Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 719.20

What is a top company and a tier-1 company?

             (1)  At a particular time, a company is:

                     (a)  a top company if the requirements in item 1 of the table are met; or

                     (b)  a tier-1 company of the top company if the requirements in item 2 of the table are met.

 

Top companies and tier-1 companies

Column 1
Kind of entity

Column 2
Income tax treatment requirements

Column 3
Residence requirements

Column 4
Ownership requirements

1   Top company

No specific requirements

The company must be a foreign resident

The company must not be a * wholly-owned subsidiary of another company (other than a company that is a * prescribed dual resident, or a company that is an Australian resident that fails to meet a condition in column 2 of item 2)

2   Tier-1 company

The company must have all or some of its taxable income (if any) taxed at a rate that is or equals the * corporate tax rate apart from this Part

The company must not be covered by an item in the table in section 703-20

The company must be an Australian resident (but not a * prescribed dual resident)

The company:

(a) must be a * wholly-owned subsidiary of the * top company; and

(b) must not be a wholly-owned subsidiary of a company that is an Australian resident (other than a company that fails to meet a condition in column 2 or 3)

             (2)  For the purposes of paragraph (b) of column 4 of item 2 of the table, in determining whether a company (the test company) is a * tier-1 company, if 2 or more other companies beneficially own all of the * membership interests in the test company, and each of those other companies:

                     (a)  is a * wholly-owned subsidiary of the * top company; and

                     (b)  meets the conditions in columns 2 and 3 of item 2 of the table;

the test company is taken to be a wholly-owned subsidiary of one of those other companies.



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