Income Tax Assessment Act 1997
The Object of this Division is to ensure that the following entities do not reduce their tax liabilities by using an excessive amount of *debt capital to finance their Australian operations: (a) *Australian entities that operate internationally; (b) Australian entities that are foreign controlled; (c) *foreign entities that operate in Australia.
Note:
This Division applies in relation to debt deductions of an entity as reduced, if required, in accordance with Division 815 (about cross-border transfer pricing).
[ CCH Note: S 820-30 will be amended by No 23 of 2024, s 3 and Sch 2 item 15, by substituting " *debt deductions, in financing their Australian operations " for " *debt capital to finance their Australian operations " , effective 1 July 2024. For application provisions, see note under s 705-60 .]
[
CCH Note:
S 820-31 will be inserted by No 23 of 2024, s 3 and Sch 2 item 15A, effective 1 July 2024. For application provisions, see note under s
705-60
. S 820-31 will read:
The provisions mentioned in paragraphs
(2)(a)
to
(c)
may further disallow debt deductions of the entity.
SECTION 820-31 Order of application of Subdivisions
820-31(1)
First, work out if a *debt deduction of an entity for an income year is disallowed under Subdivision
820-EAA
(debt deduction limitation rules for debt deduction creation).
820-31(2)
To the extent that all or part of a debt deduction is disallowed under that Subdivision, disregard the debt deduction in applying the following provisions in relation to the entity for the income year:
(a)
Subdivision
820-AA
;
(b)
Subdivision
820-B
;
(c)
Subdivision
820-C
.
Note:
]
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