Taxation Determination

TD 2002/28W

Income tax: when can a foreign bank elect not to apply Part IIIB of the Income Tax Assessment Act 1936 (ITAA 1936) in calculating the taxable income attributable to the activities of its Australian branch?

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Notice of Withdrawal

Taxation Determination TD 2002/28 is withdrawn with effect from today.

1. TD 2002/28 explains that a foreign bank with an applicable Double Tax Agreement (DTA) may choose not to apply Part IIIB of the ITAA 1936 in situations where the determination of the taxable income of its Australian branch would be more favourable under the DTA.

2. TD 2002/28 applied to income years commencing after 30 June 1994 and up to, but not including, the first income year commencing after 1 July 2001.

3. TD 2002/28 has no ongoing relevance and is therefore withdrawn without replacement.

Commissioner of Taxation
20 December 2016

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Previously released as TD 2002/D6.

References

ATO references:
NO 1-9N72KXS

Related Rulings/Determinations:

TR 92/1
TR 92/20
TR 97/16
TR 2001/11

Subject References:
Australian branches of foreign banks
Business Profits Article
capital allocation
double tax agreements
foreign banks
notional equity requirement
thin capitalisation

Legislative References:
ITAA 1936 Part IIIB
ITAA 1936 160ZZVB(2)
ITAA 1936 160ZZZB(2)
ITAA 1936 Division 16F
TAA 1953 Part IVAAA

Other References:
The Parliament of the Commonwealth of Australia, Explanatory Memorandum to Income Tax Assessment Bill (No.3) 1994.
OECD Committee on Fiscal Affairs, Commentary on Model Tax Convention on Income and Capital, OECD, Paris (loose leaf).
OECD Committee on Fiscal Affairs, Discussion Draft on Attribution of Profit to Permanent Establishments (February 2001).
OECD Committee on Fiscal Affairs, Model Taxation Convention: Attribution of Income to Permanent Establishments; Issues in International Taxation No.5, OECD, Paris, 1994.
OECD Committee on Fiscal Affairs, Transfer Pricing and Multinational Enterprises: Three Taxation Issues, OECD, Paris, 1984.