Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-90
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CONSOLIDATED GROUPS
Division 719
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MEC groups
Subdivision 719-B
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MEC groups and their members
Basic concepts
SECTION 719-20 What is a top company and a tier-1 company ? 719-20(1)
At a particular time, a company is:
(a) a top company if the requirements in item 1 of the table are met; or
(b) a tier-1 company of the top company if the requirements in item 2 of the table are met.
719-20(2)
For the purposes of paragraph (b) of column 4 of item 2 of the table, in determining whether a company (the test company) is a * tier-1 company, if 2 or more other companies beneficially own all of the * membership interests in the test company, and each of those other companies:
(a) is a * wholly-owned subsidiary of the * top company; and
(b) meets the conditions in columns 2 and 3 of item 2 of the table;
View history note
Hide history noteSECTION 719-20 What is a top company and a tier-1 company ? 719-20(1)
At a particular time, a company is:
(a) a top company if the requirements in item 1 of the table are met; or
(b) a tier-1 company of the top company if the requirements in item 2 of the table are met.
| Top companies and tier-1 companies | ||||
| Column 1 | Column 2 | Column 3 | Column 4 | |
| Kind of entity | Income tax treatment requirements | Residence requirements | Ownership requirements | |
| 1 | Top company | No specific requirements | The company must be a foreign resident | The company must not be a *wholly-owned subsidiary of another company (other than a company that is a *prescribed dual resident, or a company that is an Australian resident that fails to meet a condition in column 2 of item 2) |
| 2 | Tier-1 company | The company must have all or some of its taxable income (if any) taxed at a rate that is or equals the *corporate tax rate apart from this Part
The company must not be covered by an item in the table in section 703-20 |
The company must be an Australian resident (but not a *prescribed dual resident) | The company:
(a) must be a *wholly-owned subsidiary of the *top company; and (b) must not be a wholly-owned subsidiary of a company that is an Australian resident (other than a company that fails to meet a condition in column 2 or 3) |
719-20(2)
For the purposes of paragraph (b) of column 4 of item 2 of the table, in determining whether a company (the test company) is a * tier-1 company, if 2 or more other companies beneficially own all of the * membership interests in the test company, and each of those other companies:
(a) is a * wholly-owned subsidiary of the * top company; and
(b) meets the conditions in columns 2 and 3 of item 2 of the table;
the test company is taken to be a wholly-owned subsidiary of one of those other companies.
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