Document ID: chunk:federal_register_of_legislation:C2025C00014:section:148:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 148 (pt 1/3)
Character Range: 1316498–1319111

148  Reinsurance with non‑residents
 (1) Notwithstanding anything contained in this Act other than section 177F, but subject to this section, where a person carrying on the business of insurance in Australia reinsures out of Australia the whole or part of any risk with a non‑resident:
 (a) the premiums paid or credited in respect of the reinsurance shall not be:
 (i) an allowable deduction to the person carrying on the business of insurance in Australia; or
 (ii) included in the assessable income of the non‑resident; and
 (b) the income of the person carrying on the business of insurance in Australia shall not include sums recovered from that non‑resident in respect of a loss on any risk so reinsured.
 (2) A person carrying on the business of insurance in Australia who reinsures out of Australia the whole or part of any risk with a non‑resident may elect, in accordance with this section, that the provisions of subsection (1) shall not be applied in arriving at that person's taxable income, and thereupon:
 (a) those provisions shall not apply in arriving at that person's taxable income of a year of income to which the election applies; and
 (b) that person shall be liable to furnish returns, and to pay tax, in accordance with the succeeding provisions of this section, as agent for all non‑residents with whom that person so reinsures.
 (3) Where a person makes an election under subsection (2), he or she shall, subject to subsection (5), be assessed and liable to pay tax as agent, on an amount equal to 10% of the sum of the gross amounts of the premiums paid or credited by him or her in the year of income (being a year of income to which the election applies) to non‑residents in respect of all such reinsurances, as if that amount were the taxable income of a non‑resident company (not being a private company) not carrying on business in Australia by means either of a principal office or a branch.
 (4) A person who has made an election under this section shall, as agent, furnish to the Commissioner, within the prescribed time, or within such further time as the Commissioner allows, in respect of every year of income to which the election applies:
 (a) a return showing the gross amounts of the premiums paid or credited by that person to non‑residents in respect of all such reinsurances; or
 (b) 2 returns, of which:
 (i) one shall show the gross amounts of such premiums paid or credited by that person to non‑residents which are companies; and
 (ii) the other shall show the gross amounts of such premiums paid or credited by that person to non‑residents who are not companies.