Private ruling: Syndicated loan facility
Date of advice: 10 July 2024
Published: 19 August 2024
Ruling period: Year ending 31 December 20XX | Year ending 31 December 20XX | Year ending 31 December 20XX | Year ending 31 December 20XX | Year ending 31 December 20XX
Date scheme commenced: 1 January 20XX

Ruling: Q1: Will the Syndicated Facility Agreement (as defined below) constitute a 'syndicated loan facility' for the purposes of the definition of a 'syndicated loan facility' in subsection 128F(9) of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: Yes. | Q2: Will each of the loans made pursuant to the Syndicated Facility Agreement constitute a 'syndicated loan' for the purpose of the definition of a 'syndicated loan' in subsection 128F(9) of the ITAA 1936? | A2: Yes. | Q3: Do the invitations to the Offerees (as defined below) to become lenders under the Syndicated Facility Agreement satisfy the public offer test in subsection 128F(3A) of the ITAA 1936? | A3: Yes. | Q4: Will the invitations to the Offerees to become lenders under the Syndicated Facility Agreement otherwise fail the public offer test in subsection 128F(3A) due to the application of subsection 128F(5AA) of the ITAA 1936? | A4: No. | Q5: Will subsection 128F(2) of the ITAA 1936 apply such that interest paid by XXXX on each syndicated loan issued under the Syndicated Facility Agreement is not subject to tax imposed under Division 11A of Part III of the ITAA 1936? | A5: Yes. | Q6: Will XXXX have no obligation under section 12-300 of Schedule 1 to the Tax Administration Act 1953 (TAA) to withhold an amount from any interest paid under the Syndicated Facility Agreement by virtue of subsection 12-300(a) of Schedule 1 to the TAA because section 128F of the ITAA 1936 applies to the interest? | A6: Yes.

Relevant facts and circumstances: XXXX 1. XXXX is a company incorporated in Australian and an Australian resident for Australian taxation purposes. 2. XXXX is in the process of undertaking a large-scale project (the Project). Funding 3. The Project will be funded by XXXX via a contribution from shareholders as well as debt funding. 4. XXXX will be the sole borrower of debt for the Project. 5. To facilitate obtaining debt finance, XXXX has appointed ZZZZ Bank to be the Coordinating Mandated Lead Arranger and Bookrunner (CMLAB) for a senior secured syndicated term loan facility of greater than A$xxx million (the Facility). 6. The terms of XXXX engagement as the CMLAB are outlined in the mandate letter between ZZZZ Bank and XXXX (the Mandate Letter). 7. As the CMLAB for the Facility, ZZZZ Bank coordinates, monitors and makes arrangements in relation to all aspects of the Facility, including: i. Coordinating the selection of lenders to participate in the proposed Facility. ii. Inviting the potential lenders to participate in the Facility. iii. Arranging for the Facility to be made available to XXXX. iv. Assisting XXXX to explain and discuss the arrangements around the Facility to the proposed lenders. 8. Within 30 days of XXXX acceptance of the Mandate Letter, ZZZZ Bank sent invitation letters (the Invitation Letter) to greater than 10 potential lenders (collectively the potential lenders are referred to as the 'Offerees') 9. The Invitation Letter was sent to each of the Offerees separately. 10. The Invitation Letter invites the Offerees to participate in the Facility on a several basis with a minimum hold amount. Acceptance and final allocation of each institution's commitment amount is determined at the sole discretion of the ZZZZ Bank (as the CMLAB), in consultation with XXXX. 11. At the time the Invitation Letter was sent to the Offerees, at least ten of the Offerees were not known or suspected by XXXX to be associates of each other or of XXXX. 12. When determining the Offerees invited to participate in the Facility, the potential lenders were screened through publicly available information to determine the shareholder structure. The list of potential lenders was discussed and cleared with XXXX before ZZZZ Bank (as the CMLAB) issued the invitation letter to the Offerees. 13. ZZZZ Bank received commitment letters from at least 2 of the Offerees to participate in the Facility (collectively the lenders are referred to as the 'Lenders'). 14. The draft Senior Syndicated Term Loan Facility Agreement (the Syndicated Facility Agreement) outlines the key terms of the Facility. Key terms of the Syndicated Facility Agreement 15. Clause X of the Syndicated Facility Agreement states that the loan is an Australian dollar term loan facility. 16. Under clause X of the Syndicated Facility Agreement, ZZZZ Bank (as the CMLAB) confirms to XXXX that it has made invitations to become a lender under the agreement to at least ten parties, it believed carried on the business of providing finance or investing or dealing in securities in the course of operating in financial markets. 17. Under clause X of the Syndicated Facility Agreement, XXXX confirms that: i. none of the Offerees whose names were disclosed to it by the CMLAB before the date of this Agreement were known or suspected by it to be an Offshore Associate of XXXX, and ii. at least 10 of the parties to whom the CMLAB made invitations were not, as at the date the invitations were made, known or suspected by it to be associates of any of the others of those 10 offerees. 18. Under clause X of the Syndicated Facility Agreement, each Lender represents and warrants to XXXX that: i. it carries on the business of providing finance, or investing or dealing in securities, in the course of operating in financial markets, and ii. it is not, and it will not be, so far as it has actual knowledge, an associate of any other Lender or an Offshore Associate of XXXX. 19. Clause x of the Syndicated Facility Agreement states that the parties agree that agreement is a 'syndicated facility agreement' for the purposes of section 128F of the ITAA 1936. Other 20. XXXX as the borrower will have access to at least A$X million at the time the first loan is provided under the Syndicated Facility Agreement. 21. All the Lenders party to the Syndicated Facility Agreement have an address outside of Australia. 22. Amounts classified as interest under the Syndicated Facility Agreement will be in the nature of interest for Australian withholding tax purposes pursuant to section 128A of ITAA 1936. 23. XXXX will be an Australian tax resident company at the time of issue of the debt interests and at the time interest is paid in respect of the debt interests.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 128F(2) | Income Tax Assessment Act 1936 subsection 128F(3A) | Income Tax Assessment Act 1936 subsection 128F(5AA) | Income Tax Assessment Act 1936 subsection 128F(9) | Tax Administration Act 1953 Schedule 1 section 12-300 | Tax Administration Act 1953 Schedule 1 subsection 12-300(a)

Reasons for decision: Summary: The Syndicated Facility Agreement constitutes a 'syndicated loan facility' as defined in subsection 128F(9) of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: According to subsection 128F(9) of the ITAA 1936, the term 'syndicated loan facility' has the meaning given by subsections 128F(11), 128F(12) and 128F(13) of the ITAA 1936. In the present case, as the Syndicated Facility Agreement involves multiple lenders and a single borrower, subsection 128F(11) of the ITAA 1936 is the relevant provision. Subsection 128F(11) of the ITAA 1936 states: A written agreement is a syndicated loan facility if: a) the agreement describes itself as a syndicated loan facility or syndicated facility agreement; and b) the agreement is between one or more borrowers and at least 2 lenders; and c) under the agreement each lender severally, but not jointly, agrees to lend money to, or otherwise provide financial accommodation to, the borrower or borrowers; and d) the amount to which the borrower or borrowers will have access at the time the first loan or other form of financial accommodation is to be provided under the agreement is at least $xxx,xxx,xxx(or a prescribed amount). Based on the information provided, the Syndicated Facility Agreement constitutes a syndicated loan facility under subsection 128F(11) of the ITAA 1936 on the basis that: • it is a written agreement which describes itself as a syndicated facility agreement • the Facility is between one borrower, being XXXX, and at least two lenders • each lender has severally, but not jointly, agreed to lend money to XXXX, and • XXXX will have access to at least A$xxx million at the time the first loan is to be provided. Therefore, the Syndicated Facility Agreement constitutes a 'syndicated loan facility' as defined in subsection 128F(9) of the ITAA 1936. | Detailed Reasoning - Question 2: Will each of the loans made pursuant to the Syndicated Facility Agreement constitute a 'syndicated loan' for the purpose of the definition of a 'syndicated loan' in subsection 128F(9) of the ITAA 1936? | Summary: Each of the loans made pursuant to the Syndicated Facility Agreement will constitute a 'syndicated loan' as defined in subsection 128F(9) of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: The term 'syndicated loan' is defined in subsection 128F(9) of the ITAA 1936 to mean: "syndicated loan" means a loan or other form of financial accommodation that is provided under a syndicated loan facility, being a facility that has 2 or more lenders. As discussed above, the Syndicated Facility Agreement has two or more lenders and is a 'syndicated loan facility' for the purposes of subsection 128F(9) of the ITAA 1936. Therefore, each of the loans made pursuant to the Syndicated Facility Agreement will constitute a 'syndicated loan' as defined in subsection 128F(9) of the ITAA 1936. | Detailed Reasoning - Question 3: Do the invitations to the Offerees to become lenders under the Syndicated Facility Agreement satisfy the public offer test in subsection 128F(3A) of the ITAA 1936? | Summary: The invitation to become a lender under the Syndicated Facility Agreement will satisfy the public offer test in subsection 128F(3A) of the ITAA 1936. The invitation will not be taken to have never satisfied the public offer test under subsection 128F(5AA) of the ITAA 1936 as no associates of XXXX are participant lenders under the Syndicated Facility Agreement. | Detailed Reasoning - Detailed reasoning: Subsection 128F(3A) of the ITAA 1936 prescribes three alternative public offer tests relevant to a syndicated loan facility, only one of which must be satisfied for a company to meet the public offer test requirement. Subsection 128F(3A) states: An invitation to become a lender under a syndicated loan facility by a company satisfies the public offer test if the invitation was made: (a) to at least 10 persons each of whom: (i) was carrying on a business of providing finance, or investing or dealing in securities, in the course of operating in financial markets; and (ii) was not known, or suspected, by the company to be an associate (see subsection (9)) of any of the other persons covered by this paragraph; or (b) publicly in electronic form, or in another form, that was used by financial markets for dealing in debentures or debt interests; or (c) to a dealer, manager or underwriter, in relation to the placement of debentures or debt interests, who, under an agreement with the company, made the invitation to become a lender under the facility within 30 days in a way covered by paragraph (a) or (b). In subsection 128F(5AA) of the ITAA 1936, it states the conditions where the public offer test is taken never to have been satisfied: An invitation to become a lender under a syndicated loan facility is taken never to have satisfied the public offer test if, at the time the invitation is made, the company knew, or had reasonable grounds to suspect, that: (a) an associate of the company is or will become a lender under the facility; and (b) either: (i) the associate is a non-resident and the associate is not or would not become a lender under the facility in carrying on a business in Australia at or through a permanent establishment of the associate in Australia; or (ii) the associate is a resident of Australia and the associate is or would become a lender under the facility in carrying on a business in a country outside Australia at or through a permanent establishment of the associate in that country; and (c) the associate is not or would not become a lender under the facility in the capacity of: (i) a dealer, manager or underwriter in relation to the invitation; or (ii) a clearing house, custodian, funds manager or responsible entity of a registered scheme. The term 'associate' is defined in subsection 128F(9) of the ITAA 1936 as the meaning given by section 318 of the ITAA 1936, except that paragraphs (1)(b), (2)(a) and (4)(a) of section 318 of the ITAA 1936 must be disregarded. The wording used by subsection 128F(3A) of the ITAA 1936 uses the same wording as subsection 128F(3) of the ITAA 1936. As such, guidance relevant to subsection 128F(3) of the ITAA 1936 is useful in understanding subsection 128F(3A) of the ITAA 1936. Similarly, guidance provided in respect of subsection 128F(5) of the ITAA 1936 is useful in understanding subsection 128F(5AA) of the ITAA 1936. | Detailed Reasoning - Invitation: Taxation Determination TD 1999/24 Income tax: interest withholding tax exemption under section 128F of the Income Tax Assessment Act 1936 - how may a company satisfy the introductory requirements in paragraphs 128F(3)(a) and 128F(3)(b) that a debenture must be offered on a 'debenture by debenture' basis? (TD 1999/24) provides at paragraph 3 that for the purposes of section 128F of ITAA 1936, 'offer' is not limited to the context of a contractual offer but can be an invitation or inducement to potential investors to make offers. It is therefore not necessary to establish whether the public offer is accepted by all offerees, only that the offer was actually made to the requisite number of entities. XXXX written invitation, consisting of the Invitation Letter, was sent separately to the Offerees by ZZZZ Bank as the CMLAB for the Facility. The Invitation Letter invited the Offerees to become a lender and for them to make their offers. This Invitation Letter constitutes an invitation to potential lenders for the purposes of the public offer test. | Detailed Reasoning - Paragraph 128F(3A)(c) of the ITAA 1936: Paragraph 128F(3A)(c) of the ITAA 1936 outlines that an invitation to become a lender under a syndicated loan facility satisfies the public offer test if the invitation was made to a dealer, manager or underwriter, in relation to the placement of debentures or debt interests, who, under an agreement with the company, made the invitation to become a lender under the facility within 30 days in a way covered by paragraph 128F(3A)(a) of the ITAA 1936. Taxation Determination TD 1999/18 Income tax: interest withholding tax exemption under section 128F of the Income Tax Assessment Act 1936 - for the purposes of the fifth public offer test, in paragraph 128F(3)(e), in what circumstances is a debenture taken to be 'offered for issue'? ( TD 1999/18) states at paragraph 2 that the 30 day period specified in paragraph 128F(3)(e) of the ITAA 1936 is taken to commence from the day on which the dealer, manager or underwriter has an unconditional obligation to offer the debentures for sale, under the agreement contemplated in that paragraph. The terms of ZZZZ Bank's engagement as the CMLAB is outlined in the Mandate Letter. Within 30 days of XXXX accepting the Mandate Letter, ZZZZ Bank sent the Invitation Letter to Offerees to participate in the Facility. Therefore, the requirement of paragraph 128F(3A)(c) of the ITAA 1936 to make the invitation to become a lender under the facility within 30 days is satisfied. Relevantly, the requirements of Paragraph 128F(3A)(a) of the ITAA 1936 are considered below. | Detailed Reasoning - Paragraph 128F(3A)(a) of the ITAA 1936: Under paragraph 128F(3A)(a) of the ITAA 1936, the relevant invitation must be made to at least 10 persons carrying on a business of providing finance that are not associates of one another. Paragraph 3 of TD 1999/18 states: 3. In relation to the public offer test in paragraph 128F(3)(a), both the company and the dealer, manager or underwriter have a responsibility for ensuring the debentures are offered for issue to at least 10 eligible persons who are not known or suspected to be associates. As pointed out in the explanatory memorandum to Taxation Laws Amendment Act (No 2) 1997, the company offering the debentures for sale does not need to undertake a detailed examination of the parties to whom the debentures are offered. Therefore, the company may rely on the expectation the dealer, manager or underwriter has complied with the conditions set out in paragraph 128F(3)(a). The company cannot, however, ignore persons it knows to be an associate and use the defence that it relied on the dealer, manager or underwriter. Taxation Determination TD 1999/13 Income tax: interest withholding tax exemption under section 128F of the Income Tax Assessment Act 1936 - for the purposes of the public offer test in paragraph 128F(3)(a) (the 'first public offer test'): (a) are pension funds and other 'qualified institutional buyers' considered to be carrying on the business of providing finance, or investing or dealing in securities? (b) what is required of a company to establish that the persons to whom the debentures are offered are carrying on business in the manner required by the legislation? (c) when is a company taken to know or suspect that such a person is an associate (TD 1999/13) also outlines at paragraph 6 that where a dealer, manager or underwriter offers the debentures on behalf of the company under paragraph 128F(3)(e) of the ITAA 1936, a company may also rely on a representation or undertaking by the dealer, manager or underwriter, that it offered, or it will offer, the debenture for sale in compliance with paragraph 128F(3)(a) of the ITAA 1936. TD 1999/13 further provides at paragraph 6 that in relation to subparagraph 128F(3A)(a)(i) of the ITAA 1936, a company is able to rely on a representation by a person to whom the loan is offered that it is carrying on a business as required by the legislation. At paragraph 8, TD 1999/13 also states with respect to subparagraph 128F(3A)(a)(ii) of the ITAA 1936, that the company must offer the loan to at least 10 persons each of whom was not known, or suspected by the company to be associates of one another. This tests the knowledge or suspicion of the company as to whether any entities to whom it made an offer are associates of one another. Knowledge in this sense requires actual knowledge, and suspicion needs to be looked at objectively. A company is not regarded as knowing or suspecting persons are associates unless it is established that officers of the company knew or had reasonably grounds to suspect otherwise. It is looked at objectively in light of what is reasonable in the individual circumstances of a particular case. TD 1999/13 also states at paragraph 10 that a company offering loans is not required to undertake a detailed examination into the relationships between persons it offers debentures to, however it cannot ignore companies that are generally known to be associates. As the CMLAB, ZZZZ Bank made the invitations on XXXX behalf to greater than 10 Offerees. When determining the Offerees invited to participate in the Facility, the potential lenders were screened through publicly available information to determine the shareholder structure. The list of potential lenders was discussed and cleared with XXXX before ZZZZ Bank as the CMLAB issued the Invitation Letter to the Offerees. Under the Syndicated Facility Agreement, ZZZZ Bank as the CMLAB confirms it has made invitations to become a lender to at least ten parties, each of whom, it believed carried on the business of providing finance or investing or dealing in securities in the course of operating in financial markets. Additionally, XXXX confirms under the Syndicated Facility Agreement that at least 10 of the parties to whom the CMLAB made invitations, were not known or suspected by it to be associates of any of the others of those 10 Offerees. Based on the above, the invitation made by ZZZZ Bank on behalf of XXXX satisfies the first public offer test in paragraph 128F(3A)(a) of the ITAA 1936 on the basis that: • a written invitation was sent to greater than 10 financial institutions inviting them to become lenders under the Syndicated Facility Agreement. • the invitation was made to at least 10 financial institutions which: o were carrying on a business of providing finance, or investing or dealing in securities, in the course of operating in financial markets at the time the invitation was made, and o were not known or suspected by XXXX to be associates of any other invitee at the time of making the invitation. | Detailed Reasoning - Subsection 128F(5AA) of the ITAA 1936: In addition to satisfying subsection 128F(3A) of the ITAA 1936, it is also necessary to consider subsection 128F(5AA) of the ITAA 1936, which specifies the conditions under which an invitation to become a lender under a syndicated loan facility is taken never to have satisfied the public offer test. Relevantly, the invitation is taken never to have satisfied the public offer test if, at the time the invitation is made, the company knew, or had reasonable grounds to suspect, that an associate of the company is or will become a lender under the facility. An exception to this test is if the relevant lender that is known or suspected of being an associate is lending through its Australian permanent establishment. Where this test is failed, the entire invitation fails the public offer test, and withholding tax becomes payable on the interest paid under the loans pursuant to the facility. Taxation Determination TD 2001/3 Income tax: Interest Withholding Tax Exemption - for the purposes of subsection 128F(5) of the Income Tax Assessment Act 1936, when will a company be taken to have the requisite knowledge or suspicion that the debenture or an interest in the debenture was being, or would later be, acquired by an associate (TD 2001/3) provides at paragraph 2 that knowledge in this sense refers to actual knowledge of the company at the time the loan was issued; suspicion is to be assessed objectively in light of what is reasonable in the individual circumstances of the particular case. TD 2001/3 further provides at paragraph 4 that a company will not be taken to have the requisite knowledge or suspicion if the company takes reasonable steps to ensure that its associates do not acquire its debentures. While every case is judged on its merits, reasonable steps may include writing to associates asking them not to acquire debentures, including statements or warranties in the prospectus warning of the risk associated with associates purchasing debentures regarding the public offer test, and instructions to the dealer. Finally, TD 2001/3 notes at paragraph 5 that a company cannot ignore persons it knows or has reasonable grounds to suspect are associates, and then use a defence that it relied on the bona fide representations of the relevant entity, dealer, manager or underwriter. | Detailed Reasoning - Section 318 of the ITAA 1936: Subsection 318(2) of the outlines the associates of a company as follows: 318(2) [ Associates of a company] For the purposes of this Part, the following are associates of a company (in this subsection called the primary entity ): (a) [disregarded in accordance with subsection 128F(9) of the ITAA 1936]; (b) if a partner of the primary entity is a natural person otherwise than in the capacity of trustee - the spouse or a child of that partner; (c) a trustee of a trust where the primary entity, or another entity that is an associate of the primary entity because of another paragraph of this subsection, benefits under the trust; (d) another entity (in this paragraph called the controlling entity ) where: (i) the primary entity is sufficiently influenced by: (A) the controlling entity; or (B) the controlling entity and another entity or entities; or (ii) a majority voting interest in the primary entity is held by: (A) the controlling entity; or (B) the controlling entity and the entities that, if the controlling entity were the primary entity, would be associates of the controlling entity because of subsection (1), because of subparagraph (i) of this paragraph, because of another paragraph of this subsection or because of subsection (3); (e) another company (in this paragraph called the controlled company ) where: (i) the controlled company is sufficiently influenced by: (A) the primary entity; or (B) another entity that is an associate of the primary entity because of another paragraph of this subsection; or (C) a company that is an associate of the primary entity because of another application of this paragraph; or (D) 2 or more entities covered by the preceding sub-subparagraphs; or (ii) a majority voting interest in the controlled company is held by: (A) the primary entity; or (B) the entities that are associates of the primary entity because of subparagraph (i) of this paragraph and the other paragraphs of this subsection; or (C) the primary entity and the entities that are associates of the primary entity because of subparagraph (i) of this paragraph and the other paragraphs of this subsection; (f) any other entity that, if a third entity that is an associate of the primary entity because of paragraph (d) of this subsection were the primary entity, would be an associate of that third entity because of subsection (1), because of another paragraph of this subsection or because of subsection (3). When determining the Offerees invited to participate in the Facility, the potential lenders were screened through publicly available information to determine their shareholder structure. The list of potential lenders was discussed and cleared with XXXX before ZZZZ Bank as the CMLAB issued the Invitation Letter to the Offerees. Pursuant to the Syndicated Facility Agreement, XXXX confirms that none of the Offerees whose names were disclosed to it by ZZZZ Bank as the CMLAB were known or suspected by it to be an offshore associate of XXXX. Moreover, the Syndicated Facility Agreement also outlines that each borrower represents that it is not, so far as it has actual knowledge, an offshore associate of XXXX. Accordingly, subsection 128F(5AA) of the ITAA 1936 does not apply and the invitation to the Offerees does satisfy the public offer test in paragraph 128F(3A)(a) of the ITAA 1936. | Detailed Reasoning - Question 4: Will the invitations to the Offerees to become lenders under the Syndicated Facility Agreement otherwise fail the public offer test in subsection 128F(3A) due to the application of subsection 128F(5AA) of the ITAA 1936? | Detailed Reasoning - Detailed reasoning: The invitation to the Offerees to become a lender under the Syndicated Facility Agreement does not fail the 'public offer test' in subsection 128F(3A) of the ITAA 1936 due to the application of subsection 128F(5AA) of the ITAA 1936. The application of subsection 128F(5AA) of the ITAA 1936 is outlined in Question 3 above. | Detailed Reasoning - Question 5: Will subsection 128F(2) of the ITAA 1936 apply such that interest paid by XXXX on each syndicated loan issued under the Syndicated Facility Agreement is not subject to tax imposed under Division 11A of Part III of the ITAA 1936? | Summary: As the public offer test has been satisfied, subsection 128F(1) of the ITAA 1936 will apply. Interest paid by XXXX on each syndicated loan issued under the Syndicated Facility Agreement will not be subject to tax imposed under Division 11A of Part III of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: Subsection 128F(2) of the ITAA 1936 provides that tax is not payable under Division 11A in respect of interest to which section 128F of the ITAA 1936 applies. Subsection 128F(1) of the ITAA 1936 provides that section 128F of the ITAA 1936 applies to interest paid by a company in respect of a debenture or debt interest in the company if: (a) the company was a resident of Australia when it issued the debenture or debt interest; and (b) the company is a resident of Australia when the interest is paid; and (c) for a debt interest other than a debenture--the debt interest: (i) is a non-equity share; or (ii) consists of 2 or more related schemes (within the meaning of the Income Tax Assessment Act 1997 ) where one or more of them is a non-equity share; or (iii) is a syndicated loan; or (iv) is prescribed by the regulations for the purposes of this section; and (d) either: (i) the issue of the debenture or debt interest satisfies the public offer test set out in subsection (3) or (4); or (ii) for a syndicated loan--the invitation to become a lender under the relevant syndicated loan facility satisfies the public offer test set out in subsection (3A). The interest paid by XXXX under the Syndicated Facility Agreement satisfies the conditions in subsection 128F(1) of the ITAA 1936 on the basis that: • XXXX will be resident of Australia when the debt interest is issued • XXXX will be a resident of Australia when the interest is paid • as discussed above, the Syndicated Facility Agreement constitutes a 'syndicated loan facility' as defined in subsection 128F(9) of the ITAA 1936, such that the loans made pursuant to the Syndicated Facility Agreement will constitute a 'syndicated loan' as defined in subsection 128F(9) of the ITAA 1936, and • the invitation to become a lender under the Syndicated Facility Agreement satisfies the public offer test set out in subsection 128F(3A) of the ITAA 1936. Therefore, subsection 128F(1) of the ITAA 1936 will apply such that, under subsection 128F(2) of the ITAA 1936, interest paid by XXXX on each syndicated loan issued under the Syndicated Facility Agreement will not be subject to tax imposed under Division 11A of Part III of the ITAA 1936. | Detailed Reasoning - Question 6: Will XXXX have no obligation under section 12-300 of Schedule 1 to the TAA to withhold an amount from any interest paid under the Syndicated Facility Agreement by virtue of subsection 12-300(a) of Schedule 1 to the TAA because section 128F of the ITAA 1936 applies to the interest? | Summary: XXXX will not have an obligation to withhold an amount from any interest paid under the Syndicated Facility Agreement under section 12-245 of Schedule 1 to the TAA by virtue of subsection 12-300(a) of Schedule 1 to the TAA. | Detailed Reasoning - Detailed reasoning: Section 12-245 of Schedule 1 to the TAA states an entity must withhold an amount from interest it pays to an entities or entities if the recipient of the interest has an address outside Australia or the payer of the interest is authorised to pay the interest at a place outside Australia. Each of the Lenders that XXXX has chosen to become a lender under the Syndicated Facility Agreement have addresses which are outside Australia. As such section 12-245 of Schedule 1 to the TAA applies. However, section 12-245 of Schedule 1 to the TAA and the amounts required to be withheld are limited by section 12-300 of Schedule 1 to the TAA. Under subsection 12-300(a) of Schedule 1 to the TAA, an entity is not required to withhold an amount from ( inter alia ) interest (within the meaning of Division 11A of Part III of the ITAA 1936) if no withholding tax is payable in respect of the interest. As discussed above, the interest payable by XXXX on each syndicated loan issued under the Syndicated Facility Agreement satisfies the requirements of subsection 128F(1) of the ITAA 1936 such that subsection 128F(2) of the ITAA 1936 applies. As such, withholding tax will not be payable in respect of the interest under subsection 128B(1) of the ITAA 1936. Accordingly, XXXX will not have an obligation to withhold an amount from any interest paid under the Syndicated Facility Agreement in accordance with section 12-245 of Schedule 1 to the TAA as it is limited by subsection 12-300(a) of Schedule 1 to the TAA.

Question 1: Will the Syndicated Facility Agreement constitute a 'syndicated loan facility' for the purposes of the definition of a 'syndicated loan facility' in subsection 128F(9) of the ITAA 1936?