Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019 (34 of 2019)

Schedule 1   Non-concessional MIT income

Part 1   Main amendments

Income Tax Assessment Act 1997

2   At the end of Division 25

Add:

25-115 Deduction for payment of rent from land investment by operating entity to asset entity in relation to approved economic infrastructure facility

(1) An entity that is an *operating entity in relation to a *cross staple arrangement can deduct an amount, for an income year, of *rent from land investment if:

(a) another entity derives or receives the amount from the operating entity:

(i) in the income year; and

(ii) on or after 27 March 2018; and

(b) the cross staple arrangement was entered into in relation to:

(i) a facility that is covered by section 12-439 in Schedule 1 to the Taxation Administration Act 1953 at a time in the income year; or

(ii) an improvement to a facility that is covered by that section at a time in the income year; and

(c) the other entity is an *asset entity in relation to the cross staple arrangement; and

(d) apart from this subsection, the operating entity could otherwise deduct the amount under this Act; and

(e) the amount is *excepted MIT CSA income of the asset entity for the income year; and

(f) each entity that is a *stapled entity in relation to the cross staple arrangement has made a choice in accordance with subsection (3).

(2) If the *asset entity is not a *managed investment trust in relation to the income year, for the purposes of paragraph (1)(e), treat it as a managed investment trust in relation to the income year.

(3) An entity makes a choice in accordance with this subsection if:

(a) the entity makes the choice in the *approved form; and

(b) the entity makes the choice before:

(i) the start of the income year in which the asset is first put to use; or

(ii) a later time allowed by the Commissioner; and

(c) the entity gives the choice to the Commissioner within 60 days after the entity makes the choice.

(4) The choice cannot be revoked.

25-120 Transitional - deduction for payment of rent from land investment by operating entity to asset entity

(1) This section applies if the requirements in subsection 12-440(1) or (2) in Schedule 1 to the Taxation Administration Act 1953 are satisfied in relation to a *cross staple arrangement.

(2) An entity that is an *operating entity in relation to the *cross staple arrangement can deduct, for an income year, an amount of *rent from land investment if:

(a) another entity derives or receives the amount from the operating entity at a time that:

(i) is in the income year; and

(ii) is on or after 27 March 2018; and

(iii) meets the requirements in subsection 12-440(4) of Schedule 1 to the Taxation Administration Act 1953; and

(b) the other entity is an *asset entity in relation to the cross staple arrangement; and

(c) apart from this subsection, the operating entity could otherwise deduct the amount under this Act; and

(d) the amount is *excepted MIT CSA income of the asset entity for the income year.

(3) If the *asset entity is not a *managed investment trust in relation to the income year, for the purposes of paragraph (2)(d), treat it as a managed investment trust in relation to the income year.