Foreign tax credits of controlled foreign companies - transitions

2012 amendment to transitional provisions dealing with foreign tax credits arising under old international tax rules, and being carried forward under new rules.

Section LK 5B

Transitional provisions dealing with foreign tax credits arising under the old international tax rules, and being carried forward under the new international tax rules, have been reworded to ensure the policy intent of these provisions is realised.

Subsections LK 5B(1) and LK 5B(2)

These provisions are intended to reduce carried-forward foreign tax credits of controlled foreign companies (CFCs).

The provisions have been reworded to make clear that the transitional rule applies to all carried-forward credits, as intended.

The changes are analogous to those for carried-forward losses (see the section on carried-forward losses above).

The changes apply for income years beginning on or after 1 July 2009.