Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 4/34)
Character Range: 3534275–3537060

satisfies the residency requirement at the time the distribution is made if the entity at that time:
 (a) is a company or an individual; and
 (b) is a foreign resident; and
 (c) carries on business in Australia at or through a permanent establishment of the entity in Australia, being a permanent establishment within the meaning of:
 (i) a double tax agreement (as defined in Part X of the Income Tax Assessment Act 1936) that relates to a foreign country and affects the entity; or
 (ii) subsection 6(1) of that Act, if there is no such agreement;
and the distribution is attributable to the permanent establishment.

Subdivision 207‑D—No gross‑up or tax offset where distribution would not be taxed

Guide to Subdivision 207‑D

207‑80  What this Subdivision is about
      This Subdivision creates the appropriate adjustment to cancel the effect of the gross‑up and tax offset rules where a franked distribution (or a share of it) is, or would be, exempt income or *non‑assessable non‑exempt income in the relevant entity's hands (and therefore would not be taxed in any case).

Table of sections

Operative provisions
207‑85 Applying this Subdivision
207‑90 Distribution that is made to an entity
207‑95 Distribution that flows indirectly to an entity

Operative provisions

207‑85  Applying this Subdivision
  This Subdivision applies subject to Subdivisions 207‑E and 207‑F.
Note 1: Subdivision 207‑E sets out exceptions to the rules in this Subdivision.
Note 2: Where both this Subdivision and Subdivision 207‑F apply to an entity, the application of this Subdivision is subject to the rules in Subdivision 207‑F: see subsections 207‑145(3) and 207‑150(7) and (8).

207‑90  Distribution that is made to an entity

Whole of distribution not assessable
 (1) If:
 (a) a *franked distribution is made to an entity; and
 (b) the distribution does not *flow indirectly through the entity to another entity; and
 (c) the distribution is *exempt income or *non‑assessable non‑exempt income in the hands of the entity;
then, for the purposes of this Act:
 (d) the amount of the *franking credit on the distribution is not included in the assessable income of the entity under section 207‑20; and
 (e) the entity is not entitled to a *tax offset under this Division because of the distribution.

Part of distribution not assessable
 (2) If:
 (a) a *franked distribution is made to an entity; and
 (b) the distribution does not *flow indirectly through the entity to another entity; and
 (c) a part of the distribution (the relevant part) is *exempt income or *non‑assessable non‑exempt income in the hands of the entity;
then, for the purposes of this Act:
 (d) the amount of the distribution is taken to have been reduced by the relevant part; and
 (e) the amount of the *franking credit