Update 13th September 2024: Our systems are now restored following recent technical disruption, and we’re working hard to catch up on publishing. We apologise for the inconvenience caused. Find out more
The income tax legislation contains complex accruals regimes that attribute income earned by foreign entities to Australian resident taxpayers who control them or have transferred value to them. Attribution occurs even though these taxpayers have not actually received the relevant income. This chapter outlines the basic features of the accruals regimes and the way they attribute income to certain taxpayers. The accruals regimes were introduced in the early 1990s and are based on United States measures that were originally developed in the 1960s. They are designed to prevent the deferral advantages associated with having certain kinds of income sheltered offshore in tax havens through interests held by taxpayers in foreign entities. Ordinarily, such income would be able to accumulate at low (or zero) tax rates in such entities until repatriated to Australia. The accruals measures operate to bring forward the point at which such income is taxed. Essentially, resident controllers and transferors are taxed on income earned by the relevant entities (eg companies or trusts) as those entities earn the income (ie on an accruals basis), rather than only when those entities subsequently distribute amounts (eg by way of dividends or trust distributions).
Review the options below to login to check your access.
Log in with your Cambridge Higher Education account to check access.
If you believe you should have access to this content, please contact your institutional librarian or consult our FAQ page for further information about accessing our content.