INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 719 - MEC groups  

Subdivision 719-B - MEC groups and their members  

Basic concepts

SECTION 719-15   What is an eligible tier-1 company ?  

719-15(1)  
A *tier-1 company of a *top company is an eligible tier-1 company if subsection (2) does not apply to the tier-1 company.

719-15(2)  
This subsection applies to a *tier-1 company if:


(a) there are one or more entities interposed between the tier-1 company and the *top company; and


(b) the conditions in subsection (3) are satisfied in relation to at least one of those interposed entities.

719-15(3)  
For the purposes of paragraph (2)(b), the conditions are as follows:


(a) the interposed entity must be one of the following:


(i) a company that is a foreign resident;

(ii) a *prescribed dual resident;

(iii) a trust that does not meet the conditions in item 1, 2 or 3 of the table in section 703-25;

(iv) a trust that meets the conditions in item 1, 2 or 3 of the table in section 703-25 and is not a *wholly-owned subsidiary of another *tier-1 company of the *top company;

(v) an entity covered by an item in the table in section 703-20;

(vi) a company that is an Australian resident, where no part of its taxable income (if any) would be taxable at a rate that is or equals the *general company rate;

(vii) a non-profit company (as defined in the Income Tax Rates Act 1986) that is a wholly-owned subsidiary of another tier-1 company of the top company;


(b) the interposed entity must not hold *membership interests only as nominee of one or more entities each of which is:


(i) another tier-1 company of the top company; or

(ii) an entity that is a wholly-owned subsidiary of another tier-1 company of the top company;


(c) at least one of the following entities must hold a membership interest in the interposed entity:


(i) another tier-1 company of the top company;

(ii) a wholly-owned subsidiary of another tier-1 company of the top company;

(iii) an entity that holds membership interests only as a nominee of one or more entities each of which is mentioned in subparagraph (i) or (ii).

719-15(4)  
For the purposes of subparagraphs (3)(a)(iv) and (vii) and paragraphs (3)(b) and (c), in determining whether an entity is a wholly-owned subsidiary of another *tier-1 company of the *top company, assume that all of the *membership interests that are beneficially owned by tier-1 companies of the top company were owned by a single tier-1 company of the top company.


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