• ADI inward investing entity

    Section 820-597 of the ITAA 1997 allows a permanent establishment of a foreign bank to join a consolidated group.

    See also:

    The four steps an ADI inward investing entity takes to calculate if they have met the thin capitalisation rules are:

    Record keeping

    An ADI inward investor carrying on business at or through a permanent establishment with total revenues attributable to that permanent establishment of at least $2 million are subject to certain record keeping requirements. These requirements are financial statements, including all the necessary notes. They must be prepared for its Australian permanent establishment using the Australian accounting standards or the accounting standards of Germany, Japan, France, USA, UK, Canada, New Zealand or the international accounting standards.

    Summary flowchart

    This flowchart summarises the steps an ADI inward investing entity follows to work out whether any of its debt deductions are disallowed and the amount of the disallowed deductions.

    Flowchart 9: ADI inward investing entity's steps to work out if any of the debt deductions are disallowed

    Flowchart_09_js36486_v2

    Last modified: 09 Mar 2016QC 48171