Document ID: chunk:federal_register_of_legislation:C2024A00023:clause:2_29:p6
Version: federal_register_of_legislation:C2024A00023
Segment Type: clause
Provision Reference: sch 2 cl 29 (pt 6/15)
Character Range: 30072–32700

entity's fixed ratio earnings limit for an income year is 30% of its *tax EBITDA for the income year.
 (2) An entity's group ratio earnings limit for an income year is its *group ratio for the income year multiplied by its *tax EBITDA for the income year.

820‑52  Meaning of tax EBITDA
 (1) An entity's tax EBITDA for an income year is worked out as follows:
 (a) first, work out the entity's taxable income or *tax loss for the income year (disregarding the operation of this Division (other than Subdivision 820‑EAA) and treating a tax loss as a negative amount);
 (b) next, add the entity's *net debt deductions for the income year;
 (c) next, add the sum of the entity's deductions (if any) from its assessable income for the income year that are any of the following:
 (i) *general deductions that relate to forestry establishment and preparation costs unless those costs relate to the clearing of native forests;
 (ii) deductions under Divisions 40 and 43 (other than deductions for the entire amount of an expense incurred by the entity);
 (iii) deductions under section 70‑120;
 (ca) next, if the entity is an entity to which subsection 820‑60(1) applies—add the *excess tax EBITDA amount (if any) worked out under that section for the income year;
 (d) next, make adjustments to the result of paragraph (c) or (ca), as the case requires, in accordance with regulations (if any) made for the purposes of this paragraph.
If the result of paragraph (d) is less than zero, treat it as being zero.
Note: The entity's net debt deductions for the income year can be a negative amount.

Tax losses from earlier income years
 (1A) In working out the taxable income or *tax loss of a *corporate tax entity for an income year for the purposes of subsection (1), assume that:
 (a) the entity chooses to deduct, under subsection 36‑17(2) or (3), all of the entity's tax losses for *loss years occurring before the income year; and
 (b) subsection 36‑17(5) does not apply to that choice.

Franked distributions
 (2) For the purposes of this section, disregard Division 207, to the extent that Division results in an amount of, or a *share of, a *franking credit being included in the entity's assessable income for the income year.

Dividends etc.
 (3) In working out the taxable income or *tax loss of an entity for the purposes of subsection (1), disregard any *dividend or *non‑share dividend paid to the entity by an *associate entity and included in the entity's assessable income under section 44 of the Income Tax Assessment Act 1936.

Trusts other than AMITs
 (4) If the entity is a trust other than an *AMIT:
 (a) treat the