Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 5/8)
Character Range: 3180138–3182949

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Subdivision 170‑A—Transfer of tax losses within certain wholly‑owned groups of companies

Guide to Subdivision 170‑A

170‑1  What this Subdivision is about
      A company can transfer a surplus amount of its tax loss to another company so that the other company can deduct the amount in the income year of the transfer. One of the companies must be an Australian branch of a foreign bank, and both companies must be members of the same wholly‑owned group.

Table of sections
170‑5 Basic principles for transferring tax losses

Effect of transferring a tax loss
170‑10 When a company can transfer a tax loss
170‑15 Income company is taken to have incurred transferred loss
170‑20 Who can deduct transferred loss
170‑25 Tax treatment of consideration for transferred tax loss

Conditions for transfer
170‑30 Companies must be in existence and members of the same wholly‑owned group etc.
170‑32 Tax loss incurred by the loss company because of a transfer under Subdivision 707‑A
170‑33 Alternative test of relations between the loss company and other companies
170‑35 The loss company
170‑40 The income company
170‑42 If the income company has become the head company of a consolidated group or MEC group
170‑45 Maximum amount that can be transferred
170‑50 Transfer by written agreement
170‑55 Losses must be transferred in order they are incurred
170‑60 Income company cannot transfer transferred tax loss

Effect of agreement to transfer more than can be transferred
170‑65 Agreement transfers as much as can be transferred
170‑70 Amendment of assessments

Australian permanent establishments of foreign financial entities
170‑75 Treatment like Australian branches of foreign banks

170‑5  Basic principles for transferring tax losses
 (1) A company can transfer a tax loss to another company so that the other company can deduct it in the income year of the transfer.
 (2) Both companies must be members of the same wholly‑owned group. There are other eligibility requirements that they must also satisfy.
 (2A) One of the companies must be an Australian branch of a foreign bank. The other company must be:
 (a) the head company of a consolidated group or MEC group; or
 (b) not a member of a consolidatable group.
Note: This Subdivision applies to Australian permanent establishments of foreign entities that are financial entities in the same way as it applies to Australian branches of foreign banks. See section 170‑75.
 (3) The transferred loss must be "surplus" in the sense that the transferring company cannot use it because there is not enough assessable income to offset it. The other company must have enough assessable income to offset the transferred tax loss.
 (4) Neither company must be prevented from deducting the loss by Division 165 or 175.
Note: Division 165 deals with the