Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p19
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 19/38)
Character Range: 7426045–7428779

apart from this section, the entity would be entitled to a deduction in an income year in respect of a payment; and
 (b) the deduction is the *deduction component of a *hybrid payer mismatch to which the payment gives rise.
 (2) So much of the deduction as does not exceed the *neutralising amount for the *hybrid payer mismatch is not allowable as a deduction.
Note: The neutralising amount is worked out under section 832‑330.

832‑290  Inclusion in assessable income—Australian secondary response
 (1) This section applies to an entity if:
 (a) the entity is the recipient of a payment that gives rise to a *hybrid payer mismatch; and
 (b) the *deduction component of the mismatch is a *foreign income tax deduction; and
 (c) the secondary response is required (see subsection (2)).

When secondary response is required
 (2) For the purposes of paragraph (1)(c), the secondary response is required unless, in the country in which the *foreign income tax deduction arose, the mismatch is covered by *foreign hybrid mismatch rules that correspond to this Subdivision, or by a law that has substantially the same effect as foreign hybrid mismatch rules that correspond to this Subdivision.

Inclusion of amount in assessable income
 (3) An amount equal to the *neutralising amount for the *hybrid payer mismatch is included in the entity's assessable income for the income year mentioned in subsection (4). The assessable income is taken to have been derived from the same source as the payment.
 (4) The income year (the inclusion year) is:
 (a) if the *foreign tax period in which the *foreign income tax deduction arises falls wholly within an income year of the entity—that income year; or
 (b) if the foreign tax period in which the foreign income tax deduction arises straddles 2 income years of the entity—the earlier of those income years.

832‑295  Exception where entity not a party to the structured arrangement
  Sections 832‑285 and 832‑290 do not apply to an entity in respect of a payment if:
 (a) the payment is made under a *structured arrangement to which the entity is not a *party; and
 (b) subsection 832‑305(3) does not apply.

832‑300  When a hybrid payer mismatch is an offshore hybrid mismatch
 (1) A *hybrid payer mismatch is an offshore hybrid mismatch if:
 (a) the *deduction component of the mismatch is a *foreign income tax deduction; and
 (b) no amount becomes *subject to Australian income tax as a result of the application of section 832‑290 in relation to the mismatch; and
 (c) the mismatch is not covered by *foreign hybrid mismatch rules that correspond to this Subdivision, or by a law that has substantially the same effect as foreign hybrid mismatch rules that correspond to this Subdivision.