Published on 01 Jan 06
by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
In the global economy, controlled foreign companies (“CFC”) rules must protect the Australian tax base from abuse involving tax havens and preferential regimes but, at the same time, must not hinder Australian multinationals in the establishment of genuine offshore operations. While Australia’s CFC rules were introduced in 1990, the broad design of the rules followed that developed in other countries in preglobalisation times. This article analyses the key design features of Australia’s CFC rules (including recent reforms) to determine whether the design is appropriate in the global economy and, where it is not, the article makes recommendations for reform.