Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:6_2:p2
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 6 cl 2 (pt 2/5)
Character Range: 39277–41898

assessable income of the *head company of the group for that income year included foreign income (within the meaning of the Income Tax Assessment Act 1936); and
 (c) the entity paid, and was personally liable for, foreign tax (within the meaning of that Act) in respect of that foreign income (whether or not the entity was a subsidiary member of the group at the time of payment).
 (2) Section 160AF of the Income Tax Assessment Act 1936 operates as if:
 (a) the *head company had paid and been personally liable for the foreign tax; and
 (b) the entity had not paid and had not been personally liable for the foreign tax.
Note: Section 160AF of the Income Tax Assessment Act 1936 provides a foreign tax credit (which is a tax offset) of an amount that depends on:
(a) foreign tax that an entity paid, and was personally liable for, in respect of foreign income included in the entity's assessable income; and
(b) the amount of Australian tax payable (worked out as described in that section) in respect of the foreign income.
 (3) This section does not limit the operation of section 160AF of the Income Tax Assessment Act 1936.

Foreign tax on amounts not in head company's assessable income

717‑15  Transferring subsidiary member's excess foreign tax credits from earlier years to head company
 (1) This section operates for the purposes of section 160AFE of the Income Tax Assessment Act 1936 in relation to an income year if:
 (a) an entity (the joining entity) becomes a *subsidiary member of a *consolidated group at a time (the joining time); and
 (b) the joining time is:
 (i) before the start of that income year; and
 (ii) after the start of an earlier income year (the earlier year); and
 (c) the joining entity has *excess foreign tax credits (the transfer credits) from the earlier year.
 (2) For those purposes:
 (a) the *head company of the group is taken to have the transfer credits; and
 (b) the joining entity is taken not to have the transfer credits; and
 (c) if, apart from paragraph (a), the head company has *excess foreign tax credits from the earlier year—the transfer credits are taken to be included in those excess foreign tax credits.
 (3) Subsection (2) also has effect for the purposes of a subsequent operation of this section.
Example: An entity becomes a subsidiary member of a consolidated group in an income year. This section operates in relation to a later income year so that the entity no longer has the transfer credits mentioned in paragraph (1)(c) (see paragraph (2)(b)). The entity later leaves the group and becomes a subsidiary member of a second consolidated group. In a