Income Tax Assessment Act 1997
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Hide history noteSECTION 165-126 Alternatively, the company must satisfy the business continuity test 165-126(1)
This section sets out the condition that a company must meet to be able to deduct a debt or part of a debt that it writes off as bad in the *current year if:
(a) either:
(i) the company fails to meet a condition in subsection 165-123(2) , (3) or (4) ; or
(ii) it is not practicable to show that the company meets the conditions in those subsections; and
(b) paragraph 165-120(1)(b) (about the Commissioner thinking it is unreasonable to require the company to meet the conditions in section 165-123 ) does not apply.
Note:
Other provisions may treat the company as meeting, or failing to meet, the conditions in subsections 165-123(2) , (3) and (4) .
165-126(2)
The company must satisfy the *business continuity test for the *second continuity period (the business continuity test period ). Apply the test to the *business the company carried on immediately before the time (the test time ) shown in the relevant item of the table.
| Test time | ||
| Item | If: | The test time is: |
| 1 | It is practicable to show there is a period that meets these conditions:
(a) the period starts at the start of the *first continuity period; (b) the company would meet the conditions in subsections 165-123(2), (3) and (4) if the period were the *ownership test period for the purposes of this Act |
The latest time that it is practicable to show is in the period |
| 2 | Item 1 does not apply and either:
(a) the debt was incurred before the *current year; or (b) the company came into being during the current year |
The end of the day on which the debt was incurred |
| 3 | All these conditions are met:
(a) item 1 does not apply; (b) the debt was incurred in the *current year; (c) the company was in being throughout the current year |
The start of the current year |
For the business continuity test: see Subdivision 165-E .
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