Document ID: chunk:federal_register_of_legislation:C2018A00084:clause:1_1:p22
Version: federal_register_of_legislation:C2018A00084
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 22/35)
Character Range: 55226–58029

*subject to foreign income tax for the purposes of subsection 832‑680(1) in the deducting country mentioned in subsection 832‑320(2); and
 (c) the amount is *subject to foreign income tax for the purposes of subsection 832‑680(1) in the non‑including country identified in subsection 832‑320(3).

832‑335  Adjustment if hybrid payer has dual inclusion income in a later year
 (1) There is an adjustment under this section for an entity in an income year (the adjustment year) if:
 (a) in an earlier income year, all or part of a deduction of the entity in respect of a payment that gave rise to a *hybrid payer mismatch was not allowable under section 832‑285; and
 (b) an amount of *dual inclusion income is:
 (i) available to be applied by the *hybrid payer in the adjustment year; and
 (ii) *subject to Australian income tax for the purposes of subsection 832‑680(1) in the adjustment year; and
 (iii) *subject to foreign income tax for the purposes of subsection 832‑680(1) in the non‑including country identified in subsection 832‑320(3).
 (2) So much of the amount of *dual inclusion income that satisfies paragraph (1)(b) as does not exceed the amount that was not allowable as a deduction is an amount the entity can deduct in the adjustment year.
 (3) For the purposes of a later application of this section, treat the amount that was not allowable as a deduction under section 832‑285 as being reduced by the amount deducted under subsection (2) of this section.

Subdivision 832‑E—Reverse hybrid mismatch

Guide to Subdivision 832‑E

832‑375  What this Subdivision is about

      This Subdivision neutralises a reverse hybrid mismatch if it involves a deduction in Australia.
      A deduction/non‑inclusion mismatch is a reverse hybrid mismatch if it is made directly or indirectly to a reverse hybrid, and the mismatch would not have arisen, or would have been less, if the payment had instead been made directly to an investor in the reverse hybrid.
      An entity is a reverse hybrid if it is transparent for the purposes of the tax law of the country in which it is formed, but non‑transparent for the purposes of the tax law of the country in which investors in it are subject to tax (resulting in non‑inclusion).
      A reverse hybrid mismatch that is not neutralised by this Subdivision (or by foreign hybrid mismatch rules) is an offshore hybrid mismatch, which might give rise to an imported hybrid mismatch under Subdivision 832‑H.

Table of sections

Operative provisions
832‑380 Deduction not allowable—Australian primary response
832‑385 Exception where entity not a party to the structured arrangement
832‑390 When a reverse hybrid mismatch is an offshore hybrid mismatch
832‑395 When a payment gives rise to a reverse hybrid mismatch
832‑400 Hybrid mismatch
832‑405 Hybrid