House of Representatives
New Business Tax System (Thin Capitalisation) Bill 2001
Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)Index
| Bill reference | Paragraph number |
|---|---|
| Item 1, section 405 | 4.35 |
| Item 1, section 415 | 4.40 |
| Item 1, section 820-35 | 1.39 |
| Item 1, section 820-40 | 1.57 |
| Item 1, paragraph 820-40(1)(c) | 1.63 |
| Item 1, subsection 820-40(2) | 1.61 |
| Item 1, paragraph 820-40(2)(f) | 1.61 |
| Item 1, subsection 820-40(3) | 1.62 |
| Item 1, section 820-85 | 3.74 |
| Item 1, subsection 820-85(1) | 3.13, 3.26, 3.75 |
| Item 1, subsection 820-85(2) | 2.9, 3.18 |
| Item 1, subsection 820-85(2), items 1 and 2 in the table | 7.21, 7.22, 7.24 |
| Item 1, subsection 820-85(2), items 1(a) and (b) in the table | 3.20 |
| Item 1, subsection 820-85(2), item 2 in the table | 3.23 |
| Item 1, subsection 820-85(2), item 3 in the table | 3.20, 7.87 |
| Item 1, subsection 820-85(2), item 4 in the table | 7.87 |
| Item 1, subsection 820-85(3) | 3.29, 3.36 |
| Item 1, section 820-90 | Example 3.3 |
| Item 1, subsection 820-90(1) | 3.40 |
| Item 1, subsection 820-90(2) | 3.41, 3.62, 3.63 |
| Item 1, section 820-95 | 3.44, 3.46 |
| Item 1, section 820-100 | 3.55 |
| Item 1, subsection 820-100(1) | 3.58 |
| Item 1, subsection 820-100(2) | 3.56 |
| Item 1, subsection 820-100(3) | 3.58, 3.59 |
| Item 1, subsection 820-105(1) | 10.14 |
| Item 1, paragraph 820-105(2)(a) | 10.20 |
| Item 1, paragraphs 820-105(2)(b) to (d) | 10.21 |
| Item 1, paragraph 820-105(2)(e) | 10.24 |
| Item 1, paragraph 820-105(3)(a) | 10.35 |
| Item 1, paragraph 820-105(3)(b) | 10.37 |
| Item 1, paragraph 820-105(3)(c) | 10.42 |
| Item 1, paragraph 820-105(3)(d) | 10.43 |
| Item 1, paragraphs 820-105(3)(e) and (f) | 10.48 |
| Item 1, paragraph 820-105(3)(g) | 10.50 |
| Item 1, paragraph 820-105(3)(h) | 10.51 |
| Item 1, paragraph 820-105(3)(i) | 10.53 |
| Item 1, paragraph 820-105(3)(j) | 10.54 |
| Item 1, paragraph 820-105(3)(k) | 10.57 |
| Item 1, paragraph 820-105(3)(l) | 10.59 |
| Item 1, subsection 820-105(4) | 10.62 |
| Item 1, section 820-110 | Example 3.3, 3.65 |
| Item 1, subsections 820-110(1) and (2) | 3.66 |
| Item 1, section 820-115 | 3.74, 3.75 |
| Item 1, section 820-120 | 3.28, 3.76, 3.77 |
| Item 1, section 820-185 | 2.28 |
| Item 1, subsection 820-185(1) | 2.9, 2.21, 2.27, 2.104, 2.108 |
| Item 1, paragraph 820-185(1)(a) | 3.13 |
| Item 1, subsection 820-185(2) | 2.14 |
| Item 1, subsection 820-185(2), item 1 in the table | Example 2.6, 2.16 |
| Item 1, subsection 820-185(2), item 2 in the table | 2.17 |
| Item 1, subsection 820-185(2), item 3 in the table | 2.19 |
| Item 1, subsection 820-185(2), item 4 in the table | 2.20 |
| Item 1, subsection 820-185(3) | 2.22, 2.27, 2.35 |
| Item 1, section 820-190 | 2.29 |
| Item 1, section 820-195 | 2.33, 2.35 |
| Item 1, section 820-195, step 5 of the method statement | 2.55 |
| Item 1, subsection 820-200(1) | 2.64, 2.91 |
| Item 1, subsection 820-200(2) | 2.65 |
| Item 1, subsection 820-200(3) | 2.84 |
| Item 1, section 820-205 | 2.95 |
| Item 1, section 820-205, step 1 of the method statement | 2.97 |
| Item 1, subsection 820-210(1) | 2.99 |
| Item 1, subsection 820-210(2) | 2.100 |
| Item 1, subsection 820-210(3) | 2.100 |
| Item 1, subsection 820-215(1) | 10.14 |
| Item 1, paragraph 820-215(2)(a) | 10.20 |
| Item 1, paragraphs 820-215(2)(b) to (d) | 10.21 |
| Item 1, paragraph 820-215(2)(e) | 10.24 |
| Item 1, paragraph 820-215(3)(a) | 10.35 |
| Item 1, paragraph 820-215(3)(b) | 10.37 |
| Item 1, paragraph 820-215(3)(c) | 10.42 |
| Item 1, paragraph 820-215(3)(d) | 10.43 |
| Item 1, paragraphs 820-215(3)(e) and (f) | 10.48 |
| Item 1, paragraph 820-215(3)(g) | 10.50 |
| Item 1, paragraph 820-215(3)(h) | 10.51 |
| Item 1, paragraph 820-215(3)(i) | 10.54 |
| Item 1, paragraph 820-215(3)(j) | 10.57 |
| Item 1, subsection 820-215(4) | 10.62 |
| Item 1, paragraph 820-215(3)(k) | 10.59 |
| Item 1, section 820-220 | 2.104, 2.108 |
| Item 1, section 820-225 | 2.25 |
| Item 1, subsection 820-225(1) | 2.109 |
| Item 1, subsections 820-225(2) and (3), item 4 in the table | 2.110 |
| Item 1, subsection 820-225(3), items 1 to 3 in the table | 2.111 |
| Item 1, subsection 820-300(1) | 5.17, 5.22 |
| Item 1, subsection 820-300(2) | 5.19 |
| Item 1, paragraph 820-300(2)(c) | 7.87 |
| Item 1, subsection 820-300(3) | 5.25, 5.32 |
| Item 1, section 820-305 | 5.33 |
| Item 1, section 820-310 | 5.35 |
| Item 1, subsection 820-315(1) | 10.66 |
| Item 1, paragraphs 820-315(3)(a) and (b) | 10.78 |
| Item 1, paragraph 820-315(3)(c) | 10.80 |
| Item 1, paragraph 820-315(3)(d) | 10.82 |
| Item 1, paragraph 820-315(3)(e) | 10.83 |
| Item 1, paragraphs 820-315(3)(f) and (h) | 10.84 |
| Item 1, paragraph 820-315(3)(g) | 10.85 |
| Item 1, subsection 820-315(4) | 10.86 |
| Item 1, subsection 820-320(1) | 5.41 |
| Item 1, subsection 820-320(2) | 5.42 |
| Item 1, subsection 820-320(3) | 5.43 |
| Item 1, section 820-325 | 5.46, 10.68 |
| Item 1, section 820-330 | 5.21 |
| Item 1, subsection 820-395(1) | 4.15, 4.19, 4.22, 4.29 |
| Item 1, subsection 820-395(2) | 4.17, 6.62 |
| Item 1, subsection 820-395(3) | 4.23, 4.32 |
| Item 1, section 820-400 | 4.33 |
| Item 1, section 820-405, step 1 in the method statement | 4.27 |
| Item 1, subsection 820-410(1) | 10.66 |
| Item 1, paragraphs 820-410(3)(a) and (b) | 10.78 |
| Item 1, paragraph 820-410(3)(c) | 10.80 |
| Item 1, paragraph 820-410(3)(d) | 10.82 |
| Item 1, paragraph 820-410(3)(e) | 10.83 |
| Item 1, paragraphs 820-410(3)(f) and (g) | 10.84 |
| Item 1, subsection 820-410(4) | 10.86 |
| Item 1, section 820-415 | 4.29, 4.41, 10.68 |
| Item 1, section 820-420 | 4.18, 4.42 |
| Item 1, subsection 820-460(1) | 6.6 |
| Item 1, subsection 820-460(2) | 6.8 |
| Item 1, paragraph 820-460(2)(b) | 6.66 |
| Item 1, paragraph 820-460(2)(c) | 6.56 |
| Item 1, paragraph 820-460(2)(d) | 6.63 |
| Item 1, subsection 820-460(3) | 6.6, 6.34 |
| Item 1, subsection 820-460(4) | 6.34 |
| Item 1, subsection 820-460(5) | 6.10, 6.34 |
| Item 1, section 820-465 | 6.7, 6.36 |
| Item 1, section 820-470 | 8.40 |
| Item 1, paragraph 820-470(a) | 6.31 |
| Item 1, paragraph 820-470(b) | 6.32 |
| Item 1, subsection 820-500(1) | 6.13, 6.17 |
| Item 1, subsection 820-500(2) | 6.13 |
| Item 1, subsection 820-500(3) | 6.14 |
| Item 1, subsection 820-500(4) | 6.16 |
| Item 1, section 820-505 | 6.17 |
| Item 1, subsection 820-505(1) | 6.19 |
| Item 1, subsection 820-505(2) | 6.20 |
| Item 1, paragraphs 820-505(2)(b) and (c) | 6.20 |
| Item 1, subsection 820-505(3) | 6.12, 6.19 |
| Item 1, section 820-510 | 6.17 |
| Item 1, subsection 820-510(1) | 6.21 |
| Item 1, paragraphs 510(1)(b) and (c) | 6.21 |
| Item 1, subsection 820-510(2) | 6.22 |
| Item 1, subsection 820-510(3) | 6.21 |
| Item 1, paragraph 820-510(3)(a) | 6.24 |
| Item 1, paragraphs 820-515(a) to (c) | 6.20, 6.21 |
| Item 1, section 820-520 | 6.17, 6.26 |
| Item 1, section 820-525 | 6.18 |
| Item 1, section 820-530 | 6.28 |
| Item 1, section 820-550 | 6.11 |
| Item 1, subsection 820-550(1) | 6.38 |
| Item 1, subsection 820-550(2) | 6.39 |
| Item 1, subsections 820-550(3) and (4) | 6.41 |
| Item 1, subsection 820-550(5) | 6.47 |
| Item 1, subsection 820-550(6) | 6.48 |
| Item 1, subsection 820-550(7) | 6.50 |
| Item 1, subsection 820-550(8) | 6.55 |
| Item 1, section 820-555 | 6.66 |
| Item 1, section 820-560 | 6.43, 6.52 |
| Item 1, subsection 820-565(1) | 6.56 |
| Item 1, subsection 820-565(2) | 6.57 |
| Item 1, subsection 820-565(3) | 6.58 |
| Item 1, subsection 820-570(1) | 6.59 |
| Item 1, subsection 820-570(2) | 6.60, 6.64 |
| Item 1, subsection 820-575(1) | 6.63 |
| Item 1, subsections 820-575(3) and (4) | 6.65 |
| Item 1, subsection 820-630(1) | 8.8 |
| Item 1, subsection 820-630(2) | 8.10 |
| Item 1, subsection 820-630(3) | 8.11 |
| Item 1, section 820-635 | 8.8, 8.14 |
| Item 1, section 820-640 | 8.8 |
| Item 1, subsection 820-640(1) | 8.18 |
| Item 1, subsection 820-640(2) | 8.19 |
| Item 1, subsection 820-640(3) | 8.20 |
| Item 1, section 820-645 | 8.8 |
| Item 1, subsection 820-645(1) | 8.21, 8.22, 8.23 |
| Item 1, paragraph 820-645(1)(a) | 8.22 |
| Item 1, paragraph 820-645(1)(b) | 8.30, 8.31 |
| Item 1, subsection 820-645(2) | 8.25 |
| Item 1, subsection 820-645(3) | 8.26, 8.27 |
| Item 1, subsection 820-645(4) | 8.28, 8.29 |
| Item 1, subsection 820-645(5) | 8.32 |
| Item 1, subsection 820-645(6) | 8.32 |
| Item 1, section 820-675 | 8.33 |
| Item 1, subsections 820-675(1) and (2) | 8.34 |
| Item 1, subsection 820-675(3) | 8.36 |
| Item 1, section 820-680 | 8.33 |
| Item 1, subsection 820-680(1) | 8.37 |
| Item 1, section 820-685 | 8.41 |
| Item 1, section 820-690 | 8.49 |
| Item 1, section 820-745 | 7.11, 7.14 |
| Item 1, section 820-750 | 7.20 |
| Item 1, section 820-755 | 7.22 |
| Item 1, subsection 820-760(1) | 7.23 |
| Item 1, subsection 820-760(2) | 7.16, 7.18 |
| Item 1, section 820-780 | 7.29 |
| Item 1, subsection 820-785(1) | 7.31, 7.32 |
| Item 1, subsection 820-785(2) | 7.35 |
| Item 1, subsection 820-790(1) | 7.37 |
| Item 1, subsection 820-790(2) | 7.40 |
| Item 1, subsection 820-790(3) | 7.42 |
| Item 1, subsection 820-795(1) | 7.44 |
| Item 1, subsection 820-795(2) | 7.48 |
| Item 1, subsection 820-795(3) | 7.54 |
| Item 1, section 820-815 | 7.18, 7.56, 7.87 |
| Item 1, section 820-820 | 7.73 |
| Item 1, subsection 820-820(2) | 7.74 |
| Item 1, subsection 820-820(3) | 7.75 |
| Item 1, subsection 820-820(4) | 7.76 |
| Item 1, subsection 820-820(5) | 7.78 |
| Item 1, subsection 820-825(2) | 7.79 |
| Item 1, subsection 820-825(3) | 7.80 |
| Item 1, subsection 820-825(4) | 7.81 |
| Item 1, section 820-830 | 7.82 |
| Item 1, paragraph 820-835(a) | 7.83 |
| Item 1, paragraph 820-835(b) | 7.84 |
| Item 1, section 820-855 | 7.59 |
| Item 1, subsections 820-860(1) and (2) | 7.61 |
| Item 1, subsection 820-860(3) | 7.62 |
| Item 1, section 820-865 | 7.18, 7.65 |
| Item 1, paragraphs 820-865(a) and (b) | 7.63 |
| Item 1, paragraph 820-865(c) | 7.64 |
| Item 1, subsection 820-870(1) | 7.66 |
| Item 1, subsection 820-870(2) | 7.67 |
| Item 1, subsection 820-870(3) | 7.69 |
| Item 1, subsection 820-870(4) | 7.70 |
| Item 1, subsections 820-870(5) and (6) | 7.71 |
| Item 1, section 820-875 | 7.72 |
| Item 1, subsection 820-905(1) | 7.92 |
| Item 1, subsection 820-905(2) | 7.90 |
| Item 1, subsection 820-905(3) | 7.92 |
| Item 1, subsections 820-905(4) and (5) | 7.93 |
| Item 1, subsections 820-905(6) and (7) | 7.94 |
| Item 1, subsection 820-905(8) | 7.98 |
| Item 1, section 820-910 | 2.37 |
| Item 1, section 820-915 | 2.39 |
| Item 1, section 820-920 | Example 3.1 |
| Item 1, subsection 820-920(2) | 2.42 |
| Item 1, subsection 820-920(3) | 2.45 |
| Item 1, subsection 820-920(4) | 2.46 |
| Item 1, subsection 820-930(1), items 1 to 8 in the table | 1.71 |
| Item 1, subsection 820-930(2) | 1.67 |
| Item 1, subsection 820-942(1) | 2.66 |
| Item 1, subsection 820-942(2) | 2.77 |
| Item 1, subsection 820-942(3) | 2.80 |
| Item 1, section 820-960 | 9.7, 9.11 |
| Item 1, subsection 820-960(1) | 9.9 |
| Item 1, subsection 820-960(2) | 9.18 |
| Item 1, paragraph 820-960(2)(b) | 9.13, 9.16 |
| Item 1, subsection 820-960(3) | 9.10 |
| Item 1, subsections 820-960(4) and (5) | 9.19 |
| Item 1, section 820-965 | 9.20 |
| Item 1, section 820-980 | 10.88 |
| Item 1, sections 820-990 and 820-995 | 9.22 |
| Item 2 | 4.50 |
| Item 3 | 1.95 |
| Item 4 | 1.90 |
| Item 5 | 1.98 |
| Item 5, subsection 160AFD(9) | 5.54 |
| Item 5 | 3.79 |
| Items 6 to 9 | 4.53 |
| Items 10 and 11 (consequential amendments to section 262A) | 9.21 |
| Items 10 and 11, subsections 262A(2AA) and 262A(3) | 10.89 |
| Items 10 and 11 | 1.93, 9.24 |
| Items 12 and 13 | 1.92 |
| Items 14 and 15 | 1.91 |
| Item 16 | 3.79 |
| Item 16, section 25-90 | 1.101, 5.54 |
| Items 17 to 19 | 1.104 |
| Item 20 | 3.79 |
| Items 20 to 22, sections 820-15 and 820-20 | 1.85 |
| Item 22, section 820-10 | 4.44, 9.2 |
| Item 22, subsection 820-10(1) | 1.81, 10.90 |
| Item 22, subsection 820-10(2) | 1.82, 9.18, 9.23 |
| Item 22, section 820-15 | 4.44 |
| Item 22, section 820-25 | 1.84, 4.45, 5.52, 8.7, 8.52 |
| Item 22, section 820-30 | 6.29 |
| Item 22, section 820-35 | 1.86, 5.53 |
| Item 22, subsection 820-35(2) | 1.87 |
| Item 22, subsection 820-35(3) | 1.87 |
| Item 23 | 1.83, 4.51 |
| Item 24 | 3.79 |
| Items 24 to 26 | 1.85 |
| Item 25 | 4.54 |
| Item 26 | 10.90 |
| Bill reference | Paragraph number |
|---|---|
| Item 2, definition of 'accounting standards' in subsection 995-1(1) | 6.31, 8.34, 8.37, 9.11 |
| Item 7, definition of 'arm's length capital amount' in subsection 995-1(1) | 10.64 |
| Item 8, definition of 'arm's length debt amount' in subsection 995-1(1) | 10.11 |
| Item 10, definition of 'associate entity debt' in subsection 995-1(1) | 2.38 |
| Item 11, definition of 'associate entity equity' in subsection 995-1(1) | 1.66, 2.39 |
| Item 12, definition of 'associate entity excess amount' in subsection 995-1(1) | 2.42 |
| Item 13, definition of 'associate interest' in subsection 995-1(1) | 7.93, 7.94, 7.98 |
| Item 14, definition of 'Australian controlled foreign entity' in subsection 995-1(1) | 7.11 |
| Item 15, definition of 'Australian controller' in subsection 995-1(1) | 7.20, 7.22, 7.23 |
| Item 16, definition of 'Australian entity' in subsection 995-1(1) | 7.19 |
| Item 17, definition of 'Australian permanent establishment' in subsection 995-1(1) | 9.8 |
| Item 19, definition of 'average equity capital' in subsection 995-1(1) | 4.23, 4.32, 6.64 |
| Item 20, definition of 'controlled foreign company' in subsection 995-1(1) | 7.12, 7.13 |
| Item 21, definition of 'controlled foreign corporate limited partnership' in subsection 995-1(1) | 7.16 |
| Item 22, definition of 'controlled foreign entity debt' in subsection 995-1(1) | 3.48 |
| Item 23, definition of 'controlled foreign entity equity' in subsection 995-1(1) | 1.66, 3.48 |
| Item 24, definition of 'controlled foreign trust' in subsection 995-1(1) | 7.12, 7.15 |
| Item 26, definition of 'debt capital' in subsection 995-1(1) | 1.52, 2.26 |
| Item 27, definition of 'debt deduction' in subsection 995-1(1) | 1.57 |
| Item 29, definition of 'equity capital' in subsection 995-1(1) | 1.65, 4.24, 5.28, 5.32 |
| Item 31, definition of 'financial entity' in subsection 995-1(1) | 2.18, 2.78, 3.24 |
| Item 33, definition of 'foreign controlled Australian company' in subsection 995-1(1) | 7.31 |
| Item 34, definition of 'foreign controlled Australian entity' in subsection 995-1(1) | 7.29 |
| Item 35, definition of 'foreign controlled Australian partnership' in subsection 995-1(1) | 7.44, 7.48 |
| Item 36, definition of 'foreign controlled Australian trust' in subsection 995-1(1) | 7.37 |
| Item 37, definition of 'foreign entity' in subsection 995-1(1) | 7.28 |
| Item 39, definition of 'inward investing entity (ADI)' in subsection 995-1(1) | 4.17, 6.62 |
| Item 40, definition of 'inward investing entity (non-ADI)' in subsection 995-1(1) | 2.14, 6.47 |
| Item 41, definition of 'inward investment vehicle (financial)' in subsection 995-1(1) | 6.50 |
| Item 42, definition of 'inward investment vehicle (general)' in subsection 995-1(1) | 6.48 |
| Item 45, definition of 'maximum allowable debt' in subsection 995-1(1) | 3.38 |
| Item 47, definition of 'minimum capital amount' in subsection 995-1(1) | 4.33, 5.33 |
| Item 48, definition of 'non-debt liabilities' in subsection 995-1(1) | 2.52 |
| Item 50, definition of 'on-lent amount' in subsection 995-1(1) | 2.59, 2.86, 3.60 |
| Item 51, definition of 'outward investing entity (ADI)' in subsection 995-1(1) | 6.55 |
| Item 52, definition of 'outward investing entity (non-ADI)' in subsection 995-1(1) | 3.18, 6.38 |
| Item 53, definition of 'outward investor (financial)' in subsection 995-1(1) | 6.41 |
| Item 54, definition of 'outward investor (general)' in subsection 995-1(1) | 6.39 |
| Item 55, definition of 'overseas permanent establishment' in subsection 995-1(1) | 3.22 |
| Item 56, definition of 'prudential capital deduction' in subsection 995-1(1) | 5.38 |
| Item 57, definition of 'risk-weighted assets' in subsection 995-1(1) | 4.37, 5.36 |
| Item 59, definition of 'safe harbour capital amount' in subsection 995-1(1) | 4.35, 5.35 |
| Item 60, definition of 'safe harbour debt amount' in subsection 995-1(1) | 2.33 |
| Item 63, definition of 'TC control interest' in subsection 995-1(1) | 7.56 |
| Item 64, definition of 'TC control tracing interest' in subsection 995-1(1) | 7.72 |
| Item 65, definition of 'TC direct control interest' in subsection 995-1(1) | 7.59, 7.61, 7.63 |
| Item 66, definition of 'TC indirect control interest' in subsection 995-1(1) | 7.66 |
| Item 67, definition of 'Tier 1 prudential capital deduction' in subsection 995-1(1) | 5.39 |
| Item 70, definition of 'worldwide capital amount' in subsection 995-1(1) | 5.42 |
| Item 71, definition of 'worldwide debt' in subsection 995-1(1) | 3.68 |
| Item 72, definition of 'worldwide equity' in subsection 995-1(1) | 1.65, 3.69 |
| Item 74, definition of 'zero-capital amount' in subsection 995-1(1) | 2.66, 6.43 |
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