Income tax: interest withholding tax exemption under section 128F of the Income Tax Assessment Act 1936 - does section 128F apply to debentures under which the yield is determined by a variable indexation factor rather than by being fixed?
Please note that the PDF version is the authorised version of this ruling.
FOI status:may be releasedFOI number: I 1018727
1. Yes. Section 128F applies to any debenture as defined in subsection 128F(9). For the purposes of this section, 'debenture' is given a wider meaning than under subsection 6(1). It includes a promissory note or bill of exchange, in addition to common securities such as debenture stocks, bonds and notes, or any other securities of a company.
2. Accordingly, provided the requirements of 128F are otherwise satisfied, the section applies to structured or indexed notes under which the yield (but not the principal amount) is determined by a variable factor and which may vary by an amount greater than or equal to zero.
Commissioner of Taxation
12 May 1999
NO 97/6464-0; 99/658-1