INCOME TAX ASSESSMENT ACT 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-FB - Grouping branches of foreign banks and foreign financial entities with a consolidated group, MEC group or single Australian resident company  

Choice to group with branches of foreign banks and foreign financial entities

SECTION 820-599   Choice by Australian resident company outside consolidatable group and MEC group  

820-599(1)  
This section applies if there is a period (also the grouping period ) for which all these conditions are met:


(a) the period was all or part of an income year of a company (the single company );


(b) throughout the period the single company:


(i) was an *Australian entity; and

(ii) was not a *prescribed dual resident; and

(iii) was not a *member of a *consolidatable group; and

(iv) was not a member of a *consolidated group; and

(v) was not a member of a *MEC group;


(c) the single company and an entity (the establishment entity ) covered by one of the following subparagraphs are both members of the same *wholly-owned group throughout the period:


(i) a *foreign bank that carried on its banking *business in Australia through at least one *Australian permanent establishment at each time in the period;

(ii) a *foreign entity that was a *financial entity and had at least one Australian permanent establishment at each time in the period;


(d) there is not a longer period in the income year for which the conditions in paragraphs (a), (b) and (c) are met in relation to the single company and the establishment entity.

Note:

It does not matter whether the income year ended on the same day for the single company and the establishment entity.

820-599(2)  
The single company may choose to have all of the *Australian permanent establishments of the establishment entity treated as part of the single company for the grouping period for the purposes of this Division.

820-599(3)  
If the conditions in subsection (1) are met in relation to the single company and more than one other establishment entity, the single company may make a different choice in relation to each of the other establishment entities.


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