INCOME TAX ASSESSMENT ACT 1997 (ARCHIVE)

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-F - Thin capitalisation rules for resident TC groups  

Operative provisions

SECTION 820-458 (ARCHIVE)   Choice by foreign bank to include its Australian permanent establishments in the resident TC group  

820-458(1)    
If:

(a) the *top entity makes the choice referred to in section 820-455 ; but

(b) subsection 820-455(2) would have prevented the choice if the potential group members had included an *Australian permanent establishment of a *foreign bank;

the foreign bank cannot make a choice under paragraph 820-515(c) that would result in the *resident TC group including that Australian permanent establishment.

Note:

Subdivision 820-FB allows the head company of a consolidated group or MEC group, or a single Australian company that cannot form such a group, to choose to treat as part of itself certain Australian permanent establishments of a foreign bank.

Section 820-603 then treats an Australian permanent establishment covered by the choice as an entity, and as a member of a consolidated group or MEC group, for the purposes of this Division. This means that the Australian permanent establishment in effect becomes a member of a consolidated group or MEC group, which then triggers the operation of item 1 or 2 in the table in subsection 820-455(1) .

820-458(2)    
If:

(a) the *top entity makes the choice referred to in section 820-455 ; and

(b) a *foreign bank makes a choice under paragraph 820-515(c) (that does not contravene subsection (1) of this section);

sections 820-456 and 820-457 apply (and are taken always to have applied) as if the potential group members included each *Australian permanent establishment included in the *resident TC group because of the choice under paragraph 820-515(c) .

Note:

This subsection will only change the effect of this section in a situation of the kind described in the note to subsection (1) of this section.