Income Tax Assessment Act 1997
CHAPTER 4
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INTERNATIONAL ASPECTS OF INCOME TAX
A *deduction/non-inclusion mismatch, or a part of such a mismatch, meets the hybrid requirement in this section if:
(a) the payment that gives rise to the mismatch is made under any of the following:
(b) the mismatch, or the part of the mismatch, is attributable to differences in the treatment of the debt interest, equity interest or derivative financial arrangement, arising from the terms of the interest or arrangement; and
(c) the exception in subsection (2) does not apply.
This exception applies if:
(a) the difference in treatment mentioned in paragraph (1)(b) primarily relates to a deferral in the recognition of income or profits under the *debt interest, the *equity interest or the *derivative financial arrangement; and
(b) the term of the interest or arrangement is 3 years or less.
PART 4-5
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GENERAL
Division 832
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Hybrid mismatch rules
Subdivision 832-C
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Hybrid financial instrument mismatch
Operative provisions
SECTION 832-220
Hybrid requirement
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payments under financial instruments
832-220(1)
A *deduction/non-inclusion mismatch, or a part of such a mismatch, meets the hybrid requirement in this section if:
(a) the payment that gives rise to the mismatch is made under any of the following:
(i) a *debt interest;
(ii) an *equity interest;
(iii) a *derivative financial arrangement; and
(b) the mismatch, or the part of the mismatch, is attributable to differences in the treatment of the debt interest, equity interest or derivative financial arrangement, arising from the terms of the interest or arrangement; and
(c) the exception in subsection (2) does not apply.
Example:Exception for deferrals not exceeding 3 years 832-220(2)Redeemable preferences shares that are treated under this Act as a debt interest, and in a foreign country as an equity interest.
This exception applies if:
(a) the difference in treatment mentioned in paragraph (1)(b) primarily relates to a deferral in the recognition of income or profits under the *debt interest, the *equity interest or the *derivative financial arrangement; and
(b) the term of the interest or arrangement is 3 years or less.
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