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INCOME TAX ASSESSMENT ACT 1997 - SECT 832.525

What this Subdivision is about

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

A deduction/deduction mismatch is generally a deducting hybrid mismatch.

An entity is a deducting hybrid if a payment it makes is deductible for the purposes of the tax law of 2 countries.

However, unless the deducting hybrid is a dual resident, there are rules identifying which country is the primary response country. If Australia is not the primary response country, this Subdivision will not neutralise the deducting hybrid mismatch unless:

  (a)   the primary response country does not have hybrid mismatch rules; and

  (b)   the relevant parties are in the same control group, or the mismatch arose under a structured arrangement.

The neutralising amount for the deducting hybrid mismatch is reduced by dual inclusion income.

A deducting 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.

Table of sections

Operative provisions

832 - 530   Deduction not allowable

832 - 535   Additional requirements for secondary response

832 - 540   When a deducting hybrid mismatch is an offshore hybrid mismatch

832 - 545   When an amount gives rise to a deducting hybrid mismatch

832 - 550   Deducting hybrid

832 - 555   Identifying a secondary response country

832 - 560   Neutralising amount

832 - 565   Adjustment if deducting hybrid has dual inclusion income in a later year


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