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Edited version of private ruling
Authorisation Number: 1011745475486
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Ruling
Subject: Superannuation fund for foreign residents
Issue
Is the foreign entity a superannuation fund for foreign residents for the purposes of section 118-520 of the Income Tax Assessment Act 1997 (ITAA 1997) and therefore its dividend and interest income is income to which paragraph 128B(3)(jb) of the Income Tax Assessment Act 1936 (ITAA 1936) applies?
Answer
Yes. The foreign entity is a superannuation fund for foreign residents for the purposes of section 118-520 of the ITAA1997 and therefore its dividend and interest income is income to which paragraph 128B(3)(jb) of the ITAA 1936 applies.
Decision
The requirements of paragraph 128B(3)(jb) have been satisfied. Therefore, section 128B does not impose WHT on the payment of interest or dividends by a resident to the foreign entity.
Facts
The fund and foreign corporation are 'non-residents' as defined in subsection 6(1) of the ITAA 1936.
The foreign corporation is the operator of the superannuation fund (the fund).
The fund was established in the taxpayer's country of residence and is a superannuation fund for foreign residents under section 118-520 of the ITAA 1997 and a 'foreign superannuation fund' under the definition of that term in subsection 995-1(1) of the ITAA 1997.
In its capacity as operator of the fund, the foreign corporation derived income consisting of dividends and interest paid by Australian resident companies.
The income derived by the foreign corporation is income to which paragraph 128B(3)(jb) of the ITAA 1936 applies.
Reasons for Decision
The foreign corporation is an instrument of the foreign government by which it exercises its governmental functions and is thereby, a part of the foreign government. The income is derived by the foreign government in its capacity as the operator of the superannuation fund. Therefore, the superannuation fund income is income to which subparagraph 128B(3)(jb)(i) of the ITAA 1936 applies.