Income Tax Assessment Act 1997
CHAPTER 4
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INTERNATIONAL ASPECTS OF INCOME TAX
PART 4-5
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GENERAL
Division 820
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Thin capitalisation rules
Subdivision 820-FB
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Grouping branches of foreign banks and foreign financial entities with a consolidated group, MEC group or single Australian resident company
Effect of choice
SECTION 820-609 Effect on classification of head company or single company 820-609(1)
The * head company or single company is an outward investing entity (ADI) for a period (the trial period ) that is all or part of the grouping period if: (a) apart from this Subdivision, the head company or single company would be an * outward investing entity (ADI) for the trial period; or (b) apart from this Subdivision, the head company or single company:
820-609(2)
The * head company is also an outward investing entity (ADI) for the trial period if, apart from this Subdivision: (a) section 820-585 would prevent the disallowance of a * debt deduction for the income year including the trial period; or (b) section 820-587 would apply Subdivision 820-D to the head company as if it were an * outward investing entity (ADI) for the trial period.
820-609(3)
The single company is also an outward investing entity (ADI) for the trial period if it is both a * foreign controlled Australian company and an * ADI for that period.
820-609(4)
The * head company or single company is an inward investing entity (ADI) for the trial period if: (a) apart from this Subdivision, it would be an * inward investment vehicle (financial), and not an * outward investing financial entity (non-ADI), for the trial period; and (b) at least one of the * Australian permanent establishments is a * permanent establishment through which a * foreign bank carries on banking * business in Australia.
820-609(5)
The * head company or single company is an outward investing financial entity (non-ADI) for the trial period if, apart from this Subdivision: (a) it would be an * outward investing financial entity (non-ADI) for that period; and (b) at least one of the * Australian permanent establishments is a * permanent establishment of a * foreign entity that is a * financial entity; and (c) none of the Australian permanent establishments is a permanent establishment through which a * foreign bank carries on banking * business in Australia.
820-609(6)
The * head company or single company is an inward investing financial entity (non-ADI) and an inward investment vehicle (financial) for the trial period if, apart from this Subdivision: (a) it would be an * inward investing financial entity (non-ADI) and an * inward investment vehicle (financial) for that period; and (b) it would not be an * outward investing financial entity (non-ADI) for that period; and (c) at least one of the * Australian permanent establishments is a * permanent establishment of a * foreign entity that is a * financial entity; and (d) none of the Australian permanent establishments is a permanent establishment through which a * foreign bank carries on banking * business in Australia.
820-609(7)
This section has effect despite any other provision of this Division, except Subdivision 820-EA and section 820-610 .
View history note
Hide history noteSECTION 820-609 Effect on classification of head company or single company 820-609(1)
The * head company or single company is an outward investing entity (ADI) for a period (the trial period ) that is all or part of the grouping period if: (a) apart from this Subdivision, the head company or single company would be an * outward investing entity (ADI) for the trial period; or (b) apart from this Subdivision, the head company or single company:
(i) would be an * outward investing financial entity (non-ADI) for the trial period; and
(ii) at least one of the * Australian permanent establishments is a * permanent establishment through which a * foreign bank carries on banking * business in Australia.
820-609(2)
The * head company is also an outward investing entity (ADI) for the trial period if, apart from this Subdivision: (a) section 820-585 would prevent the disallowance of a * debt deduction for the income year including the trial period; or (b) section 820-587 would apply Subdivision 820-D to the head company as if it were an * outward investing entity (ADI) for the trial period.
820-609(3)
The single company is also an outward investing entity (ADI) for the trial period if it is both a * foreign controlled Australian company and an * ADI for that period.
820-609(4)
The * head company or single company is an inward investing entity (ADI) for the trial period if: (a) apart from this Subdivision, it would be an * inward investment vehicle (financial), and not an * outward investing financial entity (non-ADI), for the trial period; and (b) at least one of the * Australian permanent establishments is a * permanent establishment through which a * foreign bank carries on banking * business in Australia.
820-609(5)
The * head company or single company is an outward investing financial entity (non-ADI) for the trial period if, apart from this Subdivision: (a) it would be an * outward investing financial entity (non-ADI) for that period; and (b) at least one of the * Australian permanent establishments is a * permanent establishment of a * foreign entity that is a * financial entity; and (c) none of the Australian permanent establishments is a permanent establishment through which a * foreign bank carries on banking * business in Australia.
820-609(6)
The * head company or single company is an inward investing financial entity (non-ADI) and an inward investment vehicle (financial) for the trial period if, apart from this Subdivision: (a) it would be an * inward investing financial entity (non-ADI) and an * inward investment vehicle (financial) for that period; and (b) it would not be an * outward investing financial entity (non-ADI) for that period; and (c) at least one of the * Australian permanent establishments is a * permanent establishment of a * foreign entity that is a * financial entity; and (d) none of the Australian permanent establishments is a permanent establishment through which a * foreign bank carries on banking * business in Australia.
820-609(7)
This section has effect despite any other provision of this Division, except Subdivision 820-EA and section 820-610 .
Note:
If the head company or single company is an outward investing financial entity (non-ADI) or inward investment vehicle (financial) under this section and satisfies subsection 820-430(5) , it may choose under Subdivision 820-EA to be treated as an outward investing entity (ADI). Section 820-603 affects whether the company satisfies that subsection, by treating as part of the company each relevant foreign financial entity's Australian permanent establishment.