Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 417.90

Transferring tax losses attributable to activities undertaken before the Timor Sea Maritime Boundaries Treaty entered into force

  (1)   If:

  (a)   you have a * tax loss for the income year in which the * Timor Sea Maritime Boundaries Treaty entered into force, or for an earlier income year; and

  (b)   some or all of the tax loss is attributable to you undertaking * transitioned petroleum activities before that treaty entered into force;

you may, for that income year or a later income year, choose to transfer all or any part of the amount of the tax loss that is so attributable to a * corporate tax entity (the transferee ) that is your * associate and either is an Australian resident or has a * permanent establishment in Australia.

Transferring or applying other tax losses

  (2)   If:

  (a)   you have a * tax loss for an income year (the loss year ); and

  (b)   some or all of the tax loss is attributable to you undertaking * transitioned petroleum activities; and

  (c)   paragraph   (1)(b) does not apply to those activities;

you may, for that income year or a later income year:

  (d)   choose to transfer all or any part of the amount of the tax loss that is so attributable to a * corporate tax entity (the transferee ) that either is an Australian resident or has a * permanent establishment in Australia; or

  (e)   choose to apply all or any part of the amount of the tax loss that is so attributable as a deduction from your assessable income for any of the 4 income years preceding the income year for which you make the choice.

  (3)   However:

  (a)   the total amount chosen to be transferred or applied under subsection   (2) for an income year must not exceed 10% of the total amount:

  (i)   on which your liability for * foreign income tax under the law of Timor - Leste is required to be worked out; and

  (ii)   that relates to undertaking those * transitioned petroleum activities during that year; and

  (b)   you cannot make a choice under paragraph   (2)(e) for an income year if you do not have a * franking surplus at the end of that year; and

  (c)   the total amount chosen to be applied under paragraph   (2)(e) for an income year must not exceed the sum of:

  (i)   the amount of your franking surplus at the end of that year; and

  (ii)   the product of the amount of that surplus and the * corporate tax gross - up rate.

  (4)   In working out for the purposes of paragraph   (3)(a) the total amount chosen to be transferred or applied under subsection   (2) for an income year, disregard:

  (a)   any part of the * tax loss attributable to deductions for assets allocated to a project pool under section   417 - 35; and

  (b)   any part of the * tax loss attributable to deductions for assets allocated to a project pool under Subdivision   40 - I, to the extent that the deductions relate to * project amounts to which subsection   417 - 45(1) or (2) applies.

  (5)   In working out for the purposes of paragraph   (3)(a) the total amount on which your liability for * foreign income tax under the law of Timor - Leste is required to be worked out, disregard the amounts of any deductions for tax paid under the law of Timor - Leste.

  (6)   Paragraphs   (3)(b) and (c) do not apply if you were a foreign resident (other than a * NZ franking company) for more than half of the income year for which the choice was made.