New International Tax Arrangements (Foreign-owned Branches and Other Measures) Act 2005 (64 of 2005)

Schedule 3   Australian permanent establishments of foreign financial entities

Part 3   Thin capitalisation

Income Tax Assessment Act 1997

30   Subsections 820-613(3) and (4)

Repeal the subsections, substitute:

(3) The amount worked out under this subsection as at a particular day is the total of the amounts worked out under the following paragraphs for each of the establishment entity's *Australian permanent establishments that section 820-603 treats as part of the *head company or single company on that day:

(a) so much of the establishment entity's *ADI equity capital, at the end of the day, as:

(i) is attributable to that Australian permanent establishment; and

(ii) has not been allocated to the *OB activities of the entity;

(b) the amounts that, as at the end of that day:

(i) are made available by the establishment entity to the Australian permanent establishment as loans to it; and

(ii) do not give rise to any *debt deductions of the entity for the income year or any other income year.

Note: The amounts are to be worked out, so far as practicable, on the basis of the information that would be contained in a set of consolidated accounts. See section 820-611.

Risk-weighted assets

(4) For each of the establishment entity's *Australian permanent establishments that is covered by the choice, the *risk-weighted assets of the *head company or single company include that part of the entity's risk-weighted assets that:

(a) is attributable to that Australian permanent establishment; and

(b) is not attributable to the entity's *OB activities.