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Edited version of your written advice
Authorisation Number: 1012683346336
Ruling
Subject: Impairment loss and conduit foreign income
The ruling concerned the following:
1. Is the impairment loss booked in the accounts of a subsidiary member of the tax consolidated group an expense reasonably related to the dividend received by that entity from a non-resident company, pursuant to subsection 802-30(5) of the Income Tax Assessment Act 1997 (ITAA 1997), and therefore a reduction to the head company of the tax consolidated group's conduit foreign income?
Decision
The Commissioner ruled that:
1. No. The impairment loss booked in the accounts of a subsidiary member of the tax consolidated group is not an expense reasonably related to the dividend received by that entity from a non-resident company, pursuant to subsection 802-30(5) of the ITAA 1997, and therefore does not reduce the head company of the tax consolidated group's conduit foreign income.
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