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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of private ruling

Authorisation Number: 1011624772273

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

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Ruling

Subject: Australian taxation implications of proposed lease transactions

The Ruling concerned the following:

    1. Will Z have a permanent establishment (PE) in country X for the purposes of subsection 23AH(2) of the Income Tax Assessment Act 1936 (ITAA 1936) only during the periods of time when equipment that it leases to Y under a relevant equipment operating lease arrangement is in country X?

    2. Is any of the equipment operating lease arrangements a 'qualifying arrangement' for the purposes of section 159GG of the ITAA 1936?

    3. Do any of the equipment operating lease arrangements fall within subsection 159GH(1) of the ITAA 1936 such that Division 16D of the ITAA 1936 will apply to the arrangement?

    4. Will the Commissioner exercise his discretion under subsection 159GG(4) of the ITAA 1936 to determine that an equipment operating lease arrangement will not be taken to be a 'qualifying arrangement' for the purposes of Division 16D of the ITAA 1936 if the answer to either question 2 or 3 is yes?

The Commissioner ruled that:

    1. Yes, Z will have a PE in country X for the purposes of subsection 23AH(2) of the ITAA 1936 only during the periods of time when equipment that it leases to Y under a relevant equipment operating lease arrangement is in country X.

    2. Yes, the equipment operating lease arrangements will be a 'qualifying arrangement' for the purposes of section 159GG of the ITAA 1936.

    3. Yes, the equipment operating lease arrangements will fall within subsection 159GH(1) of the ITAA 1936 such that Division 16D of the ITAA 1936 will apply to the arrangement.

    4. Yes, the Commissioner will exercise his discretion under subsection 159GG(4) of the ITAA 1936 to determine that an equipment operating lease arrangement will not be taken to be a 'qualifying arrangement' for the purposes of Division 16D of the ITAA 1936 if the answer to either question 2 or 3 is yes.


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