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Taxation Determination

TD 93/204

Income tax: Offshore Banking Units (OBU) - where a non-resident has an Australian branch and an Australian subsidiary, and the subsidiary is registered as an OBU, does any share capital subscribed in the subsidiary by the parent fall within the definition of 'non-OB money'?

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FOI status:

may be releasedFOI number: I 1216387

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).

1. No, unless the share capital is subscribed by the Australian branch.

2. The definition of 'non-OB money' in section 121C of the Income Tax Assessment Act 1936 excludes share capital subscribed in the OBU by a non-resident, unless the payment of the subscription moneys occurred in the carrying on of a business in Australia by the non-resident, at or through a permanent establishment (eg a branch) of the non-resident.

3. It is quite clear from the wording of the definition that the only circumstances where share capital subscribed by a non-resident could constitute non-OB money would be where the funds flow directly from the Australian branch.

Commissioner of Taxation
28/10/93

Previously issued as Draft TD 93/D198

References

ATO references:
NO NAT 93/3707-5

ISSN 1038 - 8982

Subject References:
Offshore banking;
OBUs;
non-OB-money

Legislative References:
ITAA 121C

TD 93/204 history
  Date: Version: Change:
You are here 28 October 1993 Original ruling  
  13 October 2021 Consolidated ruling Addendum

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