TA 2016/7 – Consolidated company groups with an foreign ‘permanent establishment’ over-stating the s23AH income that is not assessable or over-claiming deductions incurred to acquire non-assessable income

On Wednesday 10 Aug 2016, the ATO issued TA 2016/7 (the first of 3 on that day). It relates to arrangements they have seen of Australian company groups that have elected to consolidate, for Australian income tax purposes, with one of those companies having an off-shore Permanent Establishment (PE). There is a tension here between…