• Question 21

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Complete by placing an 'X' in the applicable box. If you answer 'yes', you need to provide the relevant amounts at C, D, E and F.

    If you are a foreign bank or a qualifying foreign financial entity that carries on business operations through an Australian branch, and you have not elected to opt out of Part IIIB of the ITAA 1936, then the rules in Part IIIB of the ITAA 1936 apply.

    For the purposes of Part IIIB of the ITAA 1936 the following terms are defined in section 160ZZV of the ITAA 1936:

    • Australian Branch in relation to a foreign bank, means a permanent establishment in Australia through which the bank carries on banking business.
    • Foreign Bank means a body corporate that is a foreign authorised deposit taking institution (ADI) for the purposes of the Banking Act 1959.
    • Financial entity and Foreign entity both have the meaning given in section 995-1 of the ITAA 1997.

    Label C
    Include at C your average quarterly notional borrowings. This is calculated by:

    • adding up your notional borrowings determined under subsection 160ZZZ(1) of the ITAA 1936 at the end of each quarter in your financial year
    • dividing it by four.

    Label D
    Include at D the amount of your notional interest deductions under section 160ZZZA of the ITAA 1936 (capped at LIBOR). If you are an offshore banking unit (OBU), do not include the notional interest amount attributable to OB activities under Division 9A of Part III of ITAA 1936.

    Label E
    Include at E the amount of your notional interest deductions under section 160ZZZA of the ITAA 1936 attributable to OB activities under Division 9A of Part III of ITAA 1936 (if you are an OBU).

    Label F
    Include at F the amount of withholding tax you paid on the notional interest amount you claimed under section 160ZZZA of the ITAA 1936.

    Attention

    Interest withholding tax is payable on 50% of the amount of notional interest determined under section 160ZZZA by reason of the operation of section 160ZZZJ of the ITAA 1936.

    End of attention
    Last modified: 09 Nov 2011QC 24292