Income Tax Assessment Act 1936

For the purposes of this Act, a company (other than a company in the capacity of trustee) is a dual resident investment company in relation to a year of income if:

at any time during the year of income the company is a resident of Australia; and

the company is liable to tax in a foreign country in respect of some or all of the income or profits of the company of the year of income (or would be so liable if the company derived income or profits) because:

the company is treated as a resident of that country for the purposes of the relevant law of that country; or

the company is treated as domiciled in that country for the purposes of the relevant law of that country; or

the company’s management and control is treated as being located in that country for the purposes of the relevant law of that country; and

at any time during the year of income when the company was in existence:

the company was not carrying on business with a reasonable view to profit; or

a substantial purpose of the company (whether or not stated in its constituent document) was to acquire or hold shares, securities or other investments in related companies (whether directly or indirectly through one or more companies, partnerships or trusts).

For the purposes of this section, companies are related to each other if they are controlled (as defined by subsection (3)) by the same person, either alone or together with associates (whether or not the same associates are involved in relation to each company).

For the purposes of this section, a person, either alone or together with associates, controls a company if:

the person, either alone or together with associates:

controls or is capable of controlling, either directly or through one or more interposed companies, partnerships or trusts, at least 50% of the maximum number of votes that might be cast at a general meeting of the company; or

is beneficially entitled to receive, directly or indirectly, at least 50% of any dividends that are or might be paid, or of any distribution of capital that is or may be made, by the company; or

is capable, under a scheme, of gaining such control or such an entitlement; or

the company or its directors are accustomed or under an obligation (whether formal or informal), or might reasonably be expected, to act in accordance with the directions, instructions or wishes of the person, either alone or together with associates.

Section 159GZH applies for the purposes of this section in determining the beneficial entitlement of a person to receive indirectly the whole or a particular fraction of a dividend that is, or might be, paid by a company or of a distribution of capital of a company.

In this section:

any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and

any scheme, plan, proposal, action, course of action or course of conduct, whether there are 2 or more parties or only one party involved.