Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) A payment an entity (the payer ) makes is an importing payment in relation to an * offshore hybrid mismatch if:
(i) apart from section 832 - 610, the payment, or a part of the payment, gives rise to a deduction in an income year covered by subsection (2); or
(ii) the payment, or a part of the payment, gives rise to a * foreign income tax deduction in a foreign country that has * foreign hybrid mismatch rules, in a * foreign tax period covered by subsection (2); and
(b) the payment is made directly, or indirectly through one or more interposed entities, to another entity; and
(c) the other entity (the offshore deducting entity ) is:
(i) the entity that made the payment that gave rise to the offshore hybrid mismatch; or
(ii) if the offshore hybrid mismatch is a * deducting hybrid mismatch--the * deducting hybrid.
Period within which mismatch may be imported
(2) For the purposes of paragraph (1)(a), a * foreign tax period or income year is covered by this subsection if:
(a) it ends at or after the end of the foreign tax period in which a * deduction component of the * offshore hybrid mismatch arose; and
(b) it has at least one day in common with that period.
Indirect importations
(3) For the purposes of determining whether a payment is made indirectly through one or more interposed entities to the offshore deducting entity:
(a) it is sufficient if payments exist between each interposed entity, and it is not necessary to demonstrate that each payment in a series of payments funds the next payment, or is made after the previous payment; and
(b) each payment made by an interposed entity must:
(i) give rise to a * foreign income tax deduction in a country that does not have * foreign hybrid mismatch rules; and
(ii) not give rise to a * deduction/non - inclusion mismatch.
Loss surrender and grouping relief
(4) Subsection (5) applies if:
(a) a payment is made to an entity (the first entity ); and
(b) another entity (the second entity ) makes a payment (the second payment ) to a third entity; and
(c) the first entity and the second entity are in the same * Division 832 control group; and
(d) under the law of a foreign country relating to * foreign income tax (except a tax covered by subsection 832 - 130(7)):
(i) a * foreign income tax deduction arises in respect of the second payment; and
(ii) the foreign income tax deduction may, as a result of a concessional feature of that law, be transferred to, shared with, or otherwise applied by, the first entity.
Note: For the meaning of Division 832 control group , see section 832 - 205.
(5) For the purposes of this section, treat:
(a) a payment as having been made by the first entity to the second entity; and
(b) the payment as having given rise to a * foreign income tax
deduction (but not a * deduction/non - inclusion mismatch) in the foreign
country mentioned in paragraph (4)(d).