Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:9_1:p3
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 9 cl 1 (pt 3/5)
Character Range: 203443–206094

other subsidiary member of the group are taken for the purposes of sections 128TA and 128TB of the Income Tax Assessment Act 1936 to be parts of the *head company of the group, rather than separate entities, during that period.

Note 1: This has the effect that:

(a) FDA credits and FDA debits arise under sections 128TA and 128TB (respectively) of the Income Tax Assessment Act 1936 for the head company of a consolidated group but not for a subsidiary member of the group; and

(b) the shareholdings of all members of a consolidated group are aggregated to work out whether dividends paid to a member are non‑portfolio dividends for the purposes of those sections.

Note 2: Section 717‑10 may also affect FDA credits and FDA debits for the head company of a consolidated group. It treats the head company as having paid and been personally liable for foreign tax on foreign income included in its assessable income if a subsidiary member of the group actually paid and was personally liable for the tax.

FDA declaration for dividend paid by subsidiary member

717‑520  Head company may make FDA declaration

 (1) This section operates if:
 (a) on a day, a company that is a *subsidiary member of a *consolidated group pays dividends (within the meaning of Subdivision B of Division 11A of Part III of the Income Tax Assessment Act 1936) to shareholders (within the meaning of that Act) in respect of *shares in the company; and
 (b) on the day, there is an *FDA surplus for the *head company of the consolidated group.

 (2) The *head company may make an *FDA declaration specifying an *FDA declaration percentage under subsection 128TC(1) of the Income Tax Assessment Act 1936 as if the head company were paying the dividends.

Note: If the head company makes an FDA declaration:

(a) an FDA debit equal to the sum of the FDA declaration amounts worked out for the dividends by reference to the FDA declaration percentage will arise for the head company just after the start of the day under section 128TB of the Income Tax Assessment Act 1936; and

(b) foreign resident shareholders in the subsidiary member will be relieved from withholding tax on amounts of the dividends not exceeding the FDA declaration amounts.

 (3) In this Act:

FDA declaration percentage has the same meaning as in Subdivision B of Division 11A of Part III of the Income Tax Assessment Act 1936.

 (4) However, subsection 128TC(2) of the Income Tax Assessment Act 1936 operates in relation to the *FDA declaration percentage on the basis that:
 (a) the company mentioned in that subsection is the *subsidiary member; and
 (b) the dividends were paid to shareholders in