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Zulu is a company incorporated in Australia and is the head company of a consolidated group. It owns all the shares in three companies. Romeo, Sierra and Tango. Zulu holds 100% of the shares in Romeo and Sierra directly, but holds 100% of the shares in Tango indirectly through Sierra as the intermediate holding company. Romeo and Sierra are both incorporated in Australia, but Tango is incorporated in the US. Johnny is the new chief financial officer of the company group. He is preparing tax filings for the group and is not sure about some tax implications. He approaches you for advice. When Johnny was explaining the group structure, you asked for more information about Tango as it is a foreign entity which may have additional tax exposures. Johnny confirmed that the majority of directors of Tango are US citizens and the board meetings are always held in the US. The company is responsible for the marketing and sales operations of the group in the US and has no operation in Australia. Johnny provided the following financial information to you regarding the group in this income year. - Zulu received $5M dividends from Romeo and $6 million from Sierra. - Romeo incurred $68M expenses in the manufacturing of the group's products, which were sold to Sierra for \$90M. - Sierra sold the products to end customers for $110M. Besides the purchase costs for the products paid to Romeo, it also paid selling expenses of $7M and $2M to Tango and unrelated entities respectively. Sierra solo a piece of land for a gain of $15M calculated based on the purchase cost of $10M. Johnny advised that the reset cost base of the land was $12M. The company also received $3M dividends from Tango, and paid $1M interest expense on a loan that was used to finance the acquisition of Tango. The only income of Tango is the marketing fee received from Sierra. Its expenses totalled $1M. Your esearch into the commercial databases reveals that the normal profit margin of a comparable company in dustry is 10% xplain the Australian income tax implications of the above transaction and calculate the income tax paya Zulu for this income year. In your calculation, assume that the ATO does not make any transfer pricing liustments. You are NOT required to analyse any tax implication arising from the CFC regime