Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p29
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 29/38)
Character Range: 7450894–7453696

hybrid mismatch
832‑475 Hybrid mismatch
832‑480 Hybrid requirement—payment made directly or indirectly to a branch hybrid
832‑485 Branch hybrid

Operative provisions

832‑455  Deduction not allowable
 (1) This section applies to an entity if:
 (a) apart from this section, the entity 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 *branch hybrid mismatch to which the payment gives rise.
 (2) So much of the deduction as does not exceed the amount of the *branch hybrid mismatch is not allowable as a deduction.
 (3) However, this section does not apply in relation to the *branch hybrid mismatch if subsection 23AH(2) of the Income Tax Assessment Act 1936 does not apply in relation to the payment because of subsection (4A) of that section.

832‑460  Exception where entity not a party to the structured arrangement
  Section 832‑455 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 832‑470(3) does not apply.

832‑465  When a branch hybrid mismatch is an offshore hybrid mismatch
 (1) A *branch 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; and
 (c) subsection 23AH(4A) of the Income Tax Assessment Act 1936 does not apply in relation to the branch hybrid mismatch.
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 *branch hybrid mismatch.

832‑470  Branch hybrid mismatch
 (1) A payment gives rise to a branch hybrid mismatch if:
 (a) the payment gives rise to a *hybrid mismatch under section 832‑475; and
 (b) subsection (3) or (4) applies.
 (2) The deduction component of the *branch hybrid mismatch is the *deduction component of the *deduction/non‑inclusion mismatch mentioned in section 832‑475.

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 *branch 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.

832‑475  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 mismatch, or a part of the mismatch,