Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_6:p25
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 25/26)
Character Range: 236796–239565

this Division is about

      If the head company of a consolidated group fails to meet an income tax related liability by the time it becomes due and payable, entities that were subsidiary members of the group during the period to which the liability relates can also be responsible for all or part of the liability.

Table of sections

Object

721‑5 Object of this Division

When this Division operates

721‑10 When this Division operates

Joint and several liability of contributing member

721‑15 Head company and contributing members jointly and severally liable to pay group liability
721‑20 Limit on liability where group first comes into existence

Tax sharing agreements

721‑25 When a group liability is covered by a tax sharing agreement
721‑30 TSA contributing members liable for contribution amounts
721‑35 When a TSA contributing member has left the group clear of the group liability

[This is the end of the Guide.]

Object

721‑5  Object of this Division
The object of this Division is to secure the payment of certain tax liabilities of the *head company of a *consolidated group where the head company fails to meet all of those liabilities by the time they become due and payable. Accordingly:
 (a) if a relevant liability is not covered by a tax sharing agreement—this Division provides for a process to make certain entities that were *subsidiary members of the group for at least part of the period to which each tax liability relates jointly and severally liable with the head company for those liabilities; or
 (b) if a relevant liability is covered by a tax sharing agreement—this Division:
 (i) provides for a process to make each of those entities liable for the amount determined under the agreement in relation to the liability; but
 (ii) exempts an entity from a liability determined under the agreement if it leaves the group in certain circumstances.

When this Division operates

721‑10  When this Division operates

 (1) This Division operates if:
 (a) a *tax‑related liability mentioned in subsection (2) (a group liability) of the *head company of a *consolidated group was not paid or otherwise discharged in full by the time the liability became due and payable (the head company's due time); and
 (b) one or more entities (the contributing members) were *subsidiary members of the group for at least part of the period to which the group liability relates.

Note: This Division operates even if some or all of the contributing members were no longer members of the group at the head company's due time.

 (2) The following table lists the *tax‑related liabilities for the purposes of paragraph (1)(a) and the periods to which each of those liabilities relate:

Tax‑related liabilities of the head company and the periods