Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 830 - Foreign hybrids  

Subdivision 830-A - Meaning of " foreign hybrid "  

SECTION 830-15   Foreign hybrid company  

830-15(1)    

Subject to subsection (5), a company is a foreign hybrid company in relation to an income year if:

(a) at all times during the income year when the company is in existence, the partnership treatment requirements for the income year in subsection (2) or (3) are satisfied; and

(b) at no time during the income year is the company, for the purposes of a law of any foreign country that imposes *foreign income tax (except *credit absorption tax or *unitary tax) on entities because they are residents of the foreign country, a resident of that country; and

(c) at no time during the income year is the company an Australian resident; and

(d) disregarding this Division, in relation to the same income year of another taxpayer:

(i) the company is a *CFC at the end of a *statutory accounting period that ends in the income year; and

(ii) at the end of the statutory accounting period, the taxpayer is an *attributable taxpayer in relation to the CFC with an *attribution percentage greater than nil.

Partnership treatment requirements specific to USA

830-15(2)    
For the purposes of paragraph (1)(a), the partnership treatment requirements are satisfied if:

(a) the company was formed in the United States of America; and

(b) for the purposes of the law of that country relating to *foreign income tax (except *credit absorption tax or *unitary tax) imposed by that country, the company is a limited liability company that:

(i) is treated as a partnership; or

(ii) is an eligible entity that is disregarded as an entity separate from its owner.

Partnership treatment requirements relating to any foreign country

830-15(3)    
For the purposes of paragraph (1)(a), the partnership treatment requirements are also satisfied if:

(a) the company was formed in a foreign country (which may be the United States of America); and

(b) for the purposes of the law of that country relating to *foreign income tax (except *credit absorption tax or *unitary tax) imposed by that country, the company is treated as a partnership; and

(c) regulations are in force setting out requirements to be satisfied by a company in relation to the income year for the purposes of this paragraph, and the company satisfies those requirements.

830-15(4)    
Regulations for the purposes of paragraph (3)(c) cannot set out requirements in relation to any income year before the one in which the regulations are made.

830-15(5)    

If a shareholder is not an ^* attributable taxpayer in relation to a company, then, for the purposes of applying the Income Tax Assessment Act 1936 and this Act in relation to the shareholder ' s ^* share or shares in the company, the company is a foreign hybrid company in relation to an income year for the shareholder if, and only if, the shareholder:

(a) has made an election under former subsection 485AA(2) of the Income Tax Assessment Act 1936 ; or

(b) makes an election under this paragraph;

in relation to the shareholder ' s share or shares in the company.

830-15(6)    

For the purposes of subsection (5), the company is a foreign hybrid company in relation to any income year during which the election referred to in paragraph (5)(a) or (5)(b) is in force.

830-15(7)    

An election can only be made under paragraph (5)(b) if:

(a) in relation to the income year in which the election is made, the company:

(i) is a FIF (within the meaning of former Part XI of the Income Tax Assessment Act 1936 ); and

(ii) satisfies paragraphs (1)(a) to (c); and

(b) at the end of the income year in which the election is made, the shareholder ' s interest in the FIF consists of one or more ^* shares in the FIF.

830-15(8)    

An election under paragraph (5)(b) must be made:

(a) on or before the day on which the shareholder lodges the shareholder ' s income tax return for the income year; or

(b) within a further time allowed by the Commissioner.

830-15(9)    

The election:

(a) is in force during the income year and all later income years; and

(b) is irrevocable.