Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 832 - Hybrid mismatch rules  

Subdivision 832-G - Deducting hybrid mismatch  

Operative provisions

SECTION 832-560   Neutralising amount  

832-560(1)    
The neutralising amount for a *deducting hybrid mismatch is worked out by:

(a) starting with the lesser of the amounts of each deduction or *foreign income tax deduction to which the amount gives rise; and

(b) reducing (but not below nil) the result from paragraph (a) by the amount of any *dual inclusion income that is available to be applied in working out the neutralising amount.

Australian deduction - inclusions must be in Australia and in the other deducting country

832-560(2)    
An amount of *dual inclusion income is available to be applied to reduce the *neutralising amount for a *deducting hybrid mismatch to which section 832-530 applies if:

(a) the *deducting hybrid is eligible to apply the amount (see subsection 832-680(7) ); and

(b) the amount is *subject to Australian income tax for the purposes of subsection 832-680(1) in the income year mentioned in subsection 832-530(1) ; and

(c) the amount is *subject to foreign income tax for the purposes of subsection 832-680(1) in the foreign country in which the *foreign income tax deduction arose.

Note:

Section 832-680 modifies the meanings of subject to Australian income tax and subject to foreign income tax for the purpose of working out dual inclusion income.

Offshore hybrid mismatch - inclusions must be in the deducting countries

832-560(3)    
An amount of *dual inclusion income is available to be applied to reduce the *neutralising amount for a *deducting hybrid mismatch that is an *offshore hybrid mismatch if:

(a) the *deducting hybrid is eligible to apply the amount (see subsection 832-680(7) ); and

(b) the amount is *subject to foreign income tax for the purposes of subsection 832-680(1) in the foreign country in which one of the *foreign income tax deductions arose, and in the same *foreign tax period; and

(c) the amount is also subject to foreign income tax for the purposes of subsection 832-680(1) in the foreign country in which another of the foreign income tax deductions arose.