INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 170 - Treatment of certain company groups for income tax purposes  

Subdivision 170-A - Transfer of tax losses within certain wholly-owned groups of companies  

Conditions for transfer

SECTION 170-35   The loss company  

170-35(1)  
The *loss company:


(a) must be an Australian resident and not a *prescribed dual resident; and


(b) must not be a *dual resident investment company in either the *loss year or the *deduction year.

170-35(2)  
If the *loss year and the *deduction year are the same, it must be the case that the *loss company was not required to calculate the *tax loss:


(a) under section 165-70 (because of a change in ownership or control); or


(b) under section 175-35 (because of injected income or deductions).

170-35(3)  
Also, it must be the case that neither Subdivision 165-A nor Subdivision 175-A would have prevented the *loss company from deducting the *tax loss in the *deduction year if it had had enough assessable income (including *assessable film income) to offset the tax loss.

Note 1:

Subdivision 165-A deals with the deductibility of a company's tax loss for an earlier income year if there has been a change in the ownership or control of the company in the loss year or the income year. Subdivision 175-A is about the Commissioner preventing a company from getting certain tax benefits through its unused tax losses.

Note 2:

Division 707 affects the operation of Subdivision 165-A if the loss company incurred the tax loss because of a transfer under Subdivision 707-A .


 

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