INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VI - COLLECTION AND RECOVERY OF TAX  

Division 4 - Collection of withholding tax  

SECTION 221YRA   INTEREST OR ROYALTY NOT ALLOWABLE DEDUCTION UNTIL PAYMENT MADE TO COMMISSIONER ON ACCOUNT OF TAX  

221YRA(1)   [When interest not deductible]  

Where:

(a) a person has not made a deduction from interest as required by subsection 221YL(2A) , or having made a deduction under that subsection from interest, has not complied with paragraph 221YN(1)(a) in relation to the deduction; and

(b) any withholding tax payable in respect of the interest has not been paid,

then, subject to subsection (2), the interest is not an allowable deduction.

221YRA(1A)   [When royalty not deductible]  

If:

(a) a person:

(i) has not made a deduction from a royalty as required by subsection 221YL(2G) ; or

(ii) having made a deduction under that subsection from a royalty, has not complied with paragraph 221YN(1)(a) in relation to the deduction; and

(b) any withholding tax payable in respect of the royalty has not been paid;

then, subject to subsection (2), the royalty is not an allowable deduction.

221YRA(2)   [Withholding tax paid]  

Where, any interest or royalty would, but for subsection (1) or (1A), be an allowable deduction in respect of a year of income and the withholding tax payable in respect of the interest or royalty is paid, the interest or royalty thereupon becomes an allowable deduction in respect of that year of income.

221YRA(3)   [Partner not resident]  

Where a member of a partnership is not a resident, then, for the purpose of calculating the amount that, in relation to him, is, for the purposes of Division 5 of Part III , the net income of the partnership or the partnership loss, as the case requires, subsections (1) and (1A) apply in relation to the partnership as if it were a person who is not a resident.