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Edited version of your written advice
Authorisation Number: 1051204086869
Date of advice: 17 March 2017
Ruling
Subject: Deductibility of expenses
Question 1
Are all payments made by AusCo to ForeignCo under the Facility Agreement characterized as interest or in the nature of interest for Australian income tax purposes?
Answer
No, only the amounts payable under Clause 9 of the Facility Agreement are interest within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 (ITAA 1936).
Question 2
Will all the payments made by AusCo be subject to interest withholding tax of 10% pursuant to Section 128B of the ITAA 1936?
Answer
No
Question 3
Are the payments made by AusCo under the Facility Agreement deductible to AusCo pursuant to Division 230 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 201X
Year ended 30 June 201X
Year ending 30 June 201X
The scheme commences on:
1 June 201X
Relevant legislative provisions
Income Tax Assessment Act 1936 (ITAA 1936) subsection 6(1)
ITAA 1936 section 51AAA
ITAA 1936 Division 7A of Part III
ITAA 1936 Division 11A of Part III
ITAA 1936 subsection 128A(1AB)
ITAA 1936 subsection 128A(1AC)
ITAA 1936 subsection 128A(1AD)
ITAA 1936 section 128B
ITAA 1936 subsection 128B(2)
ITAA 1936 subparagraph 128B(3)(a)(ii)
ITAA 1936 subparagraph 128B(3)(h)(ii)
ITAA 1936 subsection 128B(5)
Taxation Administration Act 1953 (TAA 1953) section 11-5 of Schedule 1
TAA 1953 Division 12 of Schedule 1
TAA 1953 section 12-10 of Schedule 1
TAA 1953 section 12-245 of Schedule 1
TAA 1953 paragraph 12-300(a) of Schedule 1
TAA 1953 Division 14 of Schedule 1
TAA 1953 section 14-5 of Schedule 1
TAA 1953 subsection 16-70(1) of Schedule 1
Income Tax Assessment Act 1997 (ITAA 1997) section 8-1
ITAA 1997 section 26-25
ITAA 1997 Division 230
ITAA 1997 subsection 230-15(2)
ITAA 1997 section 230-45
ITAA 1997 subsection 230-45(1)
ITAA 1997 subsection 230-45(2)
ITAA 1997 paragraph 230-45(2)(g)
ITAA 1997 subsection 230-45(3)
ITAA 1997 subsection 230-45(4)
ITAA 1997 subsection 230-45(5)
ITAA 1997 section 230-50
ITAA 1997 section 230-55
ITAA 1997 subsection 230-55(4)
ITAA 1997 Subdivision 230-B
ITAA 1997 section 230-100
ITAA 1997 subsection 230-100(2)
ITAA 1997 subsection 230-100(3)
ITAA 1997 subsection 230-100(4)
ITAA 1997 subsection 230-100(5)
ITAA 1997 subsection 230-105(1)
ITAA 1997 subsection 230-105(2)
ITAA 1997 section 230-115
ITAA 1997 section 230-180
ITAA 1997 section 230-455
ITAA 1997 subsection 974-160(1)
ITAA 1997 subsection 995-1(1).
Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of X for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income [1969] ATS 14
Protocol amending the Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of X for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income [1990] ATS 3