1) (c) PART 1 INTERPRETATION 1. In this Schedule, unless the contrary intention appears, words and phrases have the same meanings as they have in Part X of the Act or Part 8A of these Regulations, as the case requires. 2. In this Schedule, a reference to a law of a listed country is a reference to that law as amended and in force from time to time. PART 2 ENTITIES AND LISTED COUNTRIES REFERRED TO IN PARAGRAPH 152D (1) (c) Column 1 Column 2 Column 3 Item No. Listed country Entity 1 Belgium An entity that is recognised or qualified as a co-ordination centre under a law of Belgium 2 Belgium An entity that is recognised or qualified as a Foreign Sales Corporation under a tax law of the United States of America 3 Belgium An entity that is recognised or qualifies as a distribution centre under a law of Belgium 4 Brazil An entity that is recognised or qualifies as, or derives income or profits through, an authorised investment fund formed under Decree-law No. 1.401 of Brazil 5 Bulgaria An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) from activities or operations carried on in one or more of the following zones of Bulgaria: (a) the Burgas Duty Free Zone; (b) the Plovdiv Duty Free Zone; (c) the Rousse Duty Free Zone; (d) the Svilengrad Duty Free Zone; (e) the Vidin Duty Free Zone 6 France An entity that operates in France as a headquarters entity under a law of France or by virtue of an administrative arrangement with the French authorities 7 Germany, An entity that operates in the Federal Republic of Federal Germany as a headquarters entity in accordance with Republic of the Decree on management centres (Kontrollstellenerlass) of 24 August 1984 8 Greece An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Greece in the tax accounting period referred to in that paragraph because of Law 89/1967 of Greece 9 Hungary An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Hungary in the tax accounting period referred to in that paragraph because of Decree No. 1 of 1977 of the Ministry for Finance of Hungary 10 Ireland An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) from goods manufactured in Ireland 11 Ireland An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) from activities undertaken in the Shannon Airport Zone 12 Ireland An entity that drives income or profits during the relevant period referred to in paragraph 152D (1) (c) from design and planning services carried out in Ireland in connection with chemical, civil, electrical or mechanical engineering projects executed outside the European Community 13 Ireland An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) from computer services, including data processing and software development services, and technical and related consultancy services 14 Ireland An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) from the provision of international financial services, undertaken within the Dublin Custom House Docks area, to persons not ordinarily resident in Ireland 15 Ireland An entity that derives income or profits during the the relevant period referred to in paragraph 152D (1) (c) from shipping activities in relation to the carriage of passengers or cargo in ships that are owned and registered in Ireland, the provision of ancillary services on board those ships or the chartering of those ships 16 Ireland An entity that operates in Ireland as a headquarters entity under a law of Ireland or by virtue of an administrative arrangement with the Irish authorities 17 Israel An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Israel in the tax accounting period referred to in that paragraph because of the Law for the Encouragement of Capital Investment (1959) of Israel 18 Luxembourg An entity that is recognised or qualifies as a Holding company under a law of Luxembourg 19 Luxembourg An entity that carries on any reinsurance business in Luxembourg 20 Luxembourg An entity that is recognised or qualifies as a co-ordination centre under a law of Luxembourg 21 Malaysia An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Malaysia in the tax accounting period referred to in that paragraph because of section 60, 60A or 60B of the Income Tax Act 1967 of Malaysia 22 Malaysia An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Malaysia in the tax accounting period referred to in that paragraph because of section 60E of the Income Tax Act 1967 of Malaysia 23 Malta An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Malta in the tax accounting period referred to in that paragraph because of the International Business Activities Act 1988 of Malta or the Offshore Trusts Act 1988 of Malta 24 Netherlands An entity that operates in the Netherlands as a headquarters entity under a law of the Netherlands or by virtue of an administrative arrangement with the Netherlands authorities 25 Netherlands An entity that is recognised or qualifies as a Foreign Sales Corporation under a tax law of the United States of America 26 Pakistan An entity that is engaged in air transport operations of any kind (including the leasing of aircraft) 27 Philippines An entity that is an Offshore Banking Unit or a Foreign Currency Deposit Unit within the meaning of Presidential Decree 1034 or 1035 of 30 September 1976 of the Philippines or regulations under any of those Decrees 28 Philippines An entity that operates in the Philippines as an area or regional headquarters entity under a law of the Philippines or by virtue of an administrative arrangement with the Philippines authorities 29 Portugal An entity that is approved under, and whose activities or operations are regulated by: (a) Decree-Law 500/80 of 20 October 1980; or (b) Regulatory Decree 53/82 of 23 August 1982; or (c) Decree-Law 163/86 of 26 June 1986 as amended by Decree-Law 197/88 of 31 May 1988 and Decree-Law 15/89 of 1 February 1989; or (d) Decree-Law 352-A/88 of 3 October 1988; or (e) Decree-Law 502/85 of 30 December 1985 as revised by Decree-Law 165/86 of 26 June 1986 30 Portugal An entity that is approved under, and whose activities are regulated by: (a) Decree-Law 34/82 of 4 February 1982; or (b) Regulatory Decree 54/82 of 23 August 1982; or (c) Decree-Law 501/85 of 28 December 1985; or (d) Regional Legislative Decree 21/86A of 27 October 1986 or; (e) Decree-Law 63/87 of 5 February 1987; or (f) Regional Legislative Decree 19/87A of 28 November 1987 31 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of the Income Tax (Concessionary Rate of Tax for Asian Currency Unit Income) Regulations 1988 32 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of the Income Tax (Concessionary Rate of Tax for Approved Securities Companies) Regulations 1988 33 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of the Income Tax (Income from Syndicated Offshore Credit and Underwriting Facilities) Regulations 1986 34 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of the Income Tax (Concessionary Rate of Tax for Approved Fund Managers) Regulations 1988 35 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of the Income Tax (Concessionary Rate of Tax for Income from Insuring and Reinsuring Offshore Risks) Regulations 1980 36 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of the Income Tax (Concessionary Rate of Tax for Income from Gold Bullion, Gold Futures and Financial Futures) Regulations 1985 37 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of the Income Tax (Concessionary Rate of Tax for Approved Headquarters Company) Regulations 1988 38 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of the Income Tax (Income from Funds Managed for Foreign Investors) Regulations 1988 39 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of regulations made under section 43F of the Income Tax Act of Singapore 40 Singapore An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c), of a kind attributable to the provision of financial services (including insurance) within the meaning of paragraph (3)(c) of Article 18 of the Singapore agreement within the meaning of the Income Tax (International Agreements) Act 1953, if the income or profits are subject to a reduction of tax under a tax law of Singapore in the tax accounting period referred to in that paragraph because of the Economic Expansion Incentives (Relief from Income Tax) Act 1988 of Singapore 41 Solomon An entity that carries on insurance business Islands of any kind in the Solomon Islands 42 Solomon An entity that is engaged in air transport Islands operations of any kind (including the leasing of aircraft) 43 Spain An entity that operates in Spain as a headquarters entity and the entity is authorised by the Minister of Economy and Finance of Spain to hold shares in foreign entities but is not authorised to carry on business in Spain 44 Spain An entity that is registered with the Minister of Economy and Finance of Spain as a venture capital company or fund under Royal Decree-Law 1 of 14 March 1986 of Spain 45 Sri Lanka An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Sri Lanka in the tax accounting period referred to in that paragraph because of sections 8 (c) (iv) and 15 (cc) of the Inland Revenue Act of Sri Lanka 46 Switzerland An entity that is recognised or qualifies as a holding company under a law of a Swiss canton or Switzerland 47 Switzerland An entity that is recognised or qualifies as a service or auxiliary company under a law of a Swiss canton or Switzerland 48 Switzerland An entity that is recognised or qualifies as a domiciliary company under a law of a Swiss canton or Switzerland 49 Switzerland An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Switzerland in the tax accounting period referred to in that paragraph because of Article 59 of the Decree of the Federal Council on levying a Federal Direct Tax 50 Tonga An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Tonga in the tax accounting period referred to in that paragraph because of the provisions of the Tonga Off-Shore Banking Act 1984 51 Turkey An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Turkey in the tax accounting period referred to in that paragraph because of Articles 8 (4), 8 (6), 8 (7), 8 (8) or 8 (10) of Law 5422 of 3 June 1949 of Turkey 52 Western Samoa An entity that derives income or profits during the relevant period referred to in paragraph 152D (1) (c) if the income or profits are subject to a reduction of tax under a tax law of Western Samoa in the tax accounting period referred to in that paragraph because of the provisions of the International Insurance Act 1988, the International Trusts Act 1987 or the Offshore Banking Act 1987 of Western Samoa 1991 No. 20 INCOME TAX REGULATIONS (AMENDMENT) - SCHEDULE 10 SCHEDULE 10 Regulation 152J LISTED COUNTRIES FOR THE PURPOSES OF PART X OF THE ACT Austria Myanmar Bangladesh Netherlands Belgium New Caledonia Brazil New Zealand Brunei Norway Bulgaria Pakistan Canada Papua New Guinea China Philippines Czechoslovakia Poland Denmark Portugal Fiji Romania Finland Saudi Arabia France Singapore French Polynesia Solomon Islands German Democratic Republic Spain Germany, Federal Republic Sri Lanka of Sweden Greece Switzerland Hungary Taiwan Iceland Thailand India Tokelau Indonesia Tonga Ireland Turkey Israel Tuvalu Italy Union of Soviet Socialist Republics Japan United Kingdom of Great Britain and Kenya Northern Ireland Kiribati United States of America Korea, Republic of Western Samoa Luxembourg Yugoslavia Malaysia Zimbabwe Malta 1991 No. 20 INCOME TAX REGULATIONS (AMENDMENT) - REG 6 6. Application 6.1 For the purposes of the provisions of the Act other than section 23AH, Division 6AAA of Part III, Division 6 of Part X and Division 7 (other than Subdivision D) of Part X of the Act: (a) paragraph 152D (1) (b), but only in respect of the application of that paragraph to offshore income; and (b) paragraph 152D (1) (c) in its application in respect of the entities referred to in items 3, 5, 20, 22, 29, 30, 39, 48, 49, 50 and 52 of Part 2 of Schedule 9; apply from 13 September 1990. 6.2 For the purposes of Subdivision D of Division 7 of Part X of the Act and section 53 of the Taxation Laws Amendment (Foreign Income) Act 1990, regulations 152D, 152J and 152K and Schedule 9 apply in respect of the statutory accounting period of a CFC that commences on or after 1 July 1983. 6.3 For the purposes of section 23AH of the Act: (a) paragraph 152D (1) (b), but only in respect of the application of that paragraph to offshore income; and (b) paragraph 152D (1) (c) in its application in respect of the entities referred to in items 3, 5, 20, 22, 29, 30, 39, 48, 49, 50 and 52 of Part 2 of Schedule 9; apply in respect of a year of income of the taxpayer that commences on or after 13 September 1990. 6.4 For the purposes of Division 6AAA of Part III of the Act: (a) paragraph 152D (1) (b), but only in respect of the application of that paragraph to offshore income; and (b) paragraph 152D (1) (c) in its application in respect of the entities referred to in items 3, 5, 20, 22, 29, 30, 39, 48, 49, 50 and 52 of Part 2 of Schedule 9; apply in respect of a year of income of a non-resident trust estate that commences on or after 13 September 1990. 6.5 For the purposes of Division 6 of Part X of the Act: (a) paragraph 152D (1) (b), but only in respect of the application of that paragraph to offshore income; and (b) paragraph 152D (1) (c) in its application in respect of the entities referred to in items 3, 5, 20, 22, 29, 30, 39, 48, 49, 50 and 52 of Part 2 of Schedule 9; apply in respect of an accounting period of a company that commences on or after 13 September 1990. 6.6 For the purposes of Division 7 (other than Subdivision D) of Part X of the Act: (a) paragraph 152D (1) (b), but only in respect of the application of that paragraph to offshore income; and (b) paragraph 152D (1) (c) in its application in respect of the entities referred to in items 3, 5, 20, 22, 29, 30, 39, 48, 49, 50 and 52 of Part 2 of Schedule 9; apply in respect of a statutory accounting period of a CFC that commences on or after 13 September 1990. 6.7 In this regulation, unless the contrary intention appears, "the Act" means the Income Tax Assessment Act 1936. - NOTES 1991 No. 20*1* INCOME TAX REGULATIONS*2* (AMENDMENT) *1*Notified in the Commonwealth of Australia Gazette on 20 February 1991. *2*Statutory Rules 1936 No. 94 as amended by 1939 Nos. 6 and 42; 1940 Nos. 138 and 289; 1941 Nos. 120 and 327; 1942 Nos. 339 and 553; 1943 Nos. 80, 127 and 151; 1944 Nos. 90 and 124; 1945 Nos. 12, 85, 169 and 192; 1946 No. 135; 1947 Nos. 77 and 173; 1948 Nos. 115 and 162; 1949 Nos. 25 and 50; 1950 Nos. 63 and 101; 1951 Nos. 136 and 157; 1952 Nos. 89, 90 and 102; 1953 Nos. 55 and 88; 1954 Nos. 11, 99 and 112; 1955 No. 23; 1956 Nos. 34, 35 and 96; 1957 Nos. 39 and 74; 1958 Nos. 27 and 70; 1959 Nos. 25 and 81; 1960 Nos. 44 and 74; 1962 Nos. 15, 44 and 112; 1963 Nos. 53 and 92; 1964 Nos. 74, 121 and 134; 1965 Nos. 133 and 187; 1966 No. 156; 1967 Nos. 112 and 126; 1968 No. 1; 1969 No. 68; 1970 Nos. 43, 126, 168 and 213; 1971 Nos. 120 and 148; 1972 Nos. 48, 50 and 137; 1973 No. 266; 1974 Nos. 193, 226 and 267; 1975 Nos. 88, 89, 99, 101 and 213; 1976 Nos. 115, 188 and 212; 1977 Nos. 77, 107 and 248; 1978 Nos. 85 and 193; 1979 Nos. 126 and 239; 1980 Nos. 86, 137 and 149; 1981 Nos.116 and 360; 1982 Nos. 115, 128, 267 and 280; 1983 Nos. 79, 87, 111, 213 and 319; 1984 Nos. 172, 286, 408, and 416; 1985 Nos. 21, 148, 274 and 278; 1986 No. 325 and Acts Nos. 28, 49 and 112, 1986; 1987 Nos. 92 and 120; 1988 Nos. 196, 208, 262, 381, 382, 383 and 384 and Act No. 97, 1988; 1989 Nos. 67, 80, 115, 123, 124, 141, 250 and 358; 1990 Nos. 19, 126, 151, 152, 192, 347, 390, 398 and 468.