Document ID: chunk:federal_register_of_legislation:C2025C00029:section:9:p19
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 9 (pt 19/19)
Character Range: 7074156–7076431

controlling entity's excess tax EBITDA amount for the income year is the amount worked out using the following method statement.

      Method statement
           Step 1. For each controlled entity, work out the amount (if any) by which the *fixed ratio earnings limit of the controlled entity for the income year exceeds the sum of the following:

                (a) the controlled entity's *net debt deductions for the income year (for the purposes of this paragraph, treat a negative amount of net debt deductions as nil);
                (b) the total of the controlled entity's *FRT disallowed amounts for the 15 income years ending immediately before the income year (to the extent those amounts have not been applied under section 820‑56).

           Step 2. For each controlled entity:

                (a) work out the controlling entity's *TC direct control interest for each day in the income year; and
                (b) for each day on which the amount was 50% or greater, add the amounts; and
                (c) divide the result of paragraph (b) by the number of days in the income year during which the controlled entity was in existence. Express the result as a percentage.

           Step 3. For each controlled entity, multiply the result of step 1 by the percentage worked out under step 2. If the amount worked out under step 1 for a controlled entity is nil, the result for that controlled entity under this step will be nil.
           Step 4. Add up the amounts worked out under step 3.
           Step 5. Divide the result of step 4 by 0.3. The result of this step is the excess tax EBITDA amount.

Modification of TC direct control interest—companies
 (4) For the purposes of this section, in working out whether the controlling entity holds a *TC direct control interest in a company, apply subsection 820‑855(2) as if it instead included the modifications of Part X of the Income Tax Assessment Act 1936 set out in the following table.

Modifications of provisions in Part X of the Income Tax Assessment Act 1936
Item                                                                         Provisions                                                                                                                           Modifications