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13.3.2. Definition of CFC

A foreign company which meets any of the following criteria at the end of its relevant accounting year is considered to be a CFC:

  • a group of five or fewer Australian residents (each with at least a 1% control interest) have a combined control interest (defined to include total paid-up share capital, voting rights in respect of certain decisions and the right to capital or profit distributions on winding up or otherwise) in at least 50% of the company;
  • a single Australian entity and its associates has a minimum 40% control interest in the company; or
  • a group of five or fewer Australian entities (including an Australian resident partnership or trust) effectively control the company, either alone or together with their associates.