Effect of non-assessable non-exempt income treatment on a resident company's deductions, losses and foreign tax credits

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A deduction is not allowable for:

• outgoings or expenses connected to branch income and gains that are non-assessable non-exempt income
• capital losses on the disposal of a branch asset if, had there been a profit on the disposal, the profit would have been non-assessable non-exempt income.

Current year losses or carried forward losses of a resident company are not reduced by branch income or gains that are non-assessable non-exempt income.

Foreign tax credits are not allowed for foreign taxes paid on branch income that is non-assessable non-exempt income.