Income Tax Assessment Act 1936

Part XI repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. No 114 of 2010, Sch 1 item 95 contains the following saving provisions:

95 Saving of regulations relating to stock exchanges  
95
Despite the repeal of the definition of approved stock exchange in section 470 of the Income Tax Assessment Act 1936 by item 37 of this Schedule, regulations made for the purposes of that definition that were in force immediately before this item commences continue in force on and after that commencement as if those regulations had been made for the purposes of the definition of approved stock exchange in the Income Tax Assessment Act 1997 as inserted by item 81 of this Schedule. 96 Saving of elections relating to foreign hybrids  
96
Despite the repeal of subsection 485AA(1) of the Income Tax Assessment Act 1936 by item 37 of this Schedule, elections made under that subsection continue to have effect on and after the commencement of this Schedule as if that repeal had not happened.

Part XI inserted by No 190 of 1992.

Div 3 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.

S 500 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading. S 500 formerly read:

SECTION 500 BALANCE-SHEET METHOD  
500(1)
The balance-sheet method involves determining the extent to which a foreign company's assets were for use in eligible activities by reference to a relevant balance-sheet of the company and, if appropriate, of its subsidiaries prepared as at the test time in relation to a notional accounting period.

500(2)
If, at the test time, the gross value of the foreign company's assets for use in eligible activities was 50% or more of the gross value of all of the company's assets, the company is taken, for the purposes of the application of section 497 in relation to the taxpayer, to have been principally engaged in eligible activities at that time.

500(3)
If, at the test time, a company ( ``the holding company'' ) was the direct or indirect owner of 50% or more of the paid-up share capital of another company ( ``the subsidiary company'' ), the following paragraphs apply:

(a) the gross value at the test time of the holding company's assets for use in eligible activities includes the amount worked out using the formula:

Gross value of subsidiary's eligible assets

×

Interest in share capital   Total share capital

(b) the gross value at the test time of all the holding company's assets does not include the gross value of the shares in the subsidiary company owned by the holding company but includes the amount worked out using the formula:

Gross value of subsidiary's assets

×

Interest in share capital   Total share capital

In the formulas:

`` Gross value of subsidiary's eligible assets '' means the gross value at the test time of the subsidiary company's assets for use in one or more eligible activities;

`` Gross value of subsidiary's assets '' means the gross value at the test time of all the subsidiary company's assets;

`` Interest in share capital '' means the amount of the share capital of the subsidiary company that was owned by the holding company;

`` Total share capital '' means the total amount of the share capital of the subsidiary company.

500(4)
Subsection (3) applies in relation to the subsidiary company whether the subsidiary company engages in eligible activities or activities that are not eligible activities, or both.

500(5)
In subsection (3):

(a) any reference to the holding company's assets does not include:

(i) in the case of the reference in paragraph (3)(a) - a reference to so much of the holding company's assets for use in eligible activities that comprise debts due or other amounts payable to the holding company by the subsidiary company, or by any company interposed between the holding company and the subsidiary company, as are related to the subsidiary company's assets whose gross value is included in the gross value of the holding company's assets for use in eligible activities; or

(ii) in the case of the reference in paragraph (3)(b) - a reference to so much of all the holding company's assets that comprise debts due or other amounts payable to the holding company by the subsidiary company, or by any company interposed between the holding company and the subsidiary company, as are related to the subsidiary company's assets whose gross value is included in the gross value of all the holding company's assets; and

(b) any reference to the subsidiary company's assets does not include a reference to:

(i) shares owned by the subsidiary company in another company that is a subsidiary of the holding company by virtue of Division 6 of Part 1.2 of the Corporations Act 2001 ; or

(ii) assets comprising debts or other amounts payable to the subsidiary company by:

(A) the holding company; or

(B) any company interposed between the subsidiary company and the holding company; or

(C) any other company that is a subsidiary of the holding company by virtue of Division 6 of Part 1.2 of the Corporations Act 2001 .

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History

S 500(5) amended by No 55 of 2001.

500(6)
For the purposes of subsection (3), the percentage of the paid-up share capital of the subsidiary company of which the holding company was the owner at the test time includes the percentage (if any) of that paid-up share capital of which the holding company was the indirect owner at that time, as calculated in accordance with section 501 .

500(7)
Subsections (3) to (6) apply in relation to the ownership by a company of any of the paid-up share capital of another company whether the other company's place of incorporation or establishment is the same as, or different from, the former company's place of incorporation or establishment.

500(8)
If a company had, at the test time, an interest, as a partner in a partnership, in any assets of the partnership:

(a) the gross value at that time of all of the company's assets does not include the value of the company's interest in the partnership as shown in the company's balance-sheet but includes the gross value of the company's interest in each of the partnership's assets; and

(b) the company's assets at that time that were for use in eligible activities are taken to have included the company's interests in the assets of the partnership that were for use in one or more eligible activities.

500(9)
A reference in this section to the gross value of an asset of a company at the test time is a reference to that value as shown in a balance-sheet of the company that:

(a) was prepared in accordance with commercially accepted accounting principles; and

(b) gives a true and fair view of the company's financial position as at that time.

500(10)
For the purposes of this section, the gross value, at the test time, of an asset in which a company has an interest as a partner in a partnership is to be that value as shown in a balance-sheet of the partnership that:

(a) was prepared in accordance with commercially accepted accounting principles; and

(b) gives a true and fair view of the partnership's financial position as at that time.

500(11)
If, at the test time, any of the company's assets ( ``the relevant assets'' ) are for use partly in one or more eligible activities and partly for other purposes, a reference in this section to the gross value at that time of the company's assets for use in one or more eligible activities is a reference to so much only of the gross value at that time of the relevant assets as is proportionate to the extent to which they are for use at that time in one or more eligible activities.

500(12)
If an amount that, under subsection (3) or (8), is to be included in:

(a) the gross value, at the test time, of all the assets of a foreign company; or

(b) the gross value, at that time, of such of those assets as were for use at that time in one or more eligible activities;

is not expressed in the currency in which the balance-sheet applicable under subsection (9) in relation to the foreign company is expressed, the amount to be so included is the equivalent amount expressed in that currency, being the equivalent amount obtained by reference to the appropriate rate of exchange between those 2 currencies in force at that time.

500(13)
A reference in this section to an asset of a company being for use in an eligible activity is a reference to the asset being for use by the company in engaging in that activity either through its directors or employees in the performance of their duties as directors or employees or through another person pursuant to a contract or arrangement.

S 500 inserted by No 190 of 1992.