The Role of CFC Legislation in Protecting Australia's Domestic Income Tax Base

This thesis, awarded a Doctor of Juridical Studies in 1997, examines how the then recently introduced controlled foreign company (CFC) rules operate to protect Australia's domestic tax base in relation to passive income derived by Australian resident taxpayers from foreign direct investments in low tax jurisdictions. Focussing specifically on interest and dividend income, which is easily manipulated to give what otherwise would have been Australian source income an artificial foreign source thus escaping Australia's tax net, the thesis further illustrates how the new regime interacts with (i) tax rules targeting related party income, which is shifted to low tax jurisdictions through the use of artificial transfer prices and (ii) existing unilateral and bilateral measures for alleviating double taxation. The thesis additionally examines and compares the United States (US) Subpart F rules, which are the most developed of all the 17 nations that currently operate CFC regimes, having been first enacted as part of the Revenue Act of 1962 and reformed in 1986 to significantly expand coverage