Document ID: chunk:federal_register_of_legislation:C2018A00084:clause:1_3:p5
Version: federal_register_of_legislation:C2018A00084
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 5/10)
Character Range: 100562–103250

or profits of the other member (the funding income or profits); and
 (d) the funding income or profits were:
 (i) if the country mentioned in paragraph (a) is Australia—*subject to Australian income tax; or
 (ii) if the country mentioned in paragraph (a) is a foreign country—*subject to foreign income tax in the foreign country; and
 (e) the funding income or profits were not *dual inclusion income under subsection (1) (disregarding subsection (5)) in the country.
 (5) For the purposes of subsection (1), the on‑payment amount is treated as if it were:
 (a) if the country mentioned in paragraph (4)(a) is Australia—*subject to Australian income tax in the income year in which the time mentioned in paragraph (4)(b) occurs; or
 (b) if the country mentioned in paragraph (4)(a) is a foreign country—*subject to foreign income tax in the foreign country in the *foreign tax period in which the time mentioned in paragraph (4)(b) occurs.
 (6) Two or more entities are members of a group (a dual inclusion income group) in a country for the purposes of this Division if in that country:
 (a) the entity that is a *liable entity in respect of the income or profits of each of the entities is the same entity; and
 (b) no other entity is a liable entity in respect of the income or profits of any of the entities.

When an entity is eligible to apply dual inclusion income
 (7) An entity is eligible to apply an amount of *dual inclusion income if the amount is income or profits of:
 (a) the entity; or
 (b) if paragraph (a) does not apply and the entity is a member of a dual inclusion income group in any country—an entity that is a member of the dual inclusion income group.
 (8) However, an entity is not eligible to apply the amount if it has already been applied by any entity by a previous application of a provision of this Division.

Subdivision 832‑J—Integrity rule

832‑720  What this Subdivision is about

      This Subdivision contains an integrity measure that disallows an Australian deduction of an entity (the paying entity) for a payment of interest (or a payment of a similar character) under a scheme to a foreign entity (the interposed foreign entity). The deduction will be disallowed if certain conditions are satisfied, including that:
             (a) the paying entity, the interposed foreign entity and another foreign entity (the ultimate parent entity) are in the same Division 832 control group; and
             (b) the payment is not subject to Australian income tax; and
             (c) the highest rate of foreign income tax (the foreign country rate) on the payment is 10% or less; and
             (d) it is reasonable to conclude (having regard to