Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 4/18)
Character Range: 7483920–7486564

832‑680  Dual inclusion income, and when an entity is eligible to apply it
 (1) An amount of income or profits is dual inclusion income if 2 or more of the following outcomes arise for the amount:
 (a) it is *subject to Australian income tax in an income year;
 (b) it is *subject to foreign income tax in a foreign country in a *foreign tax period;
 (c) it is subject to foreign income tax in a foreign country (other than the country mentioned in paragraph (b)) in a foreign tax period.
Note: In certain circumstances, dual inclusion income can be applied to reduce the neutralising amount for a hybrid payer mismatch (see section 832‑330) or a deducting hybrid mismatch (see section 832‑560).
 (1A) In determining for the purposes of subsection (1) whether an amount of income or profits is *subject to Australian income tax, disregard subsection 832‑125(2) (which is about when an amount included in the assessable income of a trust or partnership is subject to Australian income tax), so far as it applies in relation to assessable income from a foreign source.

Effect of Australian foreign income tax offset for underlying taxes
 (2) For the purposes of subsection (1), if:
 (a) an amount of assessable income of a *corporate tax entity (the assessable amount) would, apart from this subsection and subsection (1A), be *subject to Australian income tax; and
 (b) an amount of *foreign income tax (except a tax covered by subsection 832‑130(7)) paid in respect of the assessable amount counts towards a *tax offset for an entity under Division 770;
then:
 (c) if the amount of the tax offset equals or exceeds the amount of *tax that would, having regard only to the assessable amount and the rate at which tax is imposed on the entity, be payable on the assessable amount—the assessable amount is treated as if it were not subject to Australian income tax; and
 (d) if the amount of the tax offset is a proportion of the amount of that tax—then that proportion of the assessable amount is treated as if it were not subject to Australian income tax.

Effect of credits etc. for underlying taxes
 (3) In determining for the purposes of subsection (1) whether an amount of income or profits is *subject to foreign income tax in a *foreign tax period, disregard subsection 832‑130(3).

Extension for certain on‑payments through grouped entities
 (4) Subsection (5) applies, if:
 (a) an entity is a member of a dual inclusion income group in a country (see subsection (6)); and
 (b) an amount of income or profits of the entity (the on‑payment amount) is a payment received by the entity from another member of the dual inclusion income group