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Taxation Determination

TD 93/210

Income tax: Offshore Banking Units (OBU) - does the definition of advisory activity in section 121D(7) encompass advising an offshore debt investor or offshore borrower in an offshore leveraged lease which has an Australian end-user?

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FOI status:

may be releasedFOI number: I 1216442

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. Where the advice concerns the making of a particular investment such as a leverage lease, the advice must relate to the kinds of investment referred to in subsection 121D(6) of the Income Tax Assessment Act 1936- the investment activity provision.

2. If the leveraged lease involves the leasing of equipment which is purchased, subsection 121D(6) requires the equipment to be located outside Australia if it is to qualify as an investment activity.

3. If the advisory work relating to the raising of offshore debt finance is part and parcel of the proposed arrangement, and that arrangement involves an Australian end-user, none of the advice qualifies as advisory activity for the purposes of subsection 121D(7).

Commissioner of Taxation
28/10/93

Previously issued as Draft TD 93/D205

References

ATO references:
NO NAT 93/3707-5

ISSN 1038 - 8982

Subject References:
Offshore banking;
OBUs;
advisory activity;
leveraged lease

Legislative References:
ITAA 121D(7)

TD 93/210 history
  Date: Version: Change:
You are here 28 October 1993 Original ruling  
  13 October 2021 Consolidated ruling Addendum

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