Treasury Laws Amendment (Tax Integrity and Other Measures No. 2) Act 2018 (84 of 2018)

Schedule 1   OECD Hybrid Mismatch Rules

Part 3   Application and transitional provisions

Income Tax (Transitional Provisions) Act 1997

14   After Division 830

Insert:

Division 832 - Hybrid mismatch rules

Table of Subdivisions

832-A Application of Division 832 of the Income Tax Assessment Act 1997

Subdivision 832-A - Application of Division 832 of the Income Tax Assessment Act 1997

Table of sections

832-10 Application of Division 832 of the Income Tax Assessment Act 1997 (other than imported hybrid mismatch rule)

832-15 Application of imported hybrid mismatch rule

832-10 Application of Division 832 of the Income Tax Assessment Act 1997 (other than imported hybrid mismatch rule)

(1) The Subdivisions of Division 832 of the Income Tax Assessment Act 1997 covered by subsection (2) apply to assessments for income years starting on or after 1 January 2019.

(2) The Subdivisions are as follows:

(a) Subdivision 832-C (Hybrid financial instrument mismatch);

(b) Subdivision 832-D (Hybrid payer mismatch);

(c) Subdivision 832-E (Reverse hybrid mismatch);

(d) Subdivision 832-F (Branch hybrid mismatch);

(e) Subdivision 832-G (Deducting hybrid mismatch);

(f) Subdivision 832-J (Integrity rule).

832-15 Application of imported hybrid mismatch rule

(1) Subdivision 832-H (Imported hybrid mismatch) of the Income Tax Assessment Act 1997 applies to assessments for income years starting on or after 1 January 2019.

(2) However, in applying Subdivision 832-H to assessments for income years starting before 1 January 2020, items 2 and 3 of the table in subsection 832-615(2) are to be disregarded.

(3) Despite subsection (1), Subdivision 832-H does not apply in relation to an offshore hybrid mismatch unless a deduction component of the mismatch arose in a foreign tax period that ends in an income year starting on or after 1 January 2019.

(4) In determining whether subsection (3) is satisfied in relation to an offshore hybrid mismatch, disregard section 832-635 of the Income Tax Assessment Act 1997.