Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section applies in working out, for the purposes of this Subdivision, whether an amount is * subject to foreign income tax.
(2) An amount of income or profits of an entity is treated as if it were not * subject to foreign income tax if:
(a) apart from this section, the amount would be * subject to foreign income tax; and
(b) the rate of * foreign income tax (except a tax covered by subsection 832 - 130(7)) (the lower rate ) on the amount under the law of the relevant foreign country is lower than the rate (the ordinary rate ) that would ordinarily be imposed on interest income derived by an entity of that kind in the foreign country.
Amount of a deduction/non - inclusion mismatch
(3) However, for the purposes of working out the amount of a * deduction/non - inclusion mismatch that is affected by this section, the amount of a payment that is treated by this section as not being * subject to foreign income tax is to be discounted by multiplying it by the following fraction:
where:
"lower rate" means the lower rate mentioned in paragraph (2)(b).
"ordinary rate" means the ordinary rate mentioned in paragraph (2)(b).