Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 11A - Dividends, interest and royalties paid to non-residents and to certain other persons  

Subdivision A - General  

SECTION 128NBA   CREDITS IN RESPECT OF AMOUNTS ASSESSED IN RELATION TO CERTAIN FINANCIAL ARRANGEMENTS  

When section applies

128NBA(1)  
This section applies if:


(a) the amount of any withholding tax that has become payable by a taxpayer on a payment of interest under, or in relation to the transfer of, a qualifying security or a Division 230 financial arrangement has been paid; and


(b) there is a net financial arrangement amount (see subsection (5)) in relation to the taxpayer in relation to:


(i) if the payment of interest is a payment in relation to the transfer of the qualifying security - the security; or

(ii) if the payment of interest is such a payment by virtue of the application of section 128AC in relation to an attributable agreement payment within the meaning of that section - the attributable agreement payment; or

(iii) in any other case - the payment of interest; and


(c) the amount of the withholding tax payable on the interest exceeds the amount that would have been payable on the interest if the interest were reduced by the net financial arrangement amount.

Entitlement to apply for credit

128NBA(2)  
The taxpayer may apply to the Commissioner for a credit of an amount equal to the excess. Requirements for application

128NBA(3)  
The application must be in the approved form. Entitlement to credit

128NBA(4)  
If the Commissioner is satisfied as to the matters mentioned in paragraphs (1)(a), (b) and (c), the applicant is entitled to a credit of an amount equal to the excess. Net financial arrangement amount

128NBA(5)  


For the purposes of this section, if:


(a) in the case of a qualifying security - the sum of all amounts (if any) included in the assessable income of the taxpayer of any years of income in relation to the qualifying security, attributable agreement payment or payment of interest under section 159GQ ; or


(b) in the case of a Division 230 financial arrangement - the sum of all amounts (if any) included in the assessable income of the taxpayer of any years of income in relation to the arrangement under Division 230 of the Income Tax Assessment Act 1997 ;

exceeds:


(c) in the case of a qualifying security - the sum of all amounts (if any) allowable as deductions from the assessable income of the taxpayer of any years of income in relation to the security or the payment, as the case may be, under that section; or


(d) in the case of a Division 230 financial arrangement - the sum of:


(i) all amounts (if any) allowable as deductions from the assessable income of the taxpayer of any years of income in relation to the arrangement under Division 230 of the Income Tax Assessment Act 1997 ; and

(ii) all amounts (if any) of interest paid under the arrangement before the interest mentioned in paragraph (1)(a) is paid;

there is a net financial arrangement amount equal to the excess.

128NBA(6)  


For the purposes of paragraph (5)(b) and subparagraph (5)(d)(i), disregard any year of income in which the taxpayer was not an Australian resident.

128NBA(7)  


For the purposes of subsection (6):


(a) if section 230-485 of the Income Tax Assessment Act 1997 applies in relation to a year of income:


(i) treat the foreign residency period mentioned in that section as a year of income in which the taxpayer was not an Australian resident; and

(ii) treat the Australian residency period mentioned in that section as a year of income in which the taxpayer was an Australian resident; and


(b) if section 230-490 of that Act applies in relation to a year of income:


(i) treat the period during that year in which the taxpayer was not an Australian resident as a year of income in which the taxpayer was not an Australian resident; and

(ii) treat the period during that year in which the taxpayer was an Australian resident as a year of income in which the taxpayer was an Australian resident.

 

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