Private ruling: Deductibility of expenses
Date of advice: 17 March 2017
Published: May 2017
Ruling period: Year ended 30 June 201X | Year ended 30 June 201X | Year ending 30 June 201X
Date scheme commenced: 1 June 201X

Ruling: Q1: Are all payments made by AusCo to ForeignCo under the Facility Agreement characterized as interest or in the nature of interest for Australian income tax purposes? | A1: No, only the amounts payable under Clause 9 of the Facility Agreement are interest within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ( ITAA 1936 ). | Q2: Will all the payments made by AusCo be subject to interest withholding tax of 10% pursuant to Section 128B of the ITAA 1936? | A2: No | Q3: Are the payments made by AusCo under the Facility Agreement deductible to AusCo pursuant to Division 230 of the Income Tax Assessment Act 1997 ( ITAA 1997 )? | A3: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1936 ( ITAA 1936) subsection 6(1) ITAA 1936 section 51AAA | ITAA 1936 Division 7A of Part III | ITAA 1936 Division 11A of Part III | ITAA 1936 subsection 128A(1AB) | ITAA 1936 subsection 128A(1AC) | ITAA 1936 subsection 128A(1AD) | ITAA 1936 section 128B | ITAA 1936 subsection 128B(2) | ITAA 1936 subparagraph 128B(3)(a)(ii) | ITAA 1936 subparagraph 128B(3)(h)(ii) | ITAA 1936 subsection 128B(5) | Taxation Administration Act 1953 (TAA 1953) section 11-5 of Schedule 1 TAA 1953 Division 12 of Schedule 1 | TAA 1953 section 12-10 of Schedule 1 | TAA 1953 section 12-245 of Schedule 1 | TAA 1953 paragraph 12-300(a) of Schedule 1 | TAA 1953 Division 14 of Schedule 1 | TAA 1953 section 14-5 of Schedule 1 | TAA 1953 subsection 16-70(1) of Schedule 1 | Income Tax Assessment Act 1997 (ITAA 1997 ) section 8-1 ITAA 1997 section 26-25 | ITAA 1997 Division 230 | ITAA 1997 subsection 230-15(2) | ITAA 1997 section 230-45 | ITAA 1997 subsection 230-45(1) | ITAA 1997 subsection 230-45(2) | ITAA 1997 paragraph 230-45(2)(g) | ITAA 1997 subsection 230-45(3) | ITAA 1997 subsection 230-45(4) | ITAA 1997 subsection 230-45(5) | ITAA 1997 section 230-50 | ITAA 1997 section 230-55 | ITAA 1997 subsection 230-55(4) | ITAA 1997 Subdivision 230-B | ITAA 1997 section 230-100 | ITAA 1997 subsection 230-100(2) | ITAA 1997 subsection 230-100(3) | ITAA 1997 subsection 230-100(4) | ITAA 1997 subsection 230-100(5) | ITAA 1997 subsection 230-105(1) | ITAA 1997 subsection 230-105(2) | ITAA 1997 section 230-115 | ITAA 1997 section 230-180 | ITAA 1997 section 230-455 | ITAA 1997 subsection 974-160(1) | ITAA 1997 subsection 995-1(1). | Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of X for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income [1969] ATS 14 | Protocol amending the Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of X for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income [1990] ATS 3