Private ruling: Application of Division 974 of the Income Tax Assessment Act& 1997 and Division 11A of Part III of the Income Tax Assessment Act 1936
Date of advice: 5 October 2020
Published: January 2021
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Convertible Notes be debt interests for the purposes of Division 974 of the ITAA 1997? | A1: Yes | Q2: Will the coupon payments and amounts in respect of default interest arising under the Convertible Notes constitute 'interest' and be subject to interest withholding tax pursuant to Division 11A of Part III of the ITAA 1936? | A2: Yes | Q3: Will other specified payments arising under the Convertible Notes constitute 'interest' for the purposes of Division 11A of Part III of the ITAA 1936? | A3: No

Relevant facts and circumstances: The taxpayer applied for a private ruling on the application of Division 974 of the ITAA 1997 and Division 11A of Part III of the ITAA 1936 to an arrangement in which the Convertible Notes were issued by the issuing company to the Noteholders.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 974-15(1) | Income Tax Assessment Act 1997 Subsection 974-15(2) | Income Tax Assessment Act 1997 Subsection 974-20(1) | Income Tax Assessment Act 1936 Section 128B | Income Tax Assessment Act 1936 Subsection 128A(1AB)