Document ID: chunk:federal_register_of_legislation:C2018A00084:clause:1_1:p18
Version: federal_register_of_legislation:C2018A00084
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 18/35)
Character Range: 45488–48295

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.

832‑310  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 payment meets the hybrid requirement in section 832‑315.

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 832‑315(2)(b)(i) or 832‑315(3)(b)(i)—the amount of the excess.

Ordering rule
 (3) However, a payment does not give rise to a hybrid mismatch under this section if it gives rise to a *hybrid financial instrument mismatch.

832‑315  Hybrid requirement—assume payment was made to same recipient but by an ungrouped payer
 (1) The payment meets the hybrid requirement in this section if:
 (a) the payment is made by a *hybrid payer; and
 (b) subsection (2) or (3) applies.

Payment would have been taxed in Australia
 (2) This subsection applies if:
 (a) the non‑including country identified in subsection 832‑320(3) 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.

Payment would have been taxed in a foreign country
 (3) This subsection applies if:
 (a) the non‑including country identified in subsection 832‑320(3) 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.

Assumption—payer was an ungrouped entity
 (4) For the purposes of subsections (2) and (3), assume that the payment had instead been made:
 (a) to the same recipient; but
 (b) by an entity that was a *liable entity in the non‑including country identified in subsection 832‑320(3) only in respect of its own income or profits.
Note: For the meaning of liable entity, see section 832‑325.

832‑320  Hybrid payer
 (1) An entity (the test entity) is a hybrid payer in relation to a payment it makes if:
 (a) subsection (2) applies to the entity in relation to