Private ruling: Sovereign immunity
Date of advice: 20 May 2026
Published: 3 August 2026
Ruling period: 1 July 20XX to 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the ordinary and statutory income derived by ForeignCo from its interests in the Test Entities not assessable and not exempt income under section 880-105 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. | Q2: Is any capital gain or capital loss derived by ForeignCo from its interests in the Test Entities disregarded under section 880-115 and section 880-120 of the ITAA 1997 respectively? | A2: Yes.

Relevant facts and circumstances: ForeignCo 1. ForeignCo is a statutory corporation created under the laws of Country X and operates as the central bank of Country X. Management and Control of ForeignCo 2. The Board of Directors (the Board) of ForeignCo are appointed by the government of Country X (the Government). 3. The Board is: • responsible for the policy and general administration of the affairs and business of the central bank • required to inform the Government of the regulatory, supervisory and monetary policies of the central bank • ultimately accountable to the Government. Functions of ForeignCo 4. The principal objects of ForeignCo are to: • act as the central bank of Country X, conduct monetary policy, issue currency, oversee payment systems and serve as banker to and financial agent of the Government • maintain price stability conducive to sustainable growth of the economy • foster a sound and reputable financial centre and to promote financial stability • conduct supervision of the financial services sector • manage the official foreign reserves of Country X. Funds of ForeignCo 5. The capital of ForeignCo is wholly owned by the Government. 6. At the end of each financial year, part of ForeignCo's net profit is paid to the Government and the remainder is credited to a general reserve. ForiegnCo's Australian Investments 7. ForeignCo holds investments in Australian entities and it is anticipated that it will hold additional investments in Australian entities in the future. The investments which are covered by this Ruling are investments in entities (the Test Entities) which have the following characteristics: • ForeignCo's investments in the Test Entities are membership interests, debt interests or non-share equity interests • the Test Entities are either Australian tax resident companies, or Managed Investment Trusts (MITs) • the Test Entities pay distributions to ForeignCo in the form of dividends, fund payments, interest payments, or otherwise amounts indirectly derived from MITs • ForeignCo and all members of its sovereign entity group, collectively hold less than 10% of the total interests on issue of each of the Test Entities in the circumstances detailed in paragraph 880-105(4)(b) of the ITAA 1997 • neither ForeignCo, nor any members of its sovereign entity group, has involvement in the day to day management of the business of any of the Test Entities • neither ForeignCo, nor any members of its sovereign entity group, has the right to appoint a director to the board of any of the Test Entities (or the board of the trustee where the Test Entity is a MIT) • neither ForeignCo, nor any members of its sovereign entity group holds the right to representation on any investor representative or advisory committee (or similar) of the Test Entities • neither ForeignCo, nor any members of its sovereign entity group has the ability to direct or influence the operation of the Test Entities outside of the ordinary rights conferred by the equity interest held, • ForeignCo's interests in the Test Entities, including ForeignCo's interests when combined with the other interests held within its sovereign entity group, do not provide an entitlement to either directly or indirectly determine the identity of any person who make decisions that comprise the control and direction of the Test Entities' operations • no person involved in the control and direction of the Test Entities' operations is accustomed or obliged to act in accordance with the directions, instructions or wishes of ForeignCo, or members of ForeignCo's sovereign entity group.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 880-105 | Income Tax Assessment Act 1997 section 880-115 | Income Tax Assessment Act 1997 section 880-120