Private ruling: Proposed on-market share buy-back
Date of advice: 25 October 2017
Published: March 2018

Ruling: Q1: Will the proposed on-market share buy-back of ordinary shares in Entity A by Entity A (Proposed Buy-back) be an ‘on-market buy-back’ for the purposes of Division 16K of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: Yes. | Q2: Will any part of the consideration paid by Entity A to buy back its ordinary shares (Buy-back Price) be regarded as a dividend under subsection 6(1) of the ITAA 1936? | A2: No. | Q3: Will a franking debit be included in Entity A’s franking account under item 9 of the table in subsection 205-30(1) of the Income Tax Assessment Act 1997 (ITAA 1997) as a result of the Proposed Buy-back? | A3: No. | Q4: Will Entity A’s share capital accounts be tainted under Division 197 of the ITAA 1997 as a result of the Proposed Buy-back? | A4: No. | Q5: Will the Commissioner make a determination under subsection 45C(3) of the ITAA 1936 in relation to the Proposed Buy-back? | A5: No.

Relevant facts and circumstances: Entity A applied for a private binding ruling in respect to a proposed on-market share buy-back.



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