Tax Laws Amendment (2007 Measures No. 3) Act 2007 (79 of 2007)

Schedule 7   Interest withholding tax

Income Tax Assessment Act 1936

8   At the end of section 128F

Add:

(11) A written agreement is a syndicated loan facility if:

(a) the agreement describes itself as a syndicated loan facility or syndicated facility agreement; and

(b) the agreement is between one or more borrowers and at least 2 lenders; and

(c) under the agreement each lender severally, but not jointly, agrees to lend money to, or otherwise provide financial accommodation to, the borrower or borrowers; and

(d) the amount to which the borrower or borrowers will have access at the time the first loan or other form of financial accommodation is to be provided under the agreement is at least $100,000,000 (or a prescribed amount).

(12) A written agreement is also a syndicated loan facility if:

(a) the agreement describes itself as a syndicated loan facility or syndicated facility agreement; and

(b) the agreement is between one or more borrowers and one lender where the agreement provides for the addition of other lenders; and

(c) the agreement provides that, when other lenders are added, each lender severally, but not jointly, agrees to lend money to, or otherwise provide financial accommodation to, the borrower or borrowers; and

(d) the amount to which the borrower or borrowers will have access at the time the first loan or other form of financial accommodation is to be provided under the agreement is at least $100,000,000 (or a prescribed amount).

(13) However, an agreement under which there are 2 or more borrowers is a syndicated loan facility only if all of them are:

(a) members of the same wholly-owned group (within the meaning of the Income Tax Assessment Act 1997); or

(b) parties to the same joint venture; or

(c) associates of each other.

(14) For the purposes of this section, a change (including by novation) to the lenders under a syndicated loan facility does not result in a different agreement.

(15) For a debt interest that consists of 2 or more related schemes (within the meaning of the Income Tax Assessment Act 1997) where one or more of them is a non-equity share, this section applies only to interest paid in respect of the non-equity share.

Note: Subsection 128A(1AB) defines interest for the purposes of this Division. Under that subsection, dividends paid in respect of a non-equity share are treated as being interest.

(16) The rule in subsection (15) does not apply to the extent that interest in respect of the other related scheme or schemes would be interest to which this section applies in respect of a debenture or debt interest.