2.6 What does “the direct income interest of less than 10%” mean?
A person has a direct income interest of less than 10% in a foreign company at any time if they hold,
· Less than 10% of the shares in the foreign company;
· Less than 10% of the shareholder decision-making rights for the company;
· Less than 10% of a right to receive, or to apply, any of the income of the company for the accounting period in which the time falls;
· Less than 10% of a right to receive, or to apply, any of the value of the net assets of the company if they are distributed.
The highest percentage you hold in any of the above categories will be your direct income interest.
A person does not have an attributing interest in a FIF (See 2.4) if they have an income interest of 10% or more in a controlled foreign company (including any interests held by associated persons). The person will instead have a CFC (Controlled Foreign Company) interest and will apply the CFC rules to that interest. Read more here
Disclaimer: The content of this page is for educational purposes only. It is designed to help you understand the potential tax obligations that may apply to you when investing in financial products. Tiger Broker does not provide any advice, including tax advice, and is not responsible for providing any guidance, opinions, or suggestions about tax for you. If you have any questions about your personal circumstances and tax obligation, we suggest you contact your tax advisor directly for more information.