Document ID: chunk:federal_register_of_legislation:C2025C00029:section:9:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 9 (pt 1/19)
Character Range: 7030409–7033344

9                Subdivision 820‑L           special record keeping requirements for the purposes of this Division.

Subdivision 820‑A—Preliminary

Table of sections
820‑30 Object of Division
820‑31 Order of application of Subdivisions
820‑32 Exemption for private or domestic assets and non‑debt liabilities
820‑35 Application—$2 million threshold
820‑37 Application—assets threshold
820‑39 Exemption of certain special purpose entities
820‑40 Meaning of debt deduction

820‑30  Object of Division
  The Object of this Division is to ensure that the following entities do not reduce their tax liabilities by using an excessive amount of *debt deductions, in financing their Australian operations:
 (a) *Australian entities that operate internationally;
 (b) Australian entities that are foreign controlled;
 (c) *foreign entities that operate in Australia.
Note: This Division applies in relation to debt deductions of an entity as reduced, if required, in accordance with Division 815 (about cross‑border transfer pricing).

820‑31  Order of application of Subdivisions
 (1) First, work out if a *debt deduction of an entity for an income year is disallowed under Subdivision 820‑EAA (debt deduction limitation rules for debt deduction creation).
 (2) To the extent that all or part of a debt deduction is disallowed under that Subdivision, disregard the debt deduction in applying the following provisions in relation to the entity for the income year:
 (a) Subdivision 820‑AA;
 (b) Subdivision 820‑B;
 (c) Subdivision 820‑C.
Note: The provisions mentioned in paragraphs (2)(a) to (c) may further disallow debt deductions of the entity.

820‑32  Exemption for private or domestic assets and non‑debt liabilities
 (1) This Division does not apply to:
 (a) an asset that is used (or held for use) wholly or principally for private or domestic purposes; or
 (b) a *non‑debt liability that is wholly or principally of a private or domestic nature.
 (2) Subsection (1) does not apply in relation to the following:
 (a) Subdivision 820‑EAA;
 (b) any other provision in this Division, to the extent that it relates to that Subdivision.

820‑35  Application—$2 million threshold
  Subdivision 820‑AA, 820‑B, 820‑C, 820‑D, 820‑E or 820‑EAA does not apply to disallow any *debt deduction of an entity for an income year if the total debt deductions of that entity and all its *associate entities for that year are $2 million or less.

820‑37  Application—assets threshold
 (1) Subdivision 820‑AA, 820‑B, 820‑C, 820‑D or 820‑E does not apply to disallow any *debt deduction of an entity for an income year if:
 (a) either:
 (i) the entity is an *outward investing financial entity (non‑ADI) or an *outward investing entity (ADI) for a period that is all or any part of that year (and is not a *general class investor for that year); or
 (ii) assuming that the entity were a *financial entity for all of that year, it would be, for all of that