Taxation Determination
TD 93/216
Income tax: Offshore Banking Units (OBU) - is an OBU entitled to concessional tax treatment for income derived on a success only basis from offshore banking (OB) advisory activities which were entered into prior to the entity being registered as an OBU?
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FOI status:
may be releasedFOI number: I 1216513| This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). |
1. Yes, where the fee income is derived after the entity has been registered as an OBU.
2. When an entity earns fee income for completing an assignment on a success only basis, the OB income is derived on the date that the assignment was completed and the entity becomes entitled to its fee. Accordingly, income derived after the date of registration of the OBU upon successful completion of an assignment that otherwise qualifies as an OB activity will constitute OB income. This is the case notwithstanding that some work may have been done prior to registration provided that this work itself did not give rise to an entitlement to income.
3. This situation is different to that described in TD 93/133. The difference between the two cases is in the timing of the derivation of income. A success only basis means that the income is derived upon successful completion of the project - in this case, after the entity is registered as an OBU; whereas, the income derived in TD 93/133 accrues to the entity prior to registration as an OBU.
Commissioner of Taxation
28/10/93
Previously issued as Draft TD 93/D214
References
ATO references:
NO NAT 93/3707-5
Related Rulings/Determinations:
TD 93/131 OB activities entered into by an OBU prior to 1 July 1992
TD 93/133 OB activities entered into by an OBU prior to registration as an OBU
Subject References:
Offshore banking
OBUs
advisory activity
Legislative References:
ITAA Pt III Div 9A
| Date: | Version: | Change: | |
| You are here | 28 October 1993 | Original ruling | |
| 13 October 2021 | Consolidated ruling | Addendum |