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

Schedule 1   Interest withholding tax exemptions

Income Tax Assessment Act 1936

7   Subsection 128F(6)

Repeal the subsection, substitute:

No exemption for interest paid to certain associates of the issuing company

(6) This section does not apply to interest paid by the company to a person in respect of the debenture if, at the time of the payment, the company knows, or has reasonable grounds to suspect, that:

(a) the person is an associate of the company; and

(b) either:

(i) the associate is a non-resident and the payment is not received by the associate in respect of a debenture that the associate acquired 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 payment is received by the associate in respect of a debenture that the associate acquired 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 associate does not receive the payment in the capacity of a clearing house, paying agent, custodian, funds manager or responsible entity of a registered scheme.