Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 832 - Hybrid mismatch rules  

Subdivision 832-A - Preliminary  

Operative provisions

SECTION 832-20   Losses that arise from payments or parts of payments  

832-20(1)    
This section applies if:

(a) a loss gives rise to:

(i) a deduction for an entity (the payer ) for an income year; or

(ii) a *foreign income tax deduction for an entity (also the payer ) for a *foreign tax period; and

(b) in working out the amount of the loss:

(i) all or a part of a payment made, or to be made, to one or more other entities is taken into account; or

(ii) 2 or more payments made, or to be made, to one or more other entities are taken into account.

Note:

This section also applies to losses from Division 230 financial arrangements: see section 832-780 .

Payments made to only one entity

832-20(2)    
If, in working out the amount of the loss, a payment or payments made to only one entity (the recipient ) are taken into account, this Division applies as if:

(a) at the end of the income year or *foreign tax period identified in paragraph (1)(a), the payer made a payment to the recipient; and

(b) the amount of the payment was equal to the amount of the deduction or *foreign income tax deduction; and

(c) the payment gave rise to the deduction or foreign income tax deduction.

Payments made to 2 or more entities

832-20(3)    
If, in working out the amount of the loss, a payment or payments made to 2 or more entities (each of which is a recipient ) are taken into account, this Division applies as if:

(a) at the end of the income year or *foreign tax period identified in paragraph (1)(a), the payer made a payment to each recipient; and

(b) the amount of each payment was equal to so much of the amount of the deduction or *foreign income tax deduction as is reasonable having regard to the amounts of the payments actually made to the recipients; and

(c) the payment gave rise to a deduction or foreign income tax deduction equal to the amount of the payment.

Working out whether the payment has been subject to tax

832-20(4)    
In working out for the purposes of this Division the extent to which a payment that is taken by this section to have been made is *subject to Australian income tax or *subject to foreign income tax, regard is to be had to the actual payments made to the recipient.