Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 9A - Offshore banking units  

Subdivision A - Object and simplified outline  

SECTION 121B   SIMPLIFIED OUTLINE  

121B(1)   Scope of section.  

The following is a simplified outline of the Division.

121B(2)   Main concepts.  

Subdivision B sets out the concepts used in the Division, the most important being:


(a) OB activity (sections 121D , 121EA and 121EAA ) together with the related definition of offshore person (section 121E ); and


(b) special income and allowable deduction definitions relating to OB activities (sections 121EDA to 121EF ).

121B(3)   Operative provisions.  

Subdivision C contains the operative provisions. Basically, they provide as follows:


(a) an OBU's income from OB activities is taxed at only 10%;


(b) there is a loss of the concession where there is excessive use of non-OB money;


(c) (Repealed by No 143 of 2007 )


(d) income from OB activities is taken to be Australian sourced;


(e) a deemed interest penalty applies to equity provided by an OBU's resident owner;


(f) income of OBU offshore investment trusts is exempt from tax;


(g) income derived by overseas charitable institutions from OBUs is exempt from tax;


(h) certain adjustments are made to the capital gains and losses that flow from disposals of certain interests in trusts of which an OBU is the trustee.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.