Private ruling: Income tax exempt status
Published: October 2012
Ruling period: 1 July 2012 to 30 June 2015
Date scheme commenced: Late September 2007

Ruling: Q1: Is the entity exempt from income tax under section 24AM of the Income Tax Assessment Act 1936 ("ITAA 1936") on the basis that it is a State/Territory body (an "STB")? | A1: Yes

Relevant facts and circumstances: This is a company limited by shares registered late September 2007. All of the shares are owned by a Council.

Relevant legislative provisions: ITAA 1936 Section 24AM | ITAA 1936 Section 24AN | ITAA 1936 Section 24AO | ITAA 1936 Section 24AT | Issue 1 | Question 1: | Summary | This is an STB because it is a company limited solely by shares and its shares are beneficially owned by a government entity. | Detailed reasoning | Under section 24AO of the ITAA 1936 a body is an STB if: | · it is a company limited solely by shares; and | · all of the shares in it are beneficially owned by one or more government entities. | A government entity is defined under section 24AT of the ITAA 1936 as: | · a State; or | · a Territory; or | · a municipal corporation or other local governing body. | Given that this is a company limited solely by shares and whose shares are entirely owned by a municipal corporation, it is accepted that this company is an STB. | Section 24AM of the ITAA 1936 provides that the income of an STB will not be exempt if section 24AN applies to the STB. | Section 24AN of the ITAA 1936 provides that an STB will not be exempt from income tax if it is an excluded STB. | An excluded STB is defined under section 24AT of the ITAA 1936 as an STB that: | · at a particular time, is prescribed as an excluded STB in relation to that time; or | · is a municipal corporation or other local governing body | · is a public educational institution to which any of paragraphs 50-55(a) to (c) of the Income Tax Assessment Act 1997 applies; or | · is a public hospital to which any of paragraphs 50-55(a) to (c) of the Income Tax Assessment Act 1997 applies; or · is a superannuation fund. | This company is not any of the above therefore it is not an excluded STB.


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