Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 832 - Hybrid mismatch rules  

Subdivision 832-E - Reverse hybrid mismatch  

Operative provisions

SECTION 832-405   Hybrid requirement - assume payment was made to an investor  

832-405(1)  
The payment meets the hybrid requirement in this section if:


(a) the payment is made directly, or indirectly through one or more interposed entities, to a *reverse hybrid; and


(b) subsection (2) or (3) applies. Payment would have been taxed in Australia

832-405(2)  
This subsection applies if:


(a) the investor country identified in subsection 832-410(3) is Australia; and


(b) either:


(i) the amount of the *deduction/non-inclusion mismatch exceeds the amount that would be the amount of that mismatch if the amount of the payment that was *subject to Australian income tax for an income year was instead worked out on the assumption in subsection (4); or

(ii) on the assumption in subsection (4), the payment would have given rise to a *hybrid financial instrument mismatch, a *hybrid payer mismatch or a *reverse hybrid mismatch.
Payment would have been taxed in a foreign country

832-405(3)  
This subsection applies if:


(a) the investor country identified in subsection 832-410(3) is a foreign country; and


(b) either:


(i) the amount of the *deduction/non-inclusion mismatch exceeds the amount that would be the amount of that mismatch if the amount of the payment that was *subject to foreign income tax for a *foreign tax period was instead worked out on the assumption in subsection (4); or

(ii) on the assumption in subsection (4), the payment would have given rise to a *hybrid financial instrument mismatch, a *hybrid payer mismatch or a *reverse hybrid mismatch.
Assumption - payment was made to the investing taxpayer

832-405(4)  
For the purposes of subsections (2) and (3), assume that the payment had instead been made:


(a) by the same entity; but


(b) directly to the investing taxpayer identified in paragraph 832-410(3)(a) or (b).


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