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Draft Taxation Determination

TD 94/D2

Income tax: can convertible notes qualify as infrastructure borrowings under Division 16L of Part III of the Income Tax Assessment Act 1936 ?

  • Please note that the PDF version is the authorised version of this draft ruling.
    This document has been finalised by TD 94/49.

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. Yes. Borrowings that are issued in the form of notes convertible into shares may constitute infrastructure borrowings. The income exemption period would terminate when the notes are converted into shares. On conversion, the shares will not be infrastructure borrowings.

2. The income exemption applies only to interest or amounts in the nature of interest. Other payments which are not interest or in the nature of interest made on the notes would not qualify for exemption.

Commissioner of Taxation
13 January 1994

References


BO Public Infrastructure Unit DTD/14

ISSN 1038 - 8982

Subject References:
exemption period
infrastructure borrowings

Legislative References:
ITAA 159GZZZU
ITAA Pt III Div 16L


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