Document ID: chunk:federal_register_of_legislation:C2025C00029:section:9:p10
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 9 (pt 10/19)
Character Range: 7052489–7055138

equivalent to interest; or
 (ii) any amount directly incurred by another entity in obtaining or maintaining the financial benefits received, or to be received, by the other entity under a *scheme giving rise to a *debt interest; or
 (iii) any other expense that is incurred by another entity and that is specified in the regulations made for the purposes of this subparagraph;
 (c) next, subtract the result of paragraph (b) from the result of paragraph (a).
 (4) To avoid doubt, an entity's net debt deductions for an income year can be a negative amount.

820‑51  Meaning of fixed ratio earnings limit and group ratio earnings limit
 (1) An 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