Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 175.30

  (1)   The Commissioner may disallow a deduction of a company if:

  (a)   a person (other than the company) has obtained or will obtain a tax benefit in connection with a * scheme; and

  (b)   the scheme would not have been entered into or carried out if the company had not incurred some or all (the available expense ) of the loss, outgoing or expenditure that the deduction is for.

However, the deduction may be disallowed only to the extent of the available expense.

  (2)   The Commissioner may disallow deductions of a company (or parts of them) if:

  (a)   a person has obtained or will obtain a tax benefit in connection with a * scheme; and

  (b)   the scheme would not have been entered into or carried out if some or all (the available amount ) of the assessable income that the company * derived or of a * capital gain that accrued to the company:

  (i)   before it incurred the losses, outgoings or expenditure that the deductions were for; and

  (ii)   in the same income year as it incurred them;

    had not been derived or had not accrued, as the case may be.

The disallowed deductions and parts of deductions may exceed the available amount.

Note:   The disallowance may result in a tax loss for the income year. See section   175 - 35.

  (3)   An expression means the same in this section as in Part   IVA of the Income Tax Assessment Act 1936 .

  (4)   The Commissioner cannot disallow under this section if:

  (a)   the person who has obtained or will obtain the tax benefit had a * shareholding interest in the company at some time during the income year; and

  (b)   the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.

Note:   Section   175 - 100 allows the Commissioner to disallow the whole or part of any deductions of an insolvent company.