Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p22
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 22/66)
Character Range: 6380843–6384483

one or more entities each of which is:
 (i) another tier‑1 company of the top company; or
 (ii) an entity that is a wholly‑owned subsidiary of another tier‑1 company of the top company;
 (c) at least one of the following entities must hold a membership interest in the interposed entity:
 (i) another tier‑1 company of the top company;
 (ii) a wholly‑owned subsidiary of another tier‑1 company of the top company;
 (iii) an entity that holds membership interests only as a nominee of one or more entities each of which is mentioned in subparagraph (i) or (ii).
 (4) For the purposes of subparagraphs (3)(a)(iv) and (vii) and paragraphs (3)(b) and (c), in determining whether an entity is a wholly‑owned subsidiary of another *tier‑1 company of the *top company, assume that all of the *membership interests that are beneficially owned by tier‑1 companies of the top company were owned by a single tier‑1 company of the top company.

719‑20  What is a top company and a tier‑1 company?
 (1) At a particular time, a company is:
 (a) a top company if the requirements in item 1 of the table are met; or
 (b) a tier‑1 company of the top company if the requirements in item 2 of the table are met.

Top companies and tier‑1 companies
Column 1                            Column 2                                                                                                                                         Column 3                                                                          Column 4
Kind of entity                      Income tax treatment requirements                                                                                                                Residence requirements                                                            Ownership requirements
 1 Top company                      No specific requirements                                                                                                                         The company must be a foreign resident                                            The company must not be a *wholly‑owned subsidiary of another company (other than a company that is a *prescribed dual resident, or a company that is an Australian resident that fails to meet a condition in column 2 of item 2)
 2 Tier‑1 company                   The company must have all or some of its taxable income (if any) taxed at a rate that is or equals the *corporate tax rate apart from this Part  The company must be an Australian resident (but not a *prescribed dual resident)  The company:
                                    The company must not be covered by an item in the table in section 703‑20                                                                                                                                                          (a) must be a *wholly‑owned subsidiary of the *top company; and
                                                                                                                                                                                                                                                                       (b) must not be a wholly‑owned subsidiary of a company that is an Australian resident (other than a company that fails to meet a condition in column 2 or 3)

 (2) For the purposes of paragraph (b) of column 4 of item 2 of the table, in determining whether a company (the test company) is a *tier‑1 company, if 2 or more other companies beneficially own all of the *membership interests in the test company, and each of those other companies:
 (a) is a *wholly‑owned subsidiary of the *top company;