Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-FA - How the thin capitalisation rules apply to consolidated groups and MEC groups  

Operative provisions

SECTION 820-585   Exemption for consolidated group headed by foreign-controlled Australian ADI or its holding company  

820-585(1)  
This Division does not disallow any of a *debt deduction for an income year if:


(a) the debt deduction is of the *head company of a *consolidated group and the head company satisfies subsection (2) for that income year; or


(b) the debt deduction is an amount incurred by the head company of a consolidated group during a period that is part of that income year, and the head company satisfies subsection (2) for that period.

820-585(2)  
The *head company satisfies this subsection for a period that is all or part of an income year if, throughout that period:


(a) the head company is both a *foreign controlled Australian company and an *ADI (and would also be an ADI apart from Part 3-90 (about consolidation of groups)); or


(b) the head company:


(i) is a *foreign controlled Australian company; and

(ii) beneficially owns all the *membership interests in a *member of the group that is both a *foreign controlled Australian entity and an *ADI throughout that period; and

(iii) would, apart from Part 3-90 (about consolidation of groups), have no other assets and no *debt capital;

unless at least one member of the group would, apart from that Part and this Subdivision, be an *outward investing entity (non-ADI) or *outward investing entity (ADI) for all or part of that period.

820-585(3)  


Subsection (1) does not apply if, at each time in the period mentioned in subsection (2), all the *ADIs that are *members of the group then are *specialist credit card institutions.

 

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