Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)
Chapter 5 - Interest withholding tax and related provisions
5.1 The amendments contained in Schedule 5 of the Bill will:
- amend Division 11 of Part III (Bearer Debentures) to restrict its operation to interest paid in Australia on bearer debentures and provide an exemption for bearer debentures issued by an Offshore Banking Unit;
- amend Division 11A (Interest Withholding Tax (IWT)) to reform the requirements for exemption from IWT under section 128F;
- extend paragraph 221YRA(1)(a) of Division 4 which denies an income tax deduction to non-residents for the non-payment of interest withholding tax to residents paying interest to overseas persons; and
- amend Part IIIB (Foreign Bank Branches) to define the term 'interest' for the purposes of Part IIIB as having the same meaning as in the IWT provisions of the income tax law.
5.2 Division 11 will be amended to discontinue its application to interest paid overseas by a company on bearer debentures issued overseas. Such interest will be subject to IWT under Division 11A. Division 11 will also be amended to provide an exemption for bearer debentures issued by Offshore Banking Units.
5.3 Section 128F of Division 11A will be amended to:
- extend the exemption to wholesale borrowings by Australian companies by replacing the existing wide distribution test with a public offer test;
- repeal the existing use of funds in an Australian business requirement;
- provide that the exemption will not be available if the company pays interest to an associate where the company issuing the debentures is aware or should have been aware that the interest was paid to an associate;
- restrict the non-resident borrowing subsidiary exemption to subsidiaries resident in countries listed in the Income Tax Regulations; and
- introduce self assessment procedures for claiming the exemption.
5.4 Section 221YRA of Division 4 of Part VI will be amended to extend its application to interest paid overseas by a resident of Australia. The section will therefore deny both residents and non-residents an income tax deduction in respect of a payment of interest overseas if they have neither deducted nor remitted IWT to the Australian Taxation Office.
5.5 Part IIIB will be amended to define the term 'interest' for the purposes of Part IIIB as having the same meaning as in the IWT provisions of the income tax law.
5.6 The amendments to Division 11 will be effective from Royal Assent [item 11] . The amendments to Division 11A will be effective from 1 January 1996 [item 15] . The amendment to section 221YRA of Division 4 of Part VI of the Act will be effective from Royal Assent and will apply to interest paid on or after 1 January 1996 [item 18] . The amendment to Part IIIB affecting section 160ZZY will apply to foreign tax paid after the commencement of Part 4of Schedule 5 [item 21] .
5.7 Division 11 imposes tax on companies paying interest on bearer debentures to debenture holders who have not been identified to the Commissioner of Taxation. Section 126 imposes a penalty rate of tax on the issuer of a debenture in respect of the interest paid on bearer debentures. Section 126 is a longstanding anti-avoidance measure to counter the avoidance of taxation by persons receiving interest on bearer debentures. Where a debenture is issued overseas by a company resident in Australia and the interest is paid overseas, the Income Tax (Bearer Debentures) Act 1971 imposes income tax on the issuer of the debenture at the rate of 10 per cent. In all other cases income tax on the interest is imposed on the issuer of the debenture at 47 per cent, the top marginal rate of tax.
5.8 Section 125 provides an exemption from the application of Division 11 in relation to interest to which sections 128EA, 128F, 128G or 128GA provide an exemption from IWT. This section also exempts interest that is excluded from assessable income through the application of section 159GZZZZE.
5.9 Division 11A of the Act imposes IWT on interest paid to a person outside Australia by a resident of Australia. It also applies to interest paid to a person outside Australia by a non-resident, to the extent that the interest relates to a business carried on by the non-resident in Australia. IWT is a flat and final tax of 10 per cent imposed on interest paid to overseas lenders. The obligation for the collection of IWT is placed on the Australian entity paying interest overseas.
5.10 Section 128F of the Act provides an exemption from IWT for interest paid overseas on debentures issued overseas by an Australian company. The main requirements of the existing section 128F are that the debentures be widely distributed and the funds raised be used in an Australian business.
5.11 The term 'debenture, in relation to a company' is defined in section 6 of the Act as including stock, bonds, notes and any other securities of the company, whether constituting a charge on the assets of the company or not. This definition would include promissory notes or bills of exchange.
5.12 Subsection 128F(6) extends the section 128F exemption from IWT to borrowings undertaken by an Australian parent company through a wholly owned non-resident subsidiary. Such a subsidiary is restricted to carrying on the business of borrowing money for its Australian parent. If the non-resident subsidiary raises a loan outside Australia through the issue of debentures and the subsidiary lends the funds raised to its parent company on terms that do not result in a profit to the subsidiary, the parent is treated for the purposes of section 128F as the borrower.
5.13 As a complementary measure, section 159GZL of the Act excludes amounts owing by an Australian company to its non-resident borrowing subsidiary from the definition of 'foreign debt' for the purposes of the thin capitalisation rules in Division 16F. This is achieved by treating the interest payable by the company to its non-resident borrowing subsidiary as being payable to the holder of the debenture.
5.14 Section 221YRA of Division 4 of Part VI of the Act applies to deny a person an income tax deduction if the requirements of Division 11A have not been satisfied in respect of an interest or royalty payment. Subsection 221YRA(1) denies a non-resident person (borrower) an income tax deduction for interest paid overseas if the borrower has neither made a deduction from interest as required by subsection 221YL(2A) nor paid the IWT in respect of the interest. The existing section 221YRA does not apply to interest paid overseas by residents of Australia.
5.15 In relation to royalty withholding tax, an income tax deduction is denied irrespective of whether a resident or non-resident either fails to deduct or to remit withholding tax.
5.16 Part IIIB of the Act provides assistance in calculating that part of a foreign bank's taxable income that is referable to certain activities of its Australian branch. It also makes it clear that IWT applies to amounts that are treated as being interest paid by a branch to the bank. For the purposes of calculating the taxable income of a foreign bank branch under Part IIIB, the branch is treated as being a separate entity for the purposes of the following notional transactions between the branch and the bank: loans, derivative transactions and foreign exchange transactions.
5.17 LIBOR is an acronym for the London Inter Bank Offer Rate. The term LIBOR for the purposes of section 160ZZZB of Part IIIB of the Act is defined in paragraph 160ZZZA(3)(a) as meaning a reference to the rate of interest applicable at a particular time in relation to banks in the London inter bank market as determined by reference to the Reuter Money Rates Service or any other published source.
5.18 The term offshore banking broadly refers to the intermediation by institutions operating in Australia in financial transactions between non-resident borrowers and non-resident lenders. It also includes the provision of financial services to non-residents in respect of transactions or business occurring outside Australia.
5.19 Declaration as an OBU is confined to certain financial entities being authorised banks subject to the Banking Act 1959, wholly owned subsidiaries of banks which are already registered as OBUs, State banks and other financial institutions that the Treasurer is satisfied are appropriately authorised to carry on business as dealers in foreign exchange.
5.20 Income derived by an OBU from 'OB activities' is effectively taxed at a concessional rate of 10%. The meaning of an 'OB activity' is set out in sections 121D, 121E and 121EA of the Act. The proposed amendments impact on two of these activities. These are 'borrowing or lending activity' as defined in subsection 121D(2) and 'investment activity' as defined in subsection 121D(6).
5.21 Division 11 of the Act will be amended to effectively restrict its application to interest paid in respect of bearer debentures which are issued in Australia or where the interest is payable in Australia and where the company has not provided the Commissioner with the name and address of the holder of the debenture. [Items 1 to 11]
5.22 The existing subsection 126(1) will be repealed and replaced with new subsections 126(1) and (1A). Under the new section 126, a company will be subjected to tax if it fails to advise the Commissioner of Taxation of the name and address of the holders of bearer debentures which it has issued. The Income Tax (Bearer Debentures) Act 1971 will impose tax on the company at 47 per cent, the top marginal rate of tax for individuals. [New section 126]
5.23 Division 11 will not apply to interest paid by a company in respect of a bearer debenture which is subject to taxation under Division 11A. If a resident company issues a bearer debenture, satisfies the tests in new subsection 128F(1), other than the public offer test, and does not disclose the names and addresses of the debenture holders to the Commissioner, the interest will be treated as being paid to a non-resident and therefore subject to taxation under Division 11A [new subsection 128B(9C)] . The tests in new subsection 128F(1) that must be met for Division 11A to apply are:
- the company was a resident of Australia when it issued the debentures (new paragraph 128F(1)(a));
- the company was a resident of Australia when it paid the interest (new paragraph 128F(1)(b));
- the company issued the debenture outside Australia for the purpose of raising finance outside Australia (new paragraph 128F(1)(c)); and
- the interest is paid outside Australia (new paragraph 128F(1)(d)).
5.24 If a resident or the Australian permanent establishment of a non-resident acquires a bearer debenture and receives interest that has been subjected to IWT under section 128B, the interest will nonetheless be subject to income tax [item 7] . Credit for any IWT deducted by the issuer in respect of the interest is provided by subsection 221YS(1). The recipient's liability for income tax in relation to the interest is correspondingly reduced by the amount of IWT payable under section 128B [new paragraph 128B(9C)(d)] . If, however, an offshore permanent establishment of a resident acquires the bearer debenture thenparagraph 128B(9C)(d) will have no operation and the resident will be subject to taxation in accordance with subsection 128B(11) [items 6 and 7] . If IWT is imposed on a non-resident, other than in the course of carrying on business through a permanent establishment in Australia, the IWT is a final tax under section 128D.
5.25 Interest paid by a company will be exempt from taxation under Division 11 if the interest is exempt from taxation under Division 11A because of the exemptions provided in sections 128EA, 128F, 128G, 128GA and 128GB. This list of exemptions has been expanded to include interest paid by an Offshore Banking Unit (section 128GB) in respect of a bearer debenture. [New paragraph 126(1)(c)]
5.26 A company's liability to pay income tax is not affected by the application of the new subsection 126(1). [New subsection 126(1A)]
5.27 Section 125 will be repealed. [Item 1]
5.28 Subsection 126(3) will be amended to delete the reference to amounts taxed under Division 11 as there will be no overlap between Division 11 and Division 11A. [Item 3]
5.29 Subsection 127(2) will be repealed. This subsection is no longer necessary as a result of the amendments in Part 1 of Schedule 5. [Item 4]
5.30 Subparagraph 128B(3)(h)(iii) will be repealed. This subparagraph will be unnecessary as there will be no overlap between Division 11 and Division 11A. [Item 5]
5.31 References to subparagraph 128B(3)(h)(iii) will be deleted from section 128D and paragraph 202EE(1)(d). [Items 8 and 9]
5.32 Subsection 6 of the Income Tax (Bearer Debentures) Rates Act 1971 , will be repealed and replaced with a new subsection 6 [Item 10] . New subsection 6 maintains the rate of tax currently imposed by the Income Tax (Bearer Debentures) Rates Act 1971 at 47 per cent where interest is paid in respect of a bearer debenture to a person resident in Australia or to a non-resident carrying on business in Australia.
5.33 The amendments made by Part 1 of Schedule 5 apply to interest paid or credited after the commencement of this Part which will be Royal Assent. [Item 11]
5.34 The existing section 128F will be replaced with a new section 128F [item 12] . The main changes are:
- the replacement of the wide distribution of debentures requirement in the existing section 128F with a public offer test;
- the repeal of the use of funds in an Australian business requirement;
- the repeal of the requirement under existing paragraph 128F(1)(e) that the Commissioner of Taxation issue a certificate under subsection 128F(4); and
- the restriction of the existing subsection 128F(6) non-resident borrowing subsidiary exemption to countries listed in the Income Tax Regulations. It is proposed that the United States of America will be listed in the Regulations.
5.35 Interest paid by a company in respect of a debenture issued by the company will not be subject to IWT under Division 11A [new subsection 128F(2)] if the following conditions are satisfied:
- the company that issued the debenture was a resident of Australia at the time it issued the debenture [new paragraph 128F(1)(a)] ;
- the company was a resident of Australia at the time it paid interest in respect of the debenture [new paragraph 128F(1)(b)] ;
- the company issued the debenture outside Australia for the purpose of raising finance outside Australia [new paragraph 128F(1)(c)] ; and
- the company paid interest outside Australia [new paragraph 128F(1)(d)] ;
- the issue of the debenture meets the requirements of the proposed public offer test contained in new subsection 128F(3) [new paragraph 128F(1)(e)] .
5.36 For the purposes of new subsection 128F(1)(c) the term 'issued' is not defined. In considering an agreement to issue debentures in Levy v Abercorris Slate and Slab Company (1887) 37 Ch 260, Chitty J of the Chancery Division stated at p 264 that:
'[I]ssued is not a technical term, it is a mercantile term well understood; 'issued' here means the delivery over by the company to the person who has the charge ...
The Macquarie Dictionary (Second Edition) defines the term as meaning:
22. to put out; deliver for use, etc; put into circulation.
Although the term 'issue' is not defined in the proposed legislation the term will be taken to mean 'to put out or deliver debentures to subscribers or purchasers in an offshore market'.
5.37 There are five public offer tests. An Australian company will need to satisfy one of the tests in order to qualify for the section 128F exemption. The purpose of the public offer test is to ensure that lenders on overseas capital markets are aware that an Australian company is offering debentures for issue. The first and fourth public offer tests provide for the section 128F exemption to be extended to debentures offered on overseas wholesale capital markets.
The first public offer test - approach 10 financiers operating in an overseas capital market
5.38 Under the first public offer test, the debentures must be offered for issue to at least 10 persons who were each carrying on the business of providing finance, or investing or dealing in securities, as participants in an overseas financial market [new paragraph 128F(3)(a)] . For example, if the Australian company offers its debentures to 10 banks or pensions funds operating in an overseas financial market, the public offer test will be satisfied. It is a requirement of this test that the persons approached must not be known or suspected by the issuing company to be associates of each other. The company offering the debentures for sale does not need to undertake a detailed examination of the parties to whom the debentures are offered. It cannot, however, ignore companies that are generally known to be associates.
The second public offer test - offering debentures for issue to 100 overseas investors
5.39 The second public offer test will be satisfied if at least 100 investors receive an offer of debentures for issue [new paragraph 128F(3)(b)] . This test is to accommodate financing operations undertaken in overseas retail capital markets and is directed at individual investors and businesses. For example, this test may be satisfied by an issuer of debentures sending letters to persons who it may reasonably regard as having acquired debentures from time to time. Similarly, if offers are made to 100 customers of a stock broker who have previously purchased debentures this test will clearly be satisfied. Offers made to persons who have not previously purchased debentures from a stock broker but whom the broker has reason to believe may be interested in acquiring debentures or other securities will be counted for the purposes of the second public offer test. It will also be satisfied where an agent acting on behalf of the company approaches customers with an offer of the debentures for issue. The second test will not be satisfied where 100 persons receive an offer of debentures for issue who have not previously acquired debentures and in respect of whom the issuer has no reasonable basis for believing that they may be interested in acquiring debentures.
5.40 The third public offer test will be satisfied if the company offers debentures for issue where the debentures have been accepted for listing by an overseas stock exchange and the company has agreed with its dealers, managers or underwriters to have the debentures listed on the stock exchange following issue. [New section 128F(3)(c)]
5.41 The fourth public offer test will be satisfied if the debentures are offered for issue as a result of negotiations commencing by the company announcing in an electronic source, or other sources, of information, monitored by overseas capital markets its intention to raise funds by issuing debentures [new paragraph 128F(3)(d)] . For example, the public offer test will be met where negotiations between an investor and the issuing company commenced because the investor became aware of the company's intention to raise funds through seeing a computer information source or offering circular. In relation to electronic quotation, the public offer test will be satisfied if the Australian company's offer of debentures for issue is quoted on an electronic financial information source such as Reuter financial services or Bloomberg. The details that are required to be included in the electronic quotation are the name of the company issuing the debentures and the name of the program. The quotation may include the names of the dealers or managers.
5.42 In relation to hard copy publications, the debenture offer will have to be published in a publication monitored by financial markets as a source of information. For example, publication of an offer of debentures for issue in a leading financial newspaper in London or New York will satisfy this test. The test, however, will not be satisfied if the debenture offer is published in a source not used by overseas financial markets for dealing in debentures. A prospectus or offering circular that is publicly available in capital markets will also meet this test.
5.43 The fifth public offer test will be satisfied if a debenture is issued to a dealer, manager or underwriter for the purpose of placement of the debenture [new paragraph 128F(3)(e)] . In this process the debenture is sold to a dealer, manager or underwriter on the basis that it will place the debenture in an overseas market. If a dealer, manager or underwriter satisfies one of the other public offer tests, then the public offer test will be treated as being satisfied in respect of that debenture. The dealer, manager or underwriter is required to offer the debenture for sale within 30 days. The dealer, manager or underwriter which undertakes to satisfy the public offer test must provide written advice to the company stating the public offer test which has been satisfied. It is only necessary that one public offer test be satisfied by the dealer, manager or underwriter.
5.44 Certain issues of debentures do not satisfy the public offer test [new subsection 128F(5)] . A company will fail the public offer test if it was aware, at the time of issue, that the debentures would be acquired by a resident of Australia or an associate of the company issuing the debentures. This provision applies to acquisitions of debentures by such persons both directly from the issuer or indirectly from an interposed trust or entity and to the acquisition of beneficial interests in the debentures by such persons. This rule also applies where the company issuing the debentures should have known that the debentures would be acquired either by an associate or a resident of Australia. For example, if the Australian company issuing debentures was aware that a resident of Australia was proposing to acquire the debentures through an interposed overseas entity, the public offer test will not be satisfied for those debentures. Similarly if the issuing company should have been aware at the time of issue of debentures that an associate was acquiring the debentures, the public offer test will not be satisfied in respect of those debentures.
5.45 A global bond is defined as having all of the following features [new subsection 128F(10)] :
- the debenture must be described as a global bond or note [new paragraph 128F(10)(a)] ;
- the global bond must be issued by the company to a clearing house, as defined in new subsection 128F(9), or to another person, such as a common depository, on account of or on behalf of one or more clearing houses [new paragraph 128F(10)(b)] ;
- as a result of the issue, an investor must obtain contractual or other rights in relation to the global bond which are recorded in the books of the clearing house [new paragraph 128F(10)(c)] ;
- before the issue of the global bond, the company or a dealer, manager, or underwriter acting on behalf of the company must have announced that such rights would be created in relation to the global bond and sought subscriptions in relation to the global bond [new paragraph 128F(10)(d)] ;
- the announcement must satisfy the requirements of the public offer test in new subsection 128F(3) [new paragraph 128F(10)(e)] ; and
- the global bond must on its terms be exchangeable in certain circumstances for definitive debentures [new paragraph 128F(10)(f)] .
5.46 If a company issues a global bond as defined above the public offer test will be satisfied. [New subsection 128F(4)]
No exemption for interest paid to associates of the company issuing debentures
5.47 The section 128F exemption will not be available if the company which issued the debenture was aware that interest in respect of the debenture was paid to an associate of the company. The denial of the exemption will also occur if the company should have been aware that it was paying interest to an associate. It would be prudent for companies intending to issue debentures that qualify for the section 128F exemption to direct related parties not to acquire the company's debentures. This measure will not apply if an Australian company issuing debentures was not aware and could not have been expected to know that an associate was receiving interest in respect of a debenture. [New subsection 128F(6)]
Meaning of the term 'associate' for the purpose of new section 128F
5.48 For the purposes of section 128F, the term 'associate' has the same meaning as in Division 16F of the Act, 'Thin Capitalisation by Non-Residents' with a modification. Section 159GZA of Division 16F defines associate as having the meaning given by section 159GZC. The references in section 159GZC to companies who are partners will be treated as being deleted for the purposes of Division 11A. Partners of a company will not treated as associates for the purposes of Division 11A. [New subsection 128F(9)]
Meaning of the term 'clearing house' for the purpose of new section 128F
5.49 For the purposes of section 128F, the term 'clearing house' is defined in new subsection 128F(9). A clearing house is a clearance facility which provides buyers and sellers of debentures with a method of dealing in debentures. Examples of two major international clearing houses are Euroclear and CEDEL. [New subsection 128F(9)]
Meaning of the term 'debenture' for the purpose of new section 128F
5.50 For the purposes of section 128F, the term 'debenture' has the same meaning as in the rest of the Act. The term 'debenture' is defined in section 6 of the Act and without limiting that definition, for the purpose of new section 128F debenture includes a promissory note or bill of exchange. [New subsection 128F(9)]
Debentures issued through certain non-resident borrowing subsidiaries
5.51 A resident company may raise finance through a non-resident borrowing subsidiary [new subsection 128F(8)] . The finance must be raised by the issue of debentures in a country listed in the income tax regulations [new paragraph 128F(8)(c)] . The non-resident borrowing subsidiary must also be treated as a resident of the country in which the debentures are issued for the purposes of that country's tax law at the time the debentures are issued [new paragraph 128F(8)(ca)] . The term 'tax law' for the purposes of new paragraph 128F(8)(ca) is defined in new subsection 128F(9). The requirements of this exemption are that the subsidiary is wholly owned by an Australian resident company and that the sole business of the subsidiary is to raise finance for its parent. If the non-resident subsidiary meets the requirements of section 128F, the parent company will be treated as having raised finance and eligible for the exemption from IWT.
Australian public bodies treated as Australian resident companies
5.52 Certain public bodies are treated as Australian resident companies for the purposes of section 128F [new subsection 128F(7)] . This provision enables public bodies to qualify for the section 128F exemption in respect of their debentures issued overseas. The public bodies that are eligible to use the exemption are:
- an authority of the Commonwealth [new paragraph 128F(7)(a)] ; or
- a State or an authority of a State [new paragraph 128F(7)(b)] .
5.53 Paragraph 159GZL(a) of the Act will be amended to reflect the proposed non-resident borrowing subsidiary exemption in new section 128F(8). [Item 13]
5.54 The existing section 128F will be treated as being retained for the purposes of subsection 23(2) of the Financial Corporations (Transfer of Assets and Liabilities) Act 1993 . This is a consequential amendment to ensure that the effect of section 23(2) is not altered by the amendments proposed in this Bill. [Item 14]
5.55 The amendments made by Part 2 of Schedule 5 apply to debentures issued on or after 1 January 1996. [Item 15]
5.56 The Government announced that there will be a transitional period between I January 1996 and the Bill receiving Royal Assent during which the new section 128F will operate concurrently with the existing section 128F. During the transitional period, companies will have the choice of using either the existing section 128F or the new section 128F. [Item 16]
5.57 The reference in paragraph 221YRA(1)(a) to a person not being a resident will be deleted [item 17] . Paragraph 221YRA(1)(a) will deny both residents and non-residents of Australia an income tax deduction in respect of a payment of interest overseas if those persons have neither deducted nor remitted IWT to the Australian Taxation Office.
5.58 The amendments proposed by this part apply to interest paid on or after 1 January 1996. [Item 18]
5.59 Australian branches of foreign banks have the option of being taxed under Part IIIB of the Act or they may opt to be taxed under the general law subject to any relevant double tax treaty. In accordance with Part IIIB the thin capitalisation rules do not apply to a branch and instead, 4 per cent of a branch's interest deduction (which is treated as notional equity - the notional equity rule) is disallowed.
5.60 Foreign bank branches are ineligible for the section 128F exemption from IWT. However, foreign banks operating in Australia through branches are entitled to have an associated Australian company raise funds overseas under the section 128F exemption. New section 128F does not have an end use test and these Australian companies will be entitled to provide funds to the Australian branches of the foreign banks.
5.61 If Australian branches obtain finance from associated companies by way of discounted debentures, such as promissory notes or bills of exchange, the notional equity rule may be avoided. Accordingly, to prevent the new section 128F being used to circumvent the notional equity rule the term 'interest', for the purposes of Part IIIB of the Act, will be defined as having the same meaning as in the IWT provisions of the income tax law. This amendment will also prevent the notional equity rule being avoided by Australian branches of foreign banks financing their operation through non-interest borrowings. [Item 19; new section 160ZZV]
5.62 This measure will apply from the time the Bill receives Royal Assent. For example, if the Bill receives Royal Assent on 31 December 1997 then for the year of income ending 30 June 1998 the former meaning of interest will apply for the purposes of Part IIIB from 1 July 1997 to 31 December 1997 and the new definition for the period from 1 January 1998 to 30 June 1998.
5.63 The definition of the term 'interest' for the purposes of Division 11A is being amended in this Bill. For a discussion of the amended definition of interest see Chapter 2.
5.64 The term 'calculated' will be deleted from paragraph 160ZZZA(1)(c) to make it clear that the LIBOR ceiling applies to interest or amounts in the nature of interest. In respect of amounts that are in the nature of interest, the taxpayer will have to determine the effective interest rate in order to apply the LIBOR ceiling. An Australian branch of a foreign bank will not be able to claim a deduction for interest if the rate of return on the notional borrowing exceeds the LIBOR ceiling. [Item 20]
5.65 The amendments made by Part 4 that affect section 160ZZY apply to foreign tax paid after the bill receives Royal Assent. [Item 21]