Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-FB - Grouping branches of foreign banks and foreign financial entities with a consolidated group, MEC group or single Australian resident company  

Effect of choice

SECTION 820-615   How Subdivision 820-E applies  

820-615(1)    
This section has effect for the purposes of applying Subdivision 820-E to the *head company or single company in relation to a period (the test period ) that is all or part of the grouping period.

Note:

Subdivision 820-E applies to the head company or single company if it is classified as an inward investing entity (ADI) because of section 820-609 .

Average equity capital

820-615(2)    

The average equity capital of the *head company or single company for the test period is:

(a) the average value, for that period, of all the *ADI equity capital of the company; plus

(b) the average value, for that period, of the amount worked out under subsection 820-613(3) .

Note 1:

In the case of a choice under section 820-599 , paragraph 820-603(4)(b) treats the single company and the relevant Australian permanent establishments as a consolidated group.

Note 2:

To calculate an average value for the purposes of this Division, see Subdivision 820-G .

Safe harbour capital amount

820-615(3)    

The safe harbour capital amount of the *head company or single company for the test period is worked out using the following method statement. Method statement


Risk-weighted assets

820-615(4)    

For each of the establishment entity ' s *Australian permanent establishments 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.