Document ID: chunk:federal_register_of_legislation:C2019C00215:clause:7_1:p2
Version: federal_register_of_legislation:C2019C00215
Segment Type: clause
Provision Reference: sch 7 cl 1 (pt 2/10)
Character Range: 84494–87142

met in relation to the year:
 (a) what would otherwise be the entity's assessable income for the year is *non‑assessable non‑exempt income of the entity, to the extent that it is attributable to a return or gain:
 (i) from the arrangement (if the arrangement is a *derivative financial arrangement); or
 (ii) from the entity disposing of, ceasing to own or otherwise realising the arrangement;
 (b) an amount is not deductible by the entity for the year, to the extent that it is attributable to an outgoing or loss:
 (i) from the arrangement (if the arrangement is a derivative financial arrangement); or
 (ii) from the entity disposing of, ceasing to own or otherwise realising the arrangement;
 (c) disregard a *capital gain or *capital loss that is from a *CGT event that happens in the year in relation to the arrangement.

Further concessions relating to permanent establishments
 (2) Without limiting subsection (1), the following further consequences apply to an *IMR entity for an income year if the requirements of subsection (5) are met in relation to the year:
 (a) income that relates to or arises under the *IMR financial arrangement, and that would otherwise be the entity's assessable income for the year, is *non‑assessable non‑exempt income of the entity, to the extent that the income:
 (i) if the entity is resident in a country that has entered into an *international tax agreement with Australia containing a *business profits article—is treated as having a source in Australia because it is attributable to a permanent establishment (within the meaning of the relevant international tax agreement) of the entity in Australia; or
 (ii) if subparagraph (i) does not apply—is treated as having a source in Australia because of subsection 815‑230(1);
 (b) an amount is not deductible by the entity for the year, to the extent that it is attributable to gaining income that is non‑assessable non‑exempt income of the entity because of paragraph (a);
 (c) disregard a *capital gain or *capital loss that is from a *CGT event that relates to or arises under the IMR financial arrangement, and that happens in the year in relation to a *CGT asset that:
 (i) is covered by item 3 of the table in section 855‑15 in relation to the entity; or
 (ii) is covered by item 4 of the table in section 855‑15 in relation to the entity because it is an option or right to *acquire a CGT asset covered by item 3 of that table in relation to the entity.

Direct investment by IMR widely held entity
 (3) The requirements of this subsection in relation to the year are that:
 (a) during the whole of the year, the *IMR entity is an *IMR widely held