Tax Laws Amendment (2007 Measures No. 4) Act 2007 (143 of 2007)

Schedule 1   New foreign income tax offset rules

Part 4   Consequential and other amendments

Income Tax Assessment Act 1997

163   Subdivision 717-A

Repeal the Subdivision, substitute:

Subdivision 717-A - Foreign income tax offsets

717-1 What this Subdivision is about

If an entity becomes a subsidiary member of a consolidated group, the head company receives any tax offsets under section 770-10 that arise because the entity pays foreign income tax while it is a subsidiary member of the group.

Table of sections

Object

717-5 Object of this Subdivision

Foreign income tax on amounts in head company's assessable income

717-10 Head company taken to be liable for subsidiary member's foreign income tax

Object

717-5 Object of this Subdivision

The object of this Subdivision is to allow the *head company of a *consolidated group to get the benefit of *foreign income tax paid in respect of amounts included in the head company's assessable income because another entity is or was a *subsidiary member of the group.

Foreign income tax on amounts in head company's assessable income

717-10 Head company taken to be liable for subsidiary member's foreign income tax

(1) This section operates if:

(a) an entity was a *subsidiary member of a *consolidated group for all or part of an income year; and

(b) an amount was included in the *ordinary income or *statutory income of the *head company of the group for that income year; and

(c) the entity paid *foreign income tax (except *credit absorption tax or *unitary tax) in respect of the amount.

(2) Division 770 operates as if:

(a) the *head company had paid the *foreign income tax; and

(b) the entity had not paid the foreign income tax.

Note: Division 770 provides a tax offset for foreign income tax paid.

(3) This section does not limit the operation of Division 770.