Document ID: chunk:federal_register_of_legislation:C2018A00084:clause:1_1:p27
Version: federal_register_of_legislation:C2018A00084
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 27/35)
Character Range: 67922–70759

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, meets the hybrid requirement in section 832‑480.

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 832‑480(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, a *hybrid payer mismatch or a *reverse hybrid mismatch.

832‑480  Hybrid requirement—payment made directly or indirectly to a branch hybrid
 (1) The payment meets the hybrid requirement in this section if:
 (a) the payment is made directly, or indirectly through one or more interposed entities, to a *branch hybrid; and
 (b) subsection (2) or (3) applies.

Payment would have been taxed in Australia
 (2) This subsection applies if:
 (a) the residence country identified in subsection 832‑485(2) is Australia; and
 (b) either:
 (i) the amount of the *deduction/non‑inclusion mismatch exceeds the amount that would be the amount of that mismatch if the amount of the payment that was *subject to Australian income tax for an income year was instead worked out on the assumption in subsection (4); or
 (ii) on the assumption in subsection (4), the payment would have given rise to a *hybrid financial instrument mismatch or a *hybrid payer mismatch.

Payment would have been taxed in a foreign country
 (3) This subsection applies if:
 (a) the residence country identified in subsection 832‑485(2) is a foreign country; and
 (b) either:
 (i) the amount of the *deduction/non‑inclusion mismatch exceeds the amount that would be the amount of that mismatch if the amount of the payment that was *subject to foreign income tax for a *foreign tax period was instead worked out on the assumption in subsection (4); or
 (ii) on the assumption in subsection (4), the payment would have given rise to a *hybrid financial instrument mismatch or a *hybrid payer mismatch.

Assumption—residence country treated payment as non‑branch income
 (4) For the purposes of subsections (2) and (3), assume that the payment was instead treated as income derived by