(b) an amount representing a share in the net loss of a partnership, trust or other transparent entity. (5) For the purposes of subsection (4), a reference in this Division to the *scheme under which a payment is made is taken to be a reference to: (a) if paragraph (4)(a) applies—the scheme under which the asset is held; or (b) if paragraph (4)(b) applies—the scheme under which the net loss arose. 832110 Disregard effect of Division in determining deductions In determining for the purposes of this Division whether a payment gives rise to a deduction, disregard the effect of this Division. 832115 Meaning of foreign income tax deduction (1) An amount of a loss or outgoing incurred by an entity is a foreign income tax deduction in a foreign country in a *foreign tax period if the entity is entitled to deduct the amount in working out its tax base for the foreign tax period under a law of the foreign country dealing with *foreign income tax (except *credit absorption tax, *unitary tax or a withholdingtype tax). (2) To avoid doubt, an amount of a loss or outgoing may be a foreign income tax deduction in a foreign country in a *foreign tax period even if the relevant entity’s tax base is nil, or a negative amount. Effect of foreign hybrid mismatch rules (3) In determining for the purposes of this section whether an entity is entitled to deduct an amount as mentioned in subsection (1), disregard the effect of the following: (a) any provisions of *foreign hybrid mismatch rules of a foreign country; (b) any provisions of another law of a foreign country relating to *foreign income tax (except *credit absorption tax, *unitary tax or a withholdingtype tax) that has substantially the same effect as foreign hybrid mismatch rules.
832200 When a payment gives rise to a hybrid financial instrument mismatch (1) A payment gives rise to a hybrid financial instrument mismatch if: (a) the payment gives rise to a *hybrid mismatch under section 832215 or 832230; and (b) subsection (3) or (6) applies. Note: As a result of ordering rules in later Subdivisions, a payment that gives rise to a hybrid financial instrument mismatch does not also give rise to a hybrid mismatch under a later Subdivision of this Division. (2) The deduction component of the *hybrid financial instrument mismatch is the *deduction component of the *deduction/noninclusion mismatch. (3) This subsection applies if the following entities are related for the purposes of subsection (4): (a) the entity that made the payment; (b) each entity that is a *liable entity in respect of the income or profits of the recipient of the payment. Note: For the definition of liable entity, see section 832335. Related persons (4) Two entities are related for the purposes of this subsection if any of the following apply: (a) the entities are in the same *Division 832 control group; (b) one of the entities holds a *total participation interest of 25% or more in the other entity; (c) a third entity holds a total participation interest of 25% or more in each of the entities. (5) For the purposes of subsection (4), treat the *direct participation interest of an entity (the holding entity) in another entity (the test entity) as being the sum of the direct participation interests held by the holding entity and its *associates in the test entity. Structured arrangement (6) This subsection applies if the *scheme under which the payment is made is a *structured arrangement.