A decision of the Federal Court of Australia has been published concerning whether interest income of a CFC should be reported as derived for tax purposes on an accruals (earnings) basis or a cash (receipts) basis. The case involves News Australia Holdings Pty Ltd. as the provisional head company of a group that included SRC Holdings Limited, a controlled foreign company in the Cayman Islands, which was wholly owned by News Limited.
Under a loan agreement between SRC and News Limited, SRC w…