Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p16
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 16/66)
Character Range: 6365216–6367945

Head company treated as OBU

717‑705  Object of this Subdivision
  The object of this Subdivision is to ensure that certain rules in the Income Tax Assessment Act 1936 relating to offshore banking units interact properly with the consolidation regime in this Part.

717‑710  Head company treated as OBU
 (1) Division 9A of Part III of the Income Tax Assessment Act 1936 applies to the *head company of a *consolidated group as if the head company were an OBU (within the meaning of that Division) at a time when a *subsidiary member of the group is an OBU (within the meaning of that Division).
 (2) Subsection (1) operates for the head company core purposes mentioned in subsection 701‑1(2).

Division 719—MEC groups

Subdivision 719‑A—Modified application of Part 3‑90 to MEC groups

719‑2  Modified application of Part 3‑90 to MEC groups
 (1) This Part (other than Division 703 and this Division) has effect in relation to a *MEC group in the same way in which it has effect in relation to a *consolidated group.
Note: A provision in this Part (other than in Division 703 or in this Division) mentioning 2 separate consolidated groups will, under subsection (1), have an additional operation when the groups are both MEC groups or when one is a MEC group and the other is a consolidated group.
 (2) However, that effect is subject to the modifications set out in this Division.
 (3) For the purposes of subsection (1), a reference in this Part (other than in Division 703 or this Division) to a provision in Division 703 applies as if it referred instead to that provision or the corresponding provision in Subdivision 719‑B (as appropriate).

Subdivision 719‑B—MEC groups and their members

719‑4  What this Subdivision is about

      A MEC group and a potential MEC group each consist of certain Australian‑resident entities that are wholly‑owned subsidiaries of a foreign top company.
      A company that is a first‑tier subsidiary of the top company is a tier‑1 company.
      A MEC group cannot be formed unless there are at least 2 tier‑1 companies of the top company that are eligible to be members of the group.
      A MEC group becomes consolidated at a time chosen by the eligible tier‑1 companies.
      One of the eligible tier‑1 companies becomes the head company of the group.
      The remaining members of the group are the subsidiary members.

Table of sections

Basic concepts
719‑5 What is a MEC group?
719‑10 What is a potential MEC group?
719‑15 What is an eligible tier‑1 company?
719‑20 What is a top company and a tier‑1 company?
719‑25 Head company, subsidiary members and members of a MEC group
719‑30 Treating entities as wholly‑owned subsidiaries by disregarding employee shares
719‑35 Treating