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Edited version of private advice
Authorisation Number: 1052144302318
Date of advice: 25 July 2023
Ruling
Subject: Business continuity test
Question
Will Company A satisfy the business continuity test in section 165-13 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
Facts
Company A is an Australian company with carried forward tax losses.
Company A is the head company of an income tax consolidated group under Part 3-90 of the ITAA 1997.
Company A has failed the continuity of ownership test in section 165-12 of the ITAA 1997 in respect of it's carried forward tax losses.
Company A proposes to undertake certain activities in a foreign country (through subsidiaries) which are identical to some of the activities Company A currently undertakes in Australia.
Reasons for decision
Having regard to the activities of Company A immediately before the relevant 'test time' (worked out under subsection 165-13(2) of the ITAA 1997) and the proposed activities, Company A will satisfy the business continuity test in section 165-13 of the ITAA 1997.