Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019 (34 of 2019)
Schedule 2 Thin capitalisation
Income Tax Assessment Act 1997
3 After subsection 820-905(2A)
(2B) For the purposes of sections 820-910, 820-915 and 820-920, if the first entity mentioned in subsection (1) or (2A) is a trust (other than a *public trading trust) or a partnership:
(a) treat the reference in paragraph (1)(a) or (2A)(a) to 50% as instead being a reference to 10%; and
(b) if subsection (2C) applies - treat the other entity mentioned in subsection (1) or (2A) as holding an *associate interest in the first entity mentioned in that subsection of 10%; and
(c) disregard subsection 318(5) of the Income Tax Assessment Act 1936; and
(d) if subsection (2D) applies - in determining whether an entity is an *associate of another entity, treat the benefiting entity mentioned in that subsection as being a partner in the partnership.
(2C) This subsection applies if:
(a) the other entity mentioned in subsection (1) or (2A) holds an *associate interest in the first entity mentioned in that subsection of less than 10%; and
(b) it is reasonable to conclude that the entity, or one of the entities, who created the circumstance described in paragraph (a) of this subsection did so for the principal purpose of, or for more than one principal purpose that included the purpose of, ensuring that the first entity will not be an *associate entity of the other entity.
(2D) This subsection applies if:
(a) a trust (other than a *public trading trust) is a partner in a partnership; and
(b) another entity (the benefiting entity ) benefits under the trust (as determined in accordance with paragraph 318(6)(a) of the Income Tax Assessment Act 1936).