Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 832 - Hybrid mismatch rules  

Subdivision 832-H - Imported hybrid mismatch  

Operative provisions

SECTION 832-625   Meaning of importing payment  

832-625(1)  
A payment an entity (the payer ) makes is an importing payment in relation to an *offshore hybrid mismatch if:


(a) either:


(i) apart from section 832-610 , the payment, or a part of the payment, gives rise to a deduction in an income year covered by subsection (2); or

(ii) the payment, or a part of the payment, gives rise to a *foreign income tax deduction in a foreign country that has *foreign hybrid mismatch rules, in a *foreign tax period covered by subsection (2); and


(b) the payment is made directly, or indirectly through one or more interposed entities, to another entity; and


(c) the other entity (the offshore deducting entity ) is:


(i) the entity that made the payment that gave rise to the offshore hybrid mismatch; or

(ii) if the offshore hybrid mismatch is a *deducting hybrid mismatch - the *deducting hybrid.
Period within which mismatch may be imported

832-625(2)  
For the purposes of paragraph (1)(a), a *foreign tax period or income year is covered by this subsection if:


(a) it ends at or after the end of the foreign tax period in which a *deduction component of the *offshore hybrid mismatch arose; and


(b) it has at least one day in common with that period. Indirect importations

832-625(3)  
For the purposes of determining whether a payment is made indirectly through one or more interposed entities to the offshore deducting entity:


(a) it is sufficient if payments exist between each interposed entity, and it is not necessary to demonstrate that each payment in a series of payments funds the next payment, or is made after the previous payment; and


(b) each payment made by an interposed entity must:


(i) give rise to a *foreign income tax deduction in a country that does not have *foreign hybrid mismatch rules; and

(ii) not give rise to a *deduction/non-inclusion mismatch.
Loss surrender and grouping relief

832-625(4)  
Subsection (5) applies if:


(a) a payment is made to an entity (the first entity ); and


(b) another entity (the second entity ) makes a payment (the second payment ) to a third entity; and


(c) the first entity and the second entity are in the same *Division 832 control group; and


(d) under the law of a foreign country relating to *foreign income tax (except a tax covered by subsection 832-130(7) ):


(i) a *foreign income tax deduction arises in respect of the second payment; and

(ii) the foreign income tax deduction may, as a result of a concessional feature of that law, be transferred to, shared with, or otherwise applied by, the first entity.
Note:

For the meaning of Division 832 control group , see section 832-205 .

832-625(5)  
For the purposes of this section, treat:


(a) a payment as having been made by the first entity to the second entity; and


(b) the payment as having given rise to a *foreign income tax deduction (but not a *deduction/non-inclusion mismatch) in the foreign country mentioned in paragraph (4)(d).


 

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