New Business Tax System (Consolidation and Other Measures) Act (No. 1) 2002 (117 of 2002)

Schedule 15   Consolidation: foreign tax credits

New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002

4   At the end of Schedule 10

Add:

5 Modification of basic rule

(1) This item applies to a taxpayer instead of item 2 if the taxpayer:

(a) has a substituted accounting period; and

(b) is not a member of a consolidated group or a MEC group.

(2) Section 160AFE of theIncome Tax Assessment Act 1936 as amended by this Schedule applies to the taxpayer from 1 July 2003. That section applies from 1 July 2003 until the start of the taxpayer's next income year as if that period were an income year.

(3) Section 160AFE of theIncome Tax Assessment Act 1936 as in force just before the commencement of this Schedule (the old section 160AFE ) applies to the taxpayer from the start of the taxpayer's income year in which 1 July 2003 occurs until the end of 30 June 2003 as if that period were an income year.

6 Consolidation day on or after 1 July 2002 and before 1 July 2003

(1) This item applies to a taxpayer instead of item 3 if:

(a) the taxpayer becomes the head company of a consolidated group or MEC group on the day (also the consolidation day ) the group comes into existence; and

(b) the consolidation day is on or after 1 July 2002 and before 1 July 2003 and is not the start of an income year (whether or not the taxpayer has a substituted accounting period).

(2) Section 160AFE of theIncome Tax Assessment Act 1936 as amended by this Schedule applies to the taxpayer from the consolidation day. That section applies from the consolidation day until the end of the taxpayer's income year in which that day occurs as if that period were an income year.

(3) If:

(a) the consolidation day is after 1 July 2002; and

(b) the taxpayer does not have a substituted accounting period;

the old section 160AFE applies to the taxpayer from 1 July 2002 until just before the consolidation day. If the taxpayer so chooses, it applies as if that period were an income year.

(4) If the taxpayer has a substituted accounting period, the old section 160AFE applies to the taxpayer from the start of the taxpayer's income year in which the consolidation day occurred until just before the consolidation day. If the taxpayer so chooses, it applies as if that period were an income year.

7 Consolidation day on or after 1 July 2003

(1) This item applies to a taxpayer instead of item 2 if:

(a) the taxpayer has a substituted accounting period; and

(b) the taxpayer becomes the head company of a consolidated group or MEC group on the day (also the consolidation day ) the group comes into existence; and

(c) the consolidation day is on or after 1 July 2003 and is not the start of the taxpayer's next income year.

(2) Section 160AFE of theIncome Tax Assessment Act 1936 as amended by this Schedule applies to the taxpayer from 1 July 2003. That section applies from 1 July 2003 until the start of the taxpayer's next income year as if that period were an income year.

(3) The old section 160AFE applies to the taxpayer from the start of the taxpayer's income year in which 1 July 2003 occurs until the end of 30 June 2003. If the taxpayer so chooses, it applies as if that period were an income year.

8 Applying old section 160AFE to part years

(1) Subitem (2) has effect for the purposes of applying the old section 160AFE:

(a) to a taxpayer as mentioned in item 5, 6 or 7; and

(b) for a period that is shorter than an income year.

(2) The requirement in paragraph (1D)(b) of that section that the income company be a group company in relation to the credit company in relation to the current year of income has effect as if it were a requirement that the income company be a group company in relation to the credit company:

(a) continuously for a period of at least 12 months ending on the day before the day on which section 160AFE of theIncome Tax Assessment Act 1936 as amended by this Schedule starts to apply to the taxpayer; or

(b) from the time when the income company and the credit company were both in existence, if that period is shorter.

9 Applying old section 160AFE to non-membership periods

(1) Subitem (2) has effect for the purposes of applying the old section 160AFE to a taxpayer that:

(a) becomes a subsidiary member of a consolidated group or MEC group; and

(b) has a period referred to in section 701-30 as a non-membership period.

(2) The requirement in paragraph (1D)(b) of the old section 160AFE that the income company be a group company in relation to the credit company in relation to the current year of income has effect as if it were a requirement that the income company be a group company in relation to the credit company:

(a) continuously for a period of at least 12 months ending on the last day of the non-membership period; or

(b) from the time when the income company and the credit company were both in existence, if that period is shorter.

10 Parts of income years not earlier income years

Any period that is shorter than an income year and that is treated as if it were an income year for the purposes of item 5, 6 or 7 of this Schedule is taken not to be an earlier income year for the purposes of section 160AFE of theIncome Tax Assessment Act 1936 as amended by this Schedule.