Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 832.410

  (1)   An entity (the test entity ) is a reverse hybrid in relation to a payment made to it if:

  (a)   subsection   (2) applies to the entity in relation to a country and the payment; and

  (b)   subsection   (3) applies to the entity in relation to a different country and the payment.

Note:   The entity, the payments it makes, and its income or profits are generally identified disregarding tax provisions: see section   832 - 30.

Formation country--entity is transparent and payment is not within the tax base

  (2)   This subsection applies to a test entity in relation to a country (the formation country ) and a payment made to the entity if:

  (a)   the test entity is formed in the formation country; and

  (b)   for the formation country, the test entity is:

  (i)   not a * liable entity; and

  (ii)   for Australia--not a * member of a * consolidated group or * MEC group; and

  (c)   for the formation country, another entity (an investor ) is a liable entity in respect of income or profits of the test entity.

Note:   For the meaning of liable entity , see section   832 - 325.

Investor country--entity is not transparent

  (3)   This subsection applies to a test entity in relation to a country (the investor country ) and a payment made to the entity if, in the investor country:

  (a)   an investor identified in paragraph   (2)(c) is a * liable entity (an investing taxpayer ) in respect of its own income or profits, but not in respect of the test entity's income or profits; or

  (b)   an entity that is a liable entity (also an investing taxpayer ) in respect of the investor's income or profits is not also a liable entity in respect of the test entity's income or profits.