Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 719 - MEC groups  

Subdivision 719-B - MEC groups and their members  

Basic concepts

SECTION 719-15   What is an eligible tier-1 company ?  

719-15(1)    
A ^* tier-1 company of a ^* top company is an eligible tier-1 company if subsection (2) does not apply to the tier-1 company.

719-15(2)    
This subsection applies to a ^* tier-1 company if:

(a) there are one or more entities interposed between the tier-1 company and the ^* top company; and

(b) the conditions in subsection (3) are satisfied in relation to at least one of those interposed entities.

719-15(3)    
For the purposes of paragraph (2)(b), the conditions are as follows:

(a) the interposed entity must be one of the following:

(i) a company that is a foreign resident;

(ii) a ^* prescribed dual resident;

(iii) a trust that does not meet the conditions in item 1, 2 or 3 of the table in section 703-25 ;

(iv) a trust that meets the conditions in item 1, 2 or 3 of the table in section 703-25 and is not a ^* wholly-owned subsidiary of another ^* tier-1 company of the ^* top company;

(v) an entity covered by an item in the table in section 703-20 ;

(vi) a company that is an Australian resident, where no part of its taxable income (if any) would be taxable at a rate that is or equals the ^* general company rate;

(vii) a non-profit company (as defined in the Income Tax Rates Act 1986 ) that is a wholly-owned subsidiary of another tier-1 company of the top company;

(b) the interposed entity must not hold ^* membership interests only as nominee of one or more entities each of which is:

(i) another tier-1 company of the top company; or

(ii) an entity that is a wholly-owned subsidiary of another tier-1 company of the top company;

(c) at least one of the following entities must hold a membership interest in the interposed entity:

(i) another tier-1 company of the top company;

(ii) a wholly-owned subsidiary of another tier-1 company of the top company;

(iii) an entity that holds membership interests only as a nominee of one or more entities each of which is mentioned in subparagraph (i) or (ii).

719-15(4)    
For the purposes of subparagraphs (3)(a)(iv) and (vii) and paragraphs (3)(b) and (c), in determining whether an entity is a wholly-owned subsidiary of another ^* tier-1 company of the ^* top company, assume that all of the ^* membership interests that are beneficially owned by tier-1 companies of the top company were owned by a single tier-1 company of the top company.