Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 832 - Hybrid mismatch rules  

Subdivision 832-C - Hybrid financial instrument mismatch  

Operative provisions

SECTION 832-215   Hybrid mismatch  

832-215(1)    
A payment gives rise to a hybrid mismatch if:

(a) the payment is made under any of the following:

(i) a *debt interest;

(ii) an *equity interest;

(iii) a *derivative financial arrangement;

(iv) an *arrangement covered by subsection (2); and

(b) the payment might reasonably be expected to give rise to a *deduction/non-inclusion mismatch; and

(c) the mismatch that might reasonably be expected to arise, or a part of that mismatch, meets a hybrid requirement in section 832-220 or 832-225 .

Transfers of financial instruments

832-215(2)    
An *arrangement is covered by this subsection if:

(a) the arrangement is any of the following:

(i) a reciprocal purchase agreement (otherwise known as a repurchase agreement);

(ii) a securities lending arrangement;

(iii) a similar arrangement; and

(b) an entity acquires any of the following under the arrangement:

(i) a *debt interest;

(ii) an *equity interest;

(iii) a *derivative financial arrangement.

Amount of the hybrid mismatch

832-215(3)    
The amount of the *hybrid mismatch is:

(a) the amount of the *deduction/non-inclusion mismatch, unless paragraph (b) applies; or

(b) if only a part of the deduction/non-inclusion mismatch meets a hybrid requirement mentioned in paragraph (1)(c) - the amount of that part of the deduction/non-inclusion mismatch.