Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) The payment meets the hybrid requirement in this section if:
(a) the payment is made directly, or indirectly through one or more interposed entities, to a * branch hybrid; and
(b) subsection (2) or (3) applies.
Payment would have been taxed in Australia
(2) This subsection applies if:
(a) the residence country identified in subsection 832 - 485(2) is Australia; and
(i) the amount of the * deduction/non - inclusion mismatch exceeds the amount that would be the amount of that mismatch if the amount of the payment that was * subject to Australian income tax for an income year was instead worked out on the assumption in subsection (4); or
(ii) on the assumption in subsection (4), the payment would have given rise to a * hybrid financial instrument mismatch or a * hybrid payer mismatch.
Payment would have been taxed in a foreign country
(3) This subsection applies if:
(a) the residence country identified in subsection 832 - 485(2) is a foreign country; and
(i) the amount of the * deduction/non - inclusion mismatch exceeds the amount that would be the amount of that mismatch if the amount of the payment that was * subject to foreign income tax for a * foreign tax period was instead worked out on the assumption in subsection (4); or
(ii) on the assumption in subsection (4), the payment would have given rise to a * hybrid financial instrument mismatch or a * hybrid payer mismatch.
Assumption--residence country treated payment as non - branch income
(4) For the purposes of subsections (2) and (3), assume that the payment was instead treated as income derived by the * liable entity but not in carrying on a business at or through a * PE in another country for the purposes of:
(a) if the residence country is Australia--this Act; or
(b) if the residence country is a foreign country--the law of
the residence country relating to * foreign income tax (except a tax covered
by subsection 832 - 130(7)).