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Edited version of private advice
Authorisation Number: 1052252787941
Date of advice: 20 May 2024
Ruling
Subject: Foreign company
Question
Will ForeignCo be treated as a company for the purposes of section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
This ruling applies for the following periods:
1 January 2024 to 31 December 2028
The scheme commenced on:
1 January 2024
Relevant facts and circumstances
ForeignCo was created under a foreign law and undertakes income producing activities in Australia.
ForeignCo will be a non-resident of Australia and is prohibited from offering participation in the fund outside of the foreign country. ForeignCo will not have a permanent establishment in Australia and its investors are non-residents of Australia.
ForeignCo is treated as an opaque entity that is governed by a non-transparent taxation regime for the foreign country's tax purposes.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 995-1
Does IVA apply to this private ruling?
Part IVA of the Income Tax Assessment Act 1936 contains anti-avoidance rules that can apply in certain circumstances where you or another taxpayer obtains a tax benefit, imputation benefit or diverted profits tax benefit in connection with an arrangement.
If Part IVA applies, the tax benefit or imputation benefit can be cancelled (for example, by disallowing a deduction that was otherwise allowable) or you or another taxpayer could be liable to the diverted profits tax.
We have not fully considered the application of Part IVA to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part.
If you want us to rule on whether Part IVA applies, we will need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply.
For more information on Part IVA, go to our website ato.gov.au and enter 'part iva general' in the search box on the top right of the page, then select 'Part IVA: the general anti-avoidance rule for income tax'.
Reasons for decision
ForeignCo meets all the relevant requirements to constitute a 'company' for the purposes of section 995-1 of the ITAA 1997.