Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 2/7)
Character Range: 7135345–7138138

MEC group may be an outward investing entity (ADI) to which this Subdivision applies: see Subdivisions 820‑FA and 820‑FB.

Outward investing entity (ADI)
 (2) The entity is an outward investing entity (ADI) for a period that is all or a part of an income year if, and only if, throughout that period, the entity is an *ADI to which at least one of the following paragraphs applies:
 (a) the entity is an *Australian controller of at least one *Australian controlled foreign entity (not necessarily the same Australian controlled foreign entity throughout that period);
 (b) the entity is an *Australian entity that carries on a *business at or through at least one *overseas permanent establishment (not necessarily the same permanent establishment throughout that period);
 (c) the entity is:
 (i) an Australian entity; and
 (ii) an *associate entity of another entity (a related investor) to which subsection (2AA) applies or an *outward investing entity (ADI) for that period.
Note: To determine whether an entity is an Australian controller of an Australian controlled foreign entity, see Subdivision 820‑H.
 (2AA) This subsection applies to a related investor for a period if at all times during the period:
 (a) it is an *outward investing financial entity (non‑ADI); or
 (b) it is an *outward investing entity (ADI); or
 (c) both:
 (i) it is a *general class investor; and
 (ii) assuming that it were a *financial entity, it would be an outward investing financial entity (non‑ADI).
 (2A) However, the entity is not an outward investing entity (ADI) for a period that is all or a part of an income year if it is a *general class investor for that year.
 (2B) Subsection (2A) does not apply for the purposes of subsection 820‑46(2) (definition of general class investor).

Adjusted average equity capital
 (3) The entity's adjusted average equity capital for an income year is:
 (a) the average value, for that year, of all the *ADI equity capital of the entity (other than ADI equity capital attributable to its *overseas permanent establishments); minus
 (b) the average value, for that year, of all the *controlled foreign entity equity of the entity (other than controlled foreign entity equity attributable to its overseas permanent establishments).
Note: To calculate an average value for the purposes of this Division, see Subdivision 820‑G.
 (4) For the purposes of paragraph (3)(a), treat treasury shares (within the meaning of *accounting standard AASB 132) in the entity as included in the *ADI equity capital of the entity, to the extent that those shares are part of the entity's eligible tier 1 capital (within the meaning of the *prudential standards).

820‑305  Minimum capital amount
  The entity's minimum capital amount for an income year is the least of the following