Income Tax Assessment Act 1997



Division 832 - Hybrid mismatch rules  

Subdivision 832-C - Hybrid financial instrument mismatch  

Operative provisions

SECTION 832-235   Extended operation of this Subdivision in relation to concessional foreign taxes  

This section applies in working out, for the purposes of this Subdivision, whether an amount is *subject to foreign income tax.

An amount of income or profits of an entity is treated as if it were not *subject to foreign income tax if:

(a) apart from this section, the amount would be *subject to foreign income tax; and

(b) the rate of *foreign income tax (except a tax covered by subsection 832-130(7) ) (the lower rate ) on the amount under the law of the relevant foreign country is lower than the rate (the ordinary rate ) that would ordinarily be imposed on interest income derived by an entity of that kind in the foreign country.

Amount of a deduction/non-inclusion mismatch

However, for the purposes of working out the amount of a *deduction/non-inclusion mismatch that is affected by this section, the amount of a payment that is treated by this section as not being *subject to foreign income tax is to be discounted by multiplying it by the following fraction:

Lower rate
Ordinary rate


lower rate means the lower rate mentioned in paragraph (2)(b).

ordinary rate means the ordinary rate mentioned in paragraph (2)(b).


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