Taxation Determination TD 1999/17







1. The explanatory memorandum accompanying the Taxation Laws Amendment Act (No 2) 1997, which inserted the provision, clearly sets out that a resident company may raise finance through a non-resident borrowing subsidiary. It provides that the following conditions must be satisfied: | 2. If the non-resident subsidiary meets the requirements of section 128F, the parent company is treated as having raised finance and is eligible for the exemption from interest withholding tax. | 3. The subsidiary may enter into such enhancements and arrangements if the subsidiary's only business is to raise funds and/or lend, or otherwise pass, the net proceeds (after the deduction of relevant expenses incurred by the subsidiary in respect of the issue) to its parent. Similarly, a subsidiary may raise finance in one currency and swap the proceeds into another currency prior to lending, or passing on, such proceeds to the parent company without jeopardising the sole business test in paragraph 128F(8)(b). | Commissioner of Taxation 12 May 1999 | Previously released in draft form as TD 1999/D10


Related rulings: TD 1999/8 TD 1999/9 TD 1999/10 TD 1999/11 TD 1999/12 TD 1999/13 TD 1999/14 TD 1999/15 TD 1999/16 TD 1999/18 TD 1999/19 TD 1999/20 TD 1999/21 TD 1999/22 TD 1999/23 TD 1999/24 TD 1999/25 TD 1999/26
Legislative references: 128F 128F(8)(b) 128F(8)(d) 128F(9) TLAA (No 2) 1997