Income Tax Assessment Act 1936


Division 9A - Offshore banking units  

Subdivision B - Interpretation  


121EB(1)   Permanent establishments treated as separate persons.  

If an OBU consists of:

(a) one or more permanent establishments in Australia at or through which the OBU carries on what are OB activities apart from this section; and

(b) one or more other permanent establishments either in Australia or outside Australia;

then sections 121D to 121EAA (inclusive) apply as if:

(c) the OBU consisted only of the permanent establishments referred to in paragraph (a); and

(d) the permanent establishments referred to in paragraph (b) were separate persons.

121EB(2)   Head office can be permanent establishment.  

For the purpose of determining under subsection (1) whether something is a permanent establishment, it does not matter whether it is a head office or not.


To avoid doubt, this section applies for the purposes of applying Subdivision 230-A of the Income Tax Assessment Act 1997 to a financial arrangement (within the meaning of that Act).

This means that it is possible for financial arrangements to be entered into between the bank and the branch and for the bank or the branch to have a gain or loss from such an arrangement dealt with under Division 230 of the income Tax Assessment Act 1997 .

Arm ' s length pricing


For the purposes of this Division, treat an amount that, because of subsections (1) to (3):

(a) is included in the OBU ' s OB income; or

(b) is an allowable OB deduction of the OBU;

as being the amount that would be so included, or that would be the amount of the allowable OB deduction, were the OBU and the permanent establishments mentioned in paragraph (1)(d) dealing with each other at arm ' s length.


For the purposes of determining the effect subsection (4) has in relation to the amount that is included or allowable, work out the arm ' s length dealing so as best to achieve consistency with:

(a) the documents covered by section 815-235 of the Income Tax Assessment Act 1997 (Guidance); and

(b) subject to paragraph (a), the documents covered by section 815-135 of that Act.

View surrounding sectionsView surrounding sectionsBack to top

This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.