Document ID: chunk:federal_register_of_legislation:C2017A00027:clause:1_177j:p2
Version: federal_register_of_legislation:C2017A00027
Segment Type: clause
Provision Reference: sch 1 cl 177J (pt 2/3)
Character Range: 9245–11939

of that Act); and
 (g) it is reasonable to conclude that none of the following sections apply in relation to the relevant taxpayer, in relation to the DPT tax benefit:
 (i) section 177K ($25 million income test);
 (ii) section 177L (sufficient foreign tax test);
 (iii) section 177M (sufficient economic substance test).

Have regard to certain matters
 (2) For the purposes of paragraph (1)(b), have regard to the following matters:
 (a) the matters in subsection 177D(2);
 (b) without limiting subsection 177D(2), the extent to which non‑tax financial benefits that are quantifiable have resulted, will result, or may reasonably be expected to result, from the scheme;
 (c) the result, in relation to the operation of any foreign law relating to taxation, that (but for this Part) would be achieved by the scheme;
 (d) the amount of the tax benefit mentioned in paragraph (1)(b).

Deferral of foreign tax liabilities
 (3) For the purposes of paragraph (1)(b), a deferral of a taxpayer's liabilities to tax under a foreign law is taken to be a reduction of those liabilities, unless there are reasonable commercial grounds for the deferral.

Modification where thin capitalisation provisions apply
 (4) Subsection (5) applies if:
 (a) Division 820 of the Income Tax Assessment Act 1997 (about thin capitalisation) applies to the relevant taxpayer for the year of income mentioned in paragraph (1)(a); and
 (b) the DPT tax benefit includes all or part of a debt deduction (within the meaning of that Act); and
 (c) the calculation of the amount of the DPT tax benefit involves applying a rate to a debt interest (within the meaning of that Act).
 (5) For the purposes of the DPT provisions, in calculating the amount of the DPT tax benefit, apply the rate to the debt interest the entity actually issued (rather than the debt interest that would have existed if the scheme had not been entered into or carried out).

Modification where foreign entity is CFC
 (6) Subsection (6A) applies if:
 (a) the foreign entity mentioned in paragraph (1)(d) is a CFC (within the meaning of Part X); and
 (b) an amount of attributable income (within the meaning of that Part) of the foreign entity has been included as a result of the operation of that Part in the assessable income of:
 (i) the relevant taxpayer; or
 (ii) an associate (within the meaning given by section 318) of the relevant taxpayer, if the associate is a Part X Australian resident (within the meaning of that Part) and is not a trust or partnership.
 (6A) For the purposes of the DPT provisions, reduce the DPT tax benefit to the extent to which the amount included in assessable income as mentioned in paragraph (6)(b):
 (a) would not