This TD, issued Wed 18.7.2012, provides that a non-share equity interest will be taken to have been “issued at or through a permanent establishment” for the purposes of s215-10(1)(c) of the ITAA 1997 where the capital raising is a transaction “of” the business carried on by an authorised deposit-taking institution (ADI) at or through the permanent establishment in a listed country. [s215-10 is about what dividends paid by ADI’s are unfrankable and to what extent.]
This means that:
- the non-share equity interest must be offered to investors in the course of the business conducted by an ADI at or through the permanent establishment in a listed country; and
- the non-share equity interest must be allocated to the investor by personnel conducting the business of the permanent establishment; and
- the transaction documents are executed at the permanent establishment; and
- the transaction documents provide that the non-share equity interest is transferred to the investor at the permanent establishment and consequently the non-share equity interest is transferred at the permanent establishment; and
- at the time of transfer, the personnel conducting the business at the permanent establishment relinquishes all control over the non-share equity interest.
The TD was previously issued as Draft Taxation Determination TD 2009/D2.
DATE OF EFFECT: The Determination applies to years of income commencing both before and after its date of issue.
[LTN 137, 18/7]