Tax and Superannuation Laws Amendment (2015 Measures No. 1) Act 2015 (70 of 2015)

Schedule 3   Offshore banking units

Part 3   Allocation of expenses

Income Tax Assessment Act 1936

13   After section 121ED

Insert:

121EDA Meaning of OB income

OB income

(1) Subject to subsections (2) to (5), the OB income of an OBU of a year of income is so much of the OBU's ordinary income and statutory income of the year of income as is:

(a) derived from OB activities of the OBU or the part of the OBU to which paragraph 121EB(1)(c) applies; or

(b) included in the statutory income because of such activities.

(2) Subsection (1) does not apply to amounts included under Part 3-1 of the Income Tax Assessment Act 1997 (about capital gains).

(3) Subsection (1) does not apply to the extent that the money lent, invested or otherwise used in carrying on the OB activities is non-OB money of the OBU.

(4) A typical example of an amount covered by the exception in subsection (3) is interest derived from the OB activity of lending money to an offshore person, where the money lent is non-OB money.

Reduction of OB income because of certain investment activities

(5) Ordinary or statutory income that:

(a) would otherwise be taken into account under subsection (1); and

(b) is derived from an investment activity (within the meaning of subsection 121D(6A) or (6B)) included in OB activities of the OBU or the part of the OBU to which paragraph 121EB(1)(c) applies;

is reduced by the average Australian asset percentage (within the meaning of subsection 121DA(2)) of the portfolio investment concerned.