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INCOME TAX ASSESSMENT ACT 1997 - SECT 832.560

Neutralising amount

             (1)  The neutralising amount for a * deducting hybrid mismatch is worked out by:

                     (a)  starting with the lesser of the amounts of each deduction or * foreign income tax deduction to which the amount gives rise; and

                     (b)  reducing (but not below nil) the result from paragraph (a) by the amount of any * dual inclusion income that is available to be applied in working out the neutralising amount.

Australian deduction--inclusions must be in Australia and in the other deducting country

             (2)  An amount of * dual inclusion income is available to be applied to reduce the * neutralising amount for a * deducting hybrid mismatch to which section 832-530 applies if:

                     (a)  the * deducting hybrid is eligible to apply the amount (see subsection 832-680(7)); and

                     (b)  the amount is * subject to Australian income tax for the purposes of subsection 832-680(1) in the income year mentioned in subsection 832-530(1); and

                     (c)  the amount is * subject to foreign income tax for the purposes of subsection 832-680(1) in the foreign country in which the * foreign income tax deduction arose.

Note:          Section 832-680 modifies the meanings of subject to Australian income tax and subject to foreign income tax for the purpose of working out dual inclusion income.

Offshore hybrid mismatch--inclusions must be in the deducting countries

             (3)  An amount of * dual inclusion income is available to be applied to reduce the * neutralising amount for a * deducting hybrid mismatch that is an * offshore hybrid mismatch if:

                     (a)  the * deducting hybrid is eligible to apply the amount (see subsection 832-680(7)); and

                     (b)  the amount is * subject to foreign income tax for the purposes of subsection 832-680(1) in the foreign country in which one of the * foreign income tax deductions arose, and in the same * foreign tax period; and

                     (c)  the amount is also subject to foreign income tax for the purposes of subsection 832-680(1) in the foreign country in which another of the foreign income tax deductions arose.



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