Income Tax Assessment Act 1997
The Commissioner may disallow a deduction of a company if:
(a) a person (other than the company) has obtained or will obtain a tax benefit in connection with a *scheme; and
(b) the scheme would not have been entered into or carried out if the company had not incurred some or all (the available expense ) of the loss, outgoing or expenditure that the deduction is for.
However, the deduction may be disallowed only to the extent of the available expense.175-30(2)
The Commissioner may disallow deductions of a company (or parts of them) if:
(a) a person has obtained or will obtain a tax benefit in connection with a *scheme; and
(b) the scheme would not have been entered into or carried out if some or all (the available amount ) of the assessable income that the company *derived or of a *capital gain that accrued to the company:
(i) before it incurred the losses, outgoings or expenditure that the deductions were for; and
had not been derived or had not accrued, as the case may be.
(ii) in the same income year as it incurred them;
The disallowed deductions and parts of deductions may exceed the available amount.
The disallowance may result in a tax loss for the income year. See section 175-35 .
An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 . 175-30(4)
The Commissioner cannot disallow under this section if:
(a) the person who has obtained or will obtain the tax benefit had a *shareholding interest in the company at some time during the income year; and
(b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.
Section 175-100 allows the Commissioner to disallow the whole or part of any deductions of an insolvent company.