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Ruling
Subject: Application of section 128F
Question 1
Will the interest paid by the Rulee in respect of the debt interest satisfy the conditions under subsection 128F(1) of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
Yes
Question 2
If the answer to question 1 is 'yes', will the Rulee have no obligation to withhold an amount from any interest paid under the debt interest under section 12-300 to Schedule 1 of the Taxation Administration Act 1953 (TAA)?
Answer
Yes
This ruling applies for the following periods:
A number of income years
Relevant facts and circumstances
An entity proposes to issue debt interest to fund its project
Relevant legislative provisions
Income Tax Assessment Act 1936 section 128A(1AB)
Income Tax Assessment Act 1936 subparagraph 128B(2)(h)(iv)
Income Tax Assessment Act 1936 paragraph 128F(1)
Taxation Administration Act 1953 schedule 1 paragraph 12-300(a)
Income Tax Assessment Act 1997 section 995-1(e)
Income Tax Assessment Act 1997 Division 974
Reasons for decision
The interest paid by the Rulee in respect of the debt interest will satisfy the conditions under subsection 128F(1) of the ITAA 1936.
The Rulee will have no obligation to withhold an amount from any interest paid under the debt interest under section 12-300 to Schedule 1 of the TAA by virtue of paragraph 12-300(a) of the TAA because section 128F of the ITAA 1936 applies to the interest.