Head company – consolidated group
A head company must be an Australian resident company that has all or some of its taxable income taxed at a rate that is or equals the general company tax rate. It cannot be a prescribed dual resident or a subsidiary member of a consolidatable or consolidated group. A head company also cannot be a company that receives special tax treatment relative to an ordinary Australian resident company – examples of such companies include tax exempt companies, certain credit unions, pooled development funds (PDFs) and film licensed investments companies. However, a non-profit company can be a head company.
- section 703-15 of the ITAA 1997.
Head company – MEC group
This is an eligible tier 1 company that has been nominated by all other eligible tier 1 companies of the MEC group to be the provisional head company of the group, and in which no membership interests are held by other members of the group. At the end of the income year, the provisional head company is taken to have been the head company of the MEC group for the income year or for the period the MEC group was in existence.
- section 719-75 of the ITAA 1997.