Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-AA - Thin capitalisation rules for general class investors  

Operative provisions

SECTION 820-48   Where entity is taken to make third party debt test choice  

820-48(1)    
For the purposes of subsection 820-46(5) , this section applies to an entity (the first entity ) in relation to an income year if:

(a)    the first entity is a *member of an *obligor group in relation to a *debt interest; and

(b)    the entity that issued the debt interest:

(i) has made a choice under subsection 820-46(4) in relation to that income year (including a choice that is taken to be made under subsection 820-46(5) in relation to a different obligor group); and

(ii) is required to lodge an * income tax return for the income year; and

(c)    the first entity:

(i) is an * associate entity of the entity mentioned in paragraph (b) of this subsection; and

(ii) is required to lodge an * income tax return for the income year.

820-48(2)    
For the purposes of subparagraph (1)(c)(i) , in determining whether an entity is an associate entity of another entity:

(aa)    disregard the requirement in subsections 820-905(1) and (2A) that the entity is an *associate of the other entity, unless only paragraph 820-905(1)(b) applies; and

(a)    treat the references in paragraphs 820-905(1)(a) and 820-905(2A)(a) to " an * associate interest of 50 % or more " as instead being a reference to " a * TC control interest of 20 % or more " ; and

(b)    treat subsection 820-860(3) as applying for the purposes of determining whether the entity is an associate entity of the other entity (as a result of paragraph (a) of this subsection); and

(c)    treat the purposes mentioned in subparagraphs 820-870(1)(b)(i) and (ii) as including the purposes of determining whether the entity is an associate entity of the other entity (as a result of paragraph (a) of this subsection).

820-48(3)    
For the purposes of subsection 820-46(5) , this section also applies to the entity mentioned in that subsection in relation to an income year if:

(a)    the entity has entered into a * cross staple arrangement with one or more other entities; and

(b)    one or more of those other entities has made a choice under subsection 820-46(4) in relation to that income year (including a choice that is taken to be made under subsection 820-46(5) ).