Taxation Laws Amendment Act (No. 1) 2003 (12 of 2003)

Schedule 1   Interest withholding tax exemptions

Income Tax Assessment Act 1936

6   Subsection 128F(5)

Repeal the subsection, substitute:

Issues that always fail the public offer test

(5) The issue of a debenture by a company does not satisfy the public offer test if, at the time of the issue, the company knew, or had reasonable grounds to suspect, that:

(a) the debenture, or an interest in the debenture, was being, or would be, acquired either directly or indirectly by an associate of the company; and

(b) either:

(i) the associate is a non-resident and the debenture or interest was not being, or would not be, acquired by the associate in carrying on a business in Australia at or through a permanent establishment of the associate in Australia; or

(ii) the associate is a resident of Australia and the debenture or interest was being, or would be, acquired by the associate in carrying on a business in a country outside Australia at or through a permanent establishment of the associate in that country; and

(c) the debenture or interest was not being, or would not be, acquired by the associate in the capacity of:

(i) a dealer, manager or underwriter in relation to the placement of the debenture; or

(ii) a clearing house, custodian, funds manager or responsible entity of a registered scheme.