This Subdivision neutralises a reverse hybrid mismatch if it involves a deduction in Australia.

A deduction/non - inclusion mismatch is a reverse hybrid mismatch if it is made directly or indirectly to a reverse hybrid, and the mismatch would not have arisen, or would have been less, if the payment had instead been made directly to an investor in the reverse hybrid.

An entity is a reverse hybrid if it is transparent for the purposes of the tax law of the country in which it is formed, but non - transparent for the purposes of the tax law of the country in which investors in it are subject to tax (resulting in non - inclusion).

A reverse hybrid mismatch that is not neutralised by this Subdivision (or by foreign hybrid mismatch rules) is an offshore hybrid mismatch, which might give rise to an imported hybrid mismatch under Subdivision   832 - H.