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Draft Taxation Determination

TD 93/D198

Income tax: Offshore Banking Units (OBU) - where a non-resident has an Australian branch and an Australian subsidiary, and the subsidiary is registered as an OBU, does any share capital subscribed in the subsidiary by the parent fall within the definition of 'non-OB money'?

  • Please note that the PDF version is the authorised version of this draft ruling.
    This document has been finalised by TD 93/204.

FOI status:

draft only - for comment

Preamble

Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.

1. No, unless the share capital is subscribed by the Australian branch.

2. The definition of 'non-OB money' in section 121C of the Income Tax Assessment Act 1936 excludes share capital subscribed in the OBU by a non-resident, unless the payment of the subscription moneys occurred in the carrying on of a business in Australia by the non-resident, at or through a permanent establishment (eg a branch) of the non-resident.

3. It is quite clear from the wording of the definition that the only circumstances where share capital subscribed by a non-resident could constitute non-OB money would be where the funds flow directly from the Australian branch.

Commissioner of Taxation
19/8/93

References


BO 93/3707-5

ISSN 1038 - 8982

Subject References:
Offshore banking
OBUs
non-OB-money

Legislative References:
ITAA 121C


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