Taxation Determination

TD 95/3W

Income tax: Offshore Banking Units (OBU): is an OBU required to maintain separate bank accounts and separate nostro accounts?

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FOI status:

Notice of Withdrawal

Taxation Determination TD 95/3 is withdrawn with effect from today.

1. Taxation Determination TD 95/3 deals with whether an Offshore Banking Unit (OBU) is required to maintain separate bank accounts and separate nostro accounts for its OBU activities. It provides that an OBU must maintain separate bank accounts and separate nostro accounts.

2. TD 95/3 is being withdrawn because of the effect of subsection 262(1AA) of the Income Tax Assessment Act 1936, which was inserted by Taxation Laws Amendment Act (No. 2) 1999. That subsection provides that an OBU is not required to maintain separate nostro and vostro accounts. The subsection has effect from the year of income before the year of income in which 2 July 1998 occurs.

3. Accordingly, it has not been necessary for OBUs to maintain separate bank accounts for OBU activities since subsection 262(1AA) applied. However, the separate requirement, as specified in subsection 262A(1A) of the Income Tax Assessment Act 1936, that an OBU must maintain separate accounting records in respect of its OB activities, remains in force.

Commissioner of Taxation
27 October 2004

Previously issued as draft TD 93/D213

References

ATO references:
NO NAT 93/3707-5; 95/460-8

Subject References:
offshore banking;
record keeping;
nostro accounts

Legislative References:
ITAA 262A