Private ruling: Withholding tax - interest payments
Date of advice: 16 February 2026
Published: 7 April 2026
Ruling period: 1 January XXXX to 31 December XXXX
Date scheme commenced: 1 January XXXX

Ruling: Q1: Does a liability to withholding tax arise in respect of interest income derived by and paid to the non-resident Lenders as a result of the Facility Agreements under subparagraph 128B(2)(b)(i) of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: Yes, a liability to withholding tax arises in respect of interest income derived by and paid to the non-resident Lenders as a result of the Facility Agreements under subparagraph 128B(2)(b)(i) of the ITAA 1936. | Q2: Does Company A have an obligation to withhold tax under section 12-245 of Schedule 1 to the Tax Administration Act 1953 (TAA 1953) and remit it to the ATO under subsection 16-70(1) of Schedule 1 to the TAA 1953, in respect of the interest paid to the non-resident Lenders under the Facility Agreements? | A2: Yes, Company A has an obligation to withhold tax under section 12-245 of Schedule 1 to the TAA 1953 and remit it to the ATO under subsection 16-70(1) of Schedule 1 to the TAA 1953, in respect of the interest paid to the non-resident Lenders under the Facility Agreements. | Q3: Is the interest income derived by the non-resident Lenders in respect of the Facility Agreements subject to interest withholding tax at a rate of 10% in accordance with subsection 128B(5) of the ITAA 1936? | A3: Yes, the interest income derived by the non-resident Lenders in respect of the Facility Agreements is subject to interest withholding tax at a rate of 10% in accordance with subsection 128B(5) of the ITAA 1936.

Relevant facts and circumstances: Company A 1. Company A is a company incorporated in Australia and resident of Australia for tax purposes. 2. Company A is a member of a multiple entry consolidated group (MEC Group). 3. During the ruling period, Company A entered into the Facility Agreements. 4. Company A did not carry on a business in a country outside Australia at or through a permanent establishment during the ruling period. 5. The purposes of the funding borrowed under the Facility Agreements was for the purposes of the MEC Group's business in Australia. The Facility Agreements 6. The Lenders under the Facility Agreements are tax residents in Countries outside of Australia and all have listed addresses outside of Australia. 7. Relevantly, under the terms of the Facility Agreements: (a) A Facility Loan arose in respect of each loan made under the Facility Agreements. (b) Company A was obliged to pay accrued interest in respect of each Facility Loan at a determined rate and in accordance with a schedule determined by the relevant clauses of the Facility Agreements. Payment of withholding tax 8. In accordance with its understanding of the terms of the Facility Agreement, during the ruling period Company A withheld tax from payments of interest it made to the Lenders. 9. Company A applied a withholding tax rate of 10% on all payments of interest it made to the Lenders under the Facility Agreements. 10. The application for a private ruling states that withholding tax has been remitted to the ATO by Company A. Other Information 11. The Lenders did not loan funds under the Facility Agreements through an Australian branch or permanent establishment. 12. At no time were the Lenders centrally managed and controlled from Australia. 13. At no time was the majority of the voting power of the Lenders controlled by Australian residents.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 128A(1AB) | Income Tax Assessment Act 1936 section 128B | Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974 paragraph 7(b) | Tax Administration Act 1953 section 12-245 of schedule 1 | Tax Administration Act 1953 subsection 16-70(1) of schedule 1