Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 832.405

  (1)   The payment meets the hybrid requirement in this section if:

  (a)   the payment is made directly, or indirectly through one or more interposed entities, to a * reverse hybrid; and

  (b)   subsection   (2) or (3) applies.

Payment would have been taxed in Australia

  (2)   This subsection applies if:

  (a)   the investor country identified in subsection   832 - 410(3) is Australia; and

  (b)   either:

  (i)   the amount of the * deduction/non - inclusion mismatch exceeds the amount that would be the amount of that mismatch if the amount of the payment that was * subject to Australian income tax for an income year was instead worked out on the assumption in subsection   (4); or

  (ii)   on the assumption in subsection   (4), the payment would have given rise to a * hybrid financial instrument mismatch, a * hybrid payer mismatch or a * reverse hybrid mismatch.

Payment would have been taxed in a foreign country

  (3)   This subsection applies if:

  (a)   the investor country identified in subsection   832 - 410(3) is a foreign country; and

  (b)   either:

  (i)   the amount of the * deduction/non - inclusion mismatch exceeds the amount that would be the amount of that mismatch if the amount of the payment that was * subject to foreign income tax for a * foreign tax period was instead worked out on the assumption in subsection   (4); or

  (ii)   on the assumption in subsection   (4), the payment would have given rise to a * hybrid financial instrument mismatch, a * hybrid payer mismatch or a * reverse hybrid mismatch.

Assumption--payment was made to the investing taxpayer

  (4)   For the purposes of subsections   (2) and (3), assume that the payment had instead been made:

  (a)   by the same entity; but

  (b)   directly to the investing taxpayer identified in paragraph   832 - 410(3)(a) or (b).