Private ruling: eligibility for the special purpose entity exemption in section 820-39 of the Income Tax Assessment Act 1997
Published: February 2014

Ruling: In order to protect the privacy and commercial in-confidence components of this private ruling the following summary is provided. | The ruling concerned the following: | Does the entity meet the conditions in subsection 820-39(3) of the Income Tax Assessment Act 1997 (ITAA 1997)? | The Commissioner has ruled that: | The entity is established for the purposes of managing some or all the economic risks associated with assets either assumed or created by it. | The entity entered into a financing arrangement that is a scheme that gives rise to debt interests for Australian income tax purposes. The value of debt interests arising under that arrangement is at least 50% of the value of the entity's assets. | On consideration of the facts, including a consideration of legal issues, the Commissioner is satisfied that the entity is an insolvency-remote special purpose entity according to the criteria of an internationally recognised rating agency that are applicable to the entity's circumstances. | Accordingly, the entity will satisfy the conditions in subsection 820-39(3) of the ITAA 1997.