CHAPTER 4
-
INTERNATIONAL ASPECTS OF INCOME TAX
History
Chapter 4 inserted by No 162 of 2001.
PART 4-5
-
GENERAL
History
Part 4-5 inserted by No 162 of 2001.
Division 820
-
Thin capitalisation rules
History
Division 820 inserted by No 162 of 2001.
Subdivision 820-FA
-
How the thin capitalisation rules apply to consolidated groups and MEC groups
History
Subdiv 820-FA inserted by No 117 of 2002. For application provision see Div 820 of the
Income Tax (Transitional Provisions) Act 1997
.
Operative provisions
SECTION 820-591
Effect of transfer of FRT disallowed amount
820-591(1)
This section applies if an
*
FRT disallowed amount is transferred under section 820-590 from the joining entity to the
*
head company of the joined group.
820-591(2)
For the purposes of subsection
820-59(4)
, this Act operates (except so far as the contrary intention appears) for the purposes of income years ending after the joining time as if the head company had the
*
FRT disallowed amount for the income year in which the joining time occurs.
820-591(3)
For the purposes of applying subsection
820-59(4)
in relation to the *FRT disallowed amount, treat the disallowance year mentioned in paragraph
820-59(4)(b)
as starting at the time of the transfer.
History
S 820-591 inserted by No 23 of 2024, s 3 and Sch 2 item 88, effective 1 July 2024. For application provisions, see note under s
705-60
.
Former s 820-591 repealed by No 101 of 2006, s 3 and Sch 3 item 17, effective 1 January 2008. S 820-591 formerly read:
SECTION 820-591 Effect on safe harbour capital amount if group member is foreign-controlled Australian ADI and on-lends section 128F amounts
820-591(1)
Subsection (2) has effect for the purposes of working out the *safe harbour capital amount of the *head company of a *consolidated group or of a *MEC group for a period that is all or part of an income year, if:
(a)
throughout that period, a *member (the
ADI subsidiary
) of the group is both a *wholly-owned subsidiary of a *foreign bank and an *ADI; and
(b)
the ADI subsidiary has:
(i)
issued *debentures or *debt interests covered by section 128F (which exempts interest on the debentures or debt interests from withholding tax) of the
Income Tax Assessment Act 1936
; and
(ii)
made proceeds of the debentures or debt interests available to an *Australian permanent establishment of the foreign bank, as loans to the Australian permanent establishment, for use in its Australian business;
unless a choice by the head company under section 820-597 covers the Australian permanent establishment in relation to some or all of that period.
Note:
The effect of such a choice is that the Australian permanent establishment is treated as part of the head company throughout the period covered by the choice. See subsection 820-603(3).
History
S 820-591(1) amended by No 21 of 2005.
820-591(2)
The head company
'
s *risk-weighted assets at a particular time during that period are reduced by the total amounts of proceeds of the *debentures or *debt interests that are at that time so made available by the ADI subsidiary.
History
S 820-591(2) amended by No 21 of 2005.
820-591(3)
To avoid doubt, a choice by the *head company under section 820-597 does not prevent subsection (2) of this section from having effect unless the choice covers the Australian permanent establishment in relation to some or all of that period.
820-591(4)
This section applies only to the 2002-2003 income year and to each of the next 3 income years.
Former s 820-591 inserted by No 117 of 2002. For application provision see Div 820 of the
Income Tax (Transitional Provisions) Act 1997
.
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