Income tax: Offshore Banking Units - can a sub-subsidiary of a bank be registered as an OBU?

Yes, but only where the subsidiary and sub-subsidiary are wholly owned by a bank which is registered as an offsore banking unit (OBU).

Section 128AE of the Income Tax Assessment Act 1936 lists the entities which may be registered as OBUs: • savings and trading banks • State banks • financial institutions authorised to deal in foreign exchange • wholly owned subsidiaries of banks registered as OBUs

It is not necessary for the interposed entity to be a bank or an OBU so long as all of the shares are ultimately beneficially owned by a bank registered as an OBU.