INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 9A - Offshore banking units  

Subdivision C - Operative provisions  

SECTION 121EG   REDUCTION OF ASSESSABLE OB INCOME, ALLOWABLE OB DEDUCTIONS AND FOREIGN INCOME TAX PAID  

121EG(1)   Only eligible fraction of assessable OB income is assessable.  

Subject to section 121EH , the assessable income of an OBU includes only the eligible fraction of each amount of assessable OB income derived by the OBU.

121EG(2)   Only eligible fraction of allowable OB deductions is allowable.  

Subject to section 121EH , only the eligible fraction of each allowable OB deduction of an OBU is an allowable deduction of the OBU.

121EG(3)   Remaining amounts not exempt income etc.  

For the purposes of this Act:


(a) any amount of assessable OB income of an OBU that, because of subsection (1), is not included in its assessable income is taken not to be exempt income of the OBU; and


(b) any part of an allowable OB deduction of an OBU that, because of subsection (2), is not an allowable deduction of the OBU is taken not to be an expense or outgoing incurred in deriving exempt income of the OBU.

121EG(3A)   Only eligible fraction of foreign income tax is taken to be paid.  

Subject to section 121EH , this Act applies to an OBU as if only the eligible fraction of each amount of foreign income tax (within the meaning of the Income Tax Assessment Act 1997 ) the OBU paid in respect of an amount of assessable OB income had been paid in respect of that income.

121EG(4)   Meaning of eligible fraction .  

In this section:

eligible fraction
means 10 divided by the number of percent in the corporate tax rate.


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