Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p26
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 26/38)
Character Range: 7443316–7446130

would be entitled to a deduction in an income year in respect of a payment; and
 (b) the deduction is the *deduction component of a *reverse hybrid mismatch to which the payment gives rise.
 (2) So much of the deduction as does not exceed the amount of the *reverse hybrid mismatch is not allowable as a deduction.

832‑385  Exception where entity not a party to the structured arrangement
  Section 832‑380 does not apply to an entity in respect of a payment if:
 (a) the payment is made under a *structured arrangement to which the entity is not a *party; and
 (b) subsection 832‑395(3) does not apply.

832‑390  When a reverse hybrid mismatch is an offshore hybrid mismatch
 (1) A *reverse hybrid mismatch is an offshore hybrid mismatch if:
 (a) the *deduction component of the mismatch is a *foreign income tax deduction; and
 (b) the country in which the foreign income tax deduction arose does not have *foreign hybrid mismatch rules that correspond to this Subdivision.
Note: An offshore hybrid mismatch might give rise to an imported hybrid mismatch: see Subdivision 832‑H.
 (2) The amount of the *offshore hybrid mismatch is the amount of the *reverse hybrid mismatch.

832‑395  When a payment gives rise to a reverse hybrid mismatch
 (1) A payment gives rise to a reverse hybrid mismatch if:
 (a) the payment gives rise to a *hybrid mismatch under section 832‑400; and
 (b) subsection (3) or (4) applies.
 (2) The deduction component of the *reverse hybrid mismatch is the *deduction component of the *deduction/non‑inclusion mismatch mentioned in section 832‑400.

Control group
 (3) This subsection applies if the following entities are in the same *Division 832 control group:
 (a) the entity that made the payment;
 (b) the *reverse hybrid;
 (c) each entity that is an investor identified in paragraph 832‑410(2)(c) in relation to the reverse hybrid.
Note: For the meaning of Division 832 control group, see section 832‑205.

Structured arrangement
 (4) This subsection applies if the payment is made under a *structured arrangement.
Note: For the meaning of structured arrangement, see section 832‑210.

832‑400  Hybrid mismatch
 (1) A payment gives rise to a hybrid mismatch if:
 (a) the payment gives rise to a *deduction/non‑inclusion mismatch; and
 (b) the payment meets the hybrid requirement in section 832‑405.

Amount of the hybrid mismatch
 (2) The amount of the *hybrid mismatch is the lesser of:
 (a) the amount of the *deduction/non‑inclusion mismatch; and
 (b) if there is an excess under either subparagraph 832‑405(2)(b)(i) or (3)(b)(i)—the amount of the excess.

Ordering rule
 (3) A payment does not give rise to a hybrid mismatch under this section if it gives rise to a *hybrid financial instrument mismatch or a *hybrid payer mismatch.

832‑405  Hybrid requirement—assume payment