Public advice and guidance compendium
TD 2017/21EC
Compendium
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Please note that the PDF version is the authorised version of this ruling.
| This edited version of the Compendium of Comments is not intended to be relied upon. It provides no protection from primary tax, penalties, interest or sanctions for non-compliance with the law. |
This is a compendium of responses to the issues raised by external parties to draft Taxation Determination TD 2016/D6 Income tax: where an Australian corporate tax entity is a partner in a partnership, can the partnership 'hold' a direct control interest (within the meaning of section 350 of the Income Tax Assessment Act 1936) in a foreign company for the purpose of Subdivision 768-A of the Income Tax Assessment Act 1997.
This compendium of comments has been edited to maintain the anonymity of entities that have commented.
Summary of issues raised and responses
| Issue No. | Issue raised | Tax Office Response/Action taken |
|---|---|---|
| 1. | The interpretation and approach adopted in the draft Taxation Determination is appropriate. | Noted. |
| 2. | The test time for determining whether there is a participation interest should be highlighted in the draft Taxation Determination. | The relevant test time is set out in the Example (see paragraph 10) and in the Explanation section (see paragraph 20). |
| 3. | The draft Taxation Determination should cross reference the related guidance in draft Taxation Ruling TR 2016/D2 Income tax: distributions from foreign companies - meaning of 'at the time the distribution is made' when applying the participation test and draft Taxation Determination TD 2016/D7 Income tax: where an Australian corporate tax entity is a beneficiary of a trust, can the trust be taken to 'hold' a direct control interest (within the meaning of section 350 of the Income Tax Assessment Act 1936 ) in a foreign company for the purpose of Subdivision 768-A of the Income Tax Assessment Act 1997?
It would also be desirable to briefly highlight that the effective dates for determining whether there is a participation interest in respect of indirect holdings is different for holdings through partnerships and trusts. |
We have added a reference to the related guidance in footnotes 6 and 10.
The reader is directed to the relevant guidance where the interposed entity is a trust rather than a partnership. |
| 4. | The draft Taxation Determination should clarify the meaning of 'partnership' and that it covers the tax law definition of partnership in section 995-1 of the ITAA 1997. | The meaning of partnership has been clarified in footnote 2 which also explains that the Determination does not cover situations where the interposed entity is a corporate limited partnership (see also footnote 6). |
| 5. | The decision to make the Determination retrospective from the date that Subdivision 768-A commenced (distributions made on or after 17 October 2014) should be appropriate in most cases. | Noted. |
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