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Edited version of private advice
Authorisation Number: 1052202220539
Date of advice: 25 January 2024
Ruling
Subject: Public company
Question 1
Would the Commissioner exercise the discretion under subsection 103A(5) of the Income Tax Assessment Act 1936 (ITAA 1936) to deem A Ltd to be a public company for the purposes of subsection 103A(1) of the ITAA 1936 in relation to the year ending 30 June 202x?
Answer
Yes.
Question 2
If the answer to Question 1 is yes, would A Ltd's Australian wholly owned subsidiaries be public companies for the purposes of subsection 103A(1) of the ITAA 1936 in relation to the year ending 30 June 202x?
Answer
Yes.
This ruling applies for the following period:
1 July 202x to 30 June 202x
The scheme commenced on:
1 July 202x
Relevant facts and circumstances
A Ltd is a public company for corporation's law purposes, and is the head company of an income tax consolidated group for the purposes of Part 3-90 of the Income Tax Assessment Act 1997. Its shares are listed for quotation on the Australian Securities Exchange (ASX) and have been since 200x.
A Ltd and its wholly owned subsidiaries each have an accounting and income tax year ending 30 June.
A Ltd has only one class of shares on issue, being ordinary shares. Each share carries the right to one vote.
A Ltd pays regular dividends in accordance with the ASX listing rules and had a dividend yield of approximately x% for the year preceding 30 June 202x.
A Ltd and its Australian wholly owned subsidiaries have each been, and will be carried on for the purposes of profit or gain to its individual members.
A family group do not control more than 50% of the voting power of shares in A Ltd.
A Ltd has a sufficiently large paid-up capital ($XX million), spread across approximately xxxx shareholders. A substantial shareholder is a widely held public company, holding less than 50% of shares in company A Ltd.
Relevant legislative provisions
Income Tax Assessment Act 1936 subsection 103A(1)
Income Tax Assessment Act 1936 subsection 103A(2)
Income Tax Assessment Act 1936 subsection 103A(3)
Income Tax Assessment Act 1936 subsection 103A(4)
Income Tax Assessment Act 1936 subsection 103A(4B)
Income Tax Assessment Act 1936 subsection 103A(5)
Income Tax Assessment Act 1936 subsection 103A(7)
Reasons for decision
The Commissioner is of the opinion that A Ltd reasonably falls within the concept of a public company and would exercise his discretion under subsection 103A(5) to treat A Ltd as a public company for the purposes of subsection 103A(1) for the year ending 30 June 202x.
Each of the Australian wholly owned subsidiaries of A Ltd is a 'subsidiary of a public company' for the year ended 30 June 202x and is therefore a public company for the purposes of subsection 103A(1) under paragraph 103A(2)(d)(v).
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