Is the Fund excluded from liability to withholding tax on its dividend income derived in respect of assets acquired on or before XX March 20XX under paragraph 128B(3)(jb) of the Income Tax Assessment Act 1936 (ITAA 1936)?
Yes. This ruling applies for the following period : Year ended 30 June 20XX The scheme commenced on: 1 July 20XX
The Old Fund is a defined benefit pension scheme established in 19XX. In the past, a number of company pension schemes were merged into the Old Fund as part of a long-term pension review. The Old Fund was sponsored by Sponsor Company. The Old Fund was restructured in 20XX. The Fund was established following an agreement with Sponsor Company. Under the restructure, the Old Fund members had # options, where one option was to switch to the New Fund which provided the same benefits as the Old Fund but with lower future increases. The New Fund (the Fund) was established by the Interim Deed dated X Month 20XX for the purposes of receiving a bulk transfer of assets from the Old Fund in respect of those members who elected to transfer to the Fund. The Fund has been providing benefits for its members since XX Month 20XX. From Month 20XX, the Fund was closed to future accrual, meaning that no new members could join and existing members could no longer build up their benefit. Plan management The Fund is governed by the Trust Deed which was made on XX Month 20XX by Sponsor Company and the Trustee. The Trust Deed was made to replace the Interim Deed dated XX Month 20XX.
Sponsor Company is the principal employer of the Fund. The Trustee administers and manages the Fund in accordance with the terms and conditions of the Trust Deed. The Fund confirmed the following: (a) The Fund is an indefinitely continuing fund during the period. (b) The Fund was established in a country other than Australia, specifically Country A. (c) The Fund was established and is maintained only to provide benefits for individuals who are not Australian residents. (d) The Fund's central management and control is carried on outside of Australia by entities none of whom are Australian residents. (e) No amount paid to the Fund can be deducted under the Income Tax Assessment Act 1997 (ITAA 1997) or ITAA 1936. (f) No tax offsets would be allowable for an amount paid to or set aside for the Fund. (g) The income of the Fund is not non-assessable non-exempt (NANE) income of the Fund because of either: i. Subdivision 880-C of the ITAA 1997, or ii. Division 880 of the Income Tax (Transitional Provisions) Act 1997. Purpose of the Fund
The Fund is an occupational defined benefit pension scheme set up under trust to provide benefits for former members of the Old Fund who elected to transfer to the Fund. The Fund is a Registered Pension Scheme under the laws of Country A during the period. The purpose of the Fund is to provide retirement benefits (pensions and lump sums) in accordance with Country A's pension legislation to former employees and other employers in Country A's XYZ Industry. Membership Members of the Fund are any person who became a member having chosen to transfer from the Old Fund and any person entitled to benefits in respect of that person. Members must have been employed in Country A's XYZ Industry for a participating employer and paid contributions to the Fund or be a dependent (spouse or child) of a deceased member. Contributions In Month 20XX the Fund was closed to future accrual, meaning that no new members could join and existing members could no longer build up their benefit. Benefits (retirement, death, disability)
Members are entitled to benefits including types, amounts, timing and manner of payment, that are identical to their entitlement to benefits under the rules of the Old Fund as at XX Month 20XX. Benefits are based on length of service and salary. Retirement pension The normal pension age is the age of 65. The pension is a monthly income for the rest of members' life. When members start taking their pension, they can usually choose to swap some of their pension for a tax-free cash lump sum, up to a maximum amount (worked out using a formula set by Country A's government. Where a member takes a lump sum, the member's pension is reduced. Retiring early The earliest that members can take their pension is age 55. If members start taking their pension between the ages of 55 and 64, their pension may be reduced for each year and month that they retire early. Retiring for incapacity In order to qualify for an incapacity retirement pension, a member must meet the following criteria: • must have permanently left all employment, being never able to work again, and
• must have done so because of "incapacity" ("incapacity" means that a member or former member is unable to carry out any gainful employment due to physical or mental incapacity and is likely to remain permanently unable to do so.) Where a member qualifies for incapacity retirement, they can start taking their pension from the date that qualification is established, no matter how old they are. Taking a small pension as a lump sum ('trivial commutation') The earliest members can take out a trivial commutation is after their 55th birthday. A member can only take out a trivial commutation if the sum of their Country A's registered pensions is equivalent to less than Country A's specified amount as a lump sum. Transferring out Members can swap their future benefits for a one-off sum of money that is transferred into a different pension arrangement. This is only an option for non-pensioners up to their normal retirement age. Death benefits If members die before normal pension age, the Fund will pay the following benefits: • a lump sum - their dependants will receive a refund of their contributions plus interest,
• spouse's pension - a pension equal to half of their full pension is payable for life and subject to the same annual pension increase as their pension, and • children's allowances (where applicable). Benefits in other circumstances (loans, early withdrawal etc) The Fund does not allow benefits in other circumstances. Central Management and Control The Trustee administers and manages the Fund in accordance with the terms and conditions of the Trust Deed. The Trustee has the power to determine the manner in which assets of the Fund are invested, as set out in the Trust Deed. The day-to-day administration of the Fund is supervised by the Trustee Board, who are directors of the Trustee. Their primary role is to make sure that benefits are paid in line with the Fund's Trust Deed and governing law. The Trustee will set general investment policy and will delegate the responsibility for day-to-day investment decisions as required by law. Wind-up and insolvency Under the Trust Deed, the Fund will be wound up and the trusts thereof will be determined when Sponsor Company orders the Fund to be wound up.
• The Sponsor Company cannot serve notice under the Trust Deed unless the 'Surplus Condition', as defined by the Trust Deed, has been satisfied. The Trustee does not have any power to defer the winding up of the Fund. During the period, the Sponsor Company, had not ordered the Fund to be wound up. Residence and Tax status The Fund is a resident of Country A in accordance with the relevant Convention in force between Country A and Australia. The Fund is exempt of tax in Country A by virtue of the relevant laws of Country A. The Fund is a registered pension scheme for tax purposes under the laws of Country A. Australian Investments The Fund's direct Australian investments include equity shares acquired on or before XX March 20XX. In respect to the Fund's direct Australian investments, the Fund: • does not hold any right to appoint a person to a board, committee or similar either directly or indirectly, • did not enter into or receive any side letters, arrangements or agreements, • does not hold any veto rights on security holder votes, and
• does not hold any other influence potentially of a kind described in subsection 128B(3CD) of the ITAA 1936. • Uses the services of an investment manager and custodian.
Income Tax Assessment Act 1936 Paragraph 128B(3)(jb) Income Tax Assessment Act 1936 Paragraph 128B(3CA) Income Tax Assessment Act 1936 Paragraph 128B(3CD) Income Tax Assessment Act 1936 Section 128D Income Tax Assessment Act 1997 Section 118-520
Section 128B of the ITAA 1936 imposes liability to withholding tax on income derived by a non-resident that consists of dividend income (subsection 128B(1) of the ITAA 1936), interest income (subsection 128B(2) of the ITAA 1936) as well as other income prescribed in that section. Subsection 128B(3) of the ITAA 1936 notes that section 128B of the ITAA 1936 will not apply to prescribed categories of income. Relevantly, paragraph 128B(3)(jb) provides an exclusion from withholding tax for interest, dividends and non-share dividends derived by a superannuation fund for foreign residents (subject to the satisfaction of certain conditions). For the exclusion to apply, the interest, dividend and/or non-share dividend income must be: • derived by a superannuation fund for foreign residents (as defined in section 118-520 of the Income Tax Assessment Act 1997 (ITAA 1997)), and • exempt from income tax in the country in which the superannuation fund for foreign residents arise. The Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019
introduced extra requirements that must be met for paragraph 128B(3)(jb) of the ITAA 1936 to apply from 1 July 2019 onwards. These extra requirements apply only to assets which were acquired after 27 March 2018 and apply to all assets regardless of when they were acquired from 1 July 2026. Subsection 128B(3CA) provides additional requirements that must be met for an entity to be entitled to receive the exemption under paragraph128B(3)(jb): (a) the superannuation fund satisfies the portfolio interest test in subsection (3CC) in relation to the entity mentioned in subsection (3CB) (the test entity ): • at the time the income was derived; and • through any 12-month period that began no earlier than 24 months before that time and ended no later than that time; and (b) the superannuation fund does not, at the time the income was derived, have influence of a kind described in subsection (3CD) in relation to the test entity; and (c) the income is not non-assessable non-exempt income of the superannuation because of: • Subdivision 880-C of the Income Tax Assessment Act 1997; or
• Division 880 of the Income Tax (Transitional Provisions) Act 1997. Each of these requirements is considered as set out below. Income is derived by a non-resident that is a superannuation fund for foreign residents The Fund is a non-resident The Fund is not a resident of Australia. Therefore, the Fund satisfies this requirement. The Fund is a superannuation fund for foreign residents Superannuation fund for foreign residents is a defined term in the ITAA 1936. Subsection 6(1) of the ITAA 1936 states: superannuation fund for foreign residents has the meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997. Subsection 995-1(1) of the ITAA 1997 sets out the following: superannuation fund for foreign residents has the meaning given by section 118-520. The term 'superannuation fund for foreign residents' is defined in section 118-520 of the ITAA 1997 as follows: 118-520 Meaning of superannuation fund for foreign residents (1) A fund is a superannuation fund for foreign residents at a time if: (a) at that time, it is: (i) an indefinitely continuing fund; and
(ii) a provident, benefit, superannuation or retirement fund; and (b) it was established in a foreign country; and (c) it was established, and is maintained at that time, only to provide benefits for individuals who are not Australian residents; and (d) at that time, its central management and control is carried on outside Australia by entities none of whom is an Australian resident. (2) However, a fund is not a superannuation fund for foreign residents if: (a) an amount paid to the fund or set aside for the fund has been or can be deducted under this Act; or (b) a *tax offset has been allowed or is allowable for such an amount. Consequently, for the Fund to be considered a superannuation fund for foreign residents for the purposes of paragraph 128B(3)(jb) of the ITAA 1936, it must be established that: • the Fund is an indefinitely continuing fund, • the Fund is a provident, benefit, superannuation or retirement fund, • the Fund was established in a foreign country,
• the Fund was established and maintained only to provide benefits for individuals who are not Australian residents, • the central management and control of the Fund is carried on outside of Australia by entities none of whom are Australian residents, • no amount paid to the Fund or set aside for the Fund has been or can be deducted under the ITAA 1997, and • no tax offsets have been allowed or would be allowable for an amount paid to the Fund or set aside for the Fund. • Each of these requirements is considered as set out below. The Fund is an indefinitely continuing fund The term 'indefinitely continuing fund' is not defined in either the ITAA 1997 or the ITAA 1936. Therefore, it should be given its ordinary meaning subject to the context in which it appears and having regard to any relevant case law authorities. The Australian Oxford Dictionary , 2004, Oxford University Press, Melbourne defines the term 'fund' as 1 a permanent stock of something ready to be drawn upon... 2 a stock of money, especially one set apart for a purpose. In Scott v. FC of T (No 2)
(1966) 14 ATD 333; (1966) 10 AITR 290 (Scott) , Windeyer J expressed the view that 'fund' in the context of 'superannuation fund' ordinarily meant 'money (or investments) set aside and invested, the surplus income therefrom being capitalised'. Windeyer J's views in Scott were cited with approval by Hill J in Walstern Pty Ltd v. Commissioner of Taxation (2003) 138 FCR 1; 2003 ATC 5076; (2003) 54 ATR 423 who stated that 'for present purposes, the point is the need for "money" or "other property" to constitute a fund'. The general view is that an indefinitely continuing fund does not have to continue forever, but rather that the governing rules should not fix an express termination date. Whilst the Fund has been restructured, it continues to operate and provide benefits for its members. Despite the provisions under the Trust Deed which would oblige the Trustee to begin to windup the Fund in the specified circumstances , there is no intention to windup the Fund during the period. Accordingly, the Fund is considered to be an "indefinitely continuing fund" under section 118-520 of the ITAA 1997 during the period. Therefore, the Fund satisfies this requirement.
The Fund is a provident, benefit, superannuation or retirement fund The phrase 'a provident, benefit, superannuation or retirement fund' under subparagraph 118-520(1)(a)(ii) is not defined in either the ITAA 1997 or the ITAA 1936. However, the phrase has been subject to judicial consideration. In Scott , the High Court examined the terms 'superannuation fund' and 'fund'. Justice Windeyer stated at ATD 351; AITR 312; ALJR 278 that: ... I have come to the conclusion that there is no essential single attribute of a superannuation fund established for the benefit of employees except that it must be a fund bona fide devoted as its sole purpose to providing for employees who are participants money benefits (or benefits having a monetary value) upon their reaching a prescribed age. In this connexion "fund", I take it, ordinarily means money (or investments) set aside and invested, the surplus income there from being capitalised. In a later case, Mahoney v. Commissioner of Taxation (Cth) (1967) 41 ALJR 232; (1967); 14 ATD 519; 10 AITR 463 (Mahoney case), the High Court took a similar view as in Scott, Justice Kitto expressed the view at ALJR 232; (1967); ATD 520; AITR 464 that:
All that need be recognised is that just as 'provident' and 'superannuation' both referred to the provision of a particular kind of benefit - in the one case a provision against contemplated contingencies, and in the other case a provision, to arise on an employee's retirement or death or other cessation of employee, of a subvention for him or his estate or persons towards whom he may have stood in some kind of relation commonly giving rise to a legal or moral responsibility - so 'benefit' must have meant a benefit, not a general sense, but characterised by some specific future purpose. The court found that the expression takes its meaning from past usage and the meaning of the several expressions must be arrived at in light of their ordinary usage. As such, the term 'benefit' requires a purpose narrower than conferring benefits in a completely general sense. The benefit must be characterised by some future purpose. Likewise, a provident fund must not refer to the provision of funds in a general sense but must relate to a provision against contemplated contingencies.
Both of the above mentioned cases emphasise that the benefits must be provided for a specific purpose and require that there is a connection between the benefit received and the provision by the fund for retirement or death of a member or against 'contemplated contingencies', such as death, disability or serious illness. Having regard to the Trust Deed, it is considered that the Fund is a 'provident, benefit, superannuation, or retirement fund' as that phrase has been interpreted by the relevant authorities. The purpose of the Fund is to provide members with retirement benefits as well as disability and death benefits. Members are eligible for a benefit upon reaching any of the following criteria: • normal retiring age of 65, • early retirement - If members start taking their pension between the ages of 55 and 64, their pension may be reduced for each year and month that they retire early, • retirement due to incapacity, • death, or • transfer into a different pension arrangement. The Fund does not provide benefits in any other circumstances.
Therefore, the Fund will satisfy this requirement. The Fund was established in a foreign country The Fund was established in Country A. Therefore, the Fund satisfies this requirement. The Fund was established and maintained only to provide benefits for individuals who are not Australian residents The Fund was established and is maintained only to provide benefits to members who were former members of the Old Fund who had elected to transfer to the Fund following the Fund's restructure. It is considered that the possibility of a very small number of members being returned residents or becoming Australian residents after ceasing eligible employment is incidental and should not be taken to conclude that the Fund, in this case, has not been established and is not maintained only to provide benefits for non-residents, based on the rules and operation of the Fund. Therefore, the Fund satisfies this requirement. The Fund's central management and control is carried on outside Australia by entities none of whom is an Australian resident Paragraphs 20 and 21 of Taxation Ruling TR 2008/9
Income tax: meaning of 'Australian superannuation fund' in subsection 295-95(2) of the Income Tax Assessment Act 1997 (TR 2008/9) states in respect of the central management and control (CM&C) of a superannuation fund: 20. The CM&C of a superannuation fund involves a focus on the who, when and where of the strategic and high level decision making processes and activities of the fund. In the context of the operations of a superannuation fund, the strategic and high level decision making processes includes: • formulating the investment strategy for the fund; • reviewing and updating or varying the fund's investment strategy as well as monitoring and reviewing the performance of the fund's investments; • if the fund has reserves - the formulation of a strategy for their prudential management; and • determining how the assets of the fund are to be used to fund member benefits.
21. The other principal areas of operation of a superannuation fund that form part of the day-to-day or operational side of the fund's activities will not constitute CM&C. These activities do not form part of the CM&C of the fund because they are not of a strategic or high level nature. Rather, these activities are of a more formalistic or administrative nature. Examples of such activities include the acceptance of contributions that are made on a regular basis, the actual investment of the fund's assets, the fulfilment of administrative duties and the preservation, payment and portability of benefits. Furthermore, paragraphs 10 and 11 of Taxation Ruling TR 2018/5 Income tax: central management and control test of residency (TR 2018/5) states: 10. Central management and control refers to the control and direction of a company's operations. It does not refer to a physical location in which the control and direction of a company is located and may ultimately be exercised in more than one location.
11. The key element in the control and direction of a company's operations is the making of high-level decisions that set the company's general policies and determine the direction of its operations and the type of transactions it will enter. The Fund is governed by the Trustee Board who are vested with authority as provided under the Trust Deed. The Trustee Board is responsible for making high-level decisions including deciding on an appropriate investment policy, determining the manner in which the Fund's assets are to be invested, supervising the administration of the Fund's assets (the work of the investment manager and proper cash-flow management) to ensure benefits are paid in accordance with the Trust Deed. In addition, any amendment to the Trust Deed is to be approved by the Trustee. None of the members of the Trustee Board are Australian residents. Based on the above, it is reasonable to conclude that the central management and control of the Fund occurs outside of Australia by entities that are not Australian residents. Therefore, the Fund satisfies this requirement.
No amount paid to the Fund or set aside for the Fund has been or can be deducted under the ITAA 1997 and no tax offset has been allowed or is allowable for such an amount Pursuant to subsection 118-520(2) of the ITAA 1997, a fund is not a superannuation fund for foreign residents if: a) an amount paid to the fund or set aside for the fund has been or can be deducted under the Act; or b) a tax offset has been allowed or is allowable for such an amount. An amount paid to the Fund or set aside for the Fund has not been and cannot be deducted under the ITAA 1997. A tax offset has not been allowed nor would be allowable for any amount paid to the Fund or set aside for the Fund. Therefore, the Fund will satisfy this requirement. Conclusion As all of the above requirements are satisfied, the Fund meets the requirements of being a superannuation fund for foreign residents as defined by section 118-520 of the ITAA 1997 for the purposes of subparagraph 128B(3)(jb)(i) of the ITAA 1936. The income consisting of dividend income is derived by the Fund
Subsection 128B(3CA) of the ITAA 1936, along with paragraph 128B(3)(jb) of the ITAA 1936 requires the superannuation fund for foreign residents to derive the interest, dividends or non-share dividends paid by Australian resident companies. The Fund invests directly into Australia (including using the services of its investment manager and custodian) and receives dividend income directly from its Australian investments. It will, therefore, derive the relevant income for the purposes of subsection 128B(3CA) of the ITAA 1936 and paragraph 128B(3)(jb) of the ITAA 1936. The Fund is exempt from income tax in the country in which the non-resident resides The Fund is exempt from taxation on the dividends paid by Australian companies in Country A by virtue of the laws of Country A. Therefore, the Fund will satisfy this requirement. Otherwise non-assessable non-exempt The income received by the Fund will not be non-assessable non-exempt income because of Subdivision 880-C of the ITAA 1997 or Division 880 of the Income Tax (Transitional Provisions) Act 1997.
Income derived by Fund would not be otherwise treated as not assessable and not exempt income by virtue of the above provisions. Accordingly, the above exclusion should not apply to exclude the Fund from entitlement to the withholding tax exemption for superannuation funds for foreign residents. The Fund satisfies the 'portfolio interest test' Subsection 128B(3CC) of the ITAA 1936 states: A superannuation fund satisfies the portfolio interest test in this subsection in relation to the test entity at a time if, at that time, the total participation interest (within the meaning of the Income Tax Assessment Act 1997 ) the superannuation fund holds in the test entity: (a) is less than 10%; and (b) would be less than 10% if, in working out the direct participation interest (within the meaning of that Act) that any entity holds in a company: (i) an equity holder were treated as a shareholder; and (ii) the total amount contributed to the company in respect of non-share equity interests were included in the total paid-up share capital of the company.
Subsection 128B(3CB) defines the test entity to be either the entity that paid the interest, dividends or non-share dividends or, if subsection 128A(3) of the ITAA 1936 applies in relation to a resident trust estate, that trust estate. Subsection 995-1(1) of the ITAA 1997 defines total participation interest to have the meaning given by section 960-180 of the ITAA 1997, which states: An entity's total participation interest at a particular time in another entity is the sum of: (a) the entity's *direct participation interest in the other entity at that time; and (b) the entity's *indirect participation interest in the other entity at that time. A 'direct participation interest' that the Fund will have in a test entity is defined in the table in subsection 960-190(1) of ITAA 1997 and depends on what type of entity the other entity is. Item 1 of the table in subsection 960-190(1) and subsection 960-190(2) of the ITAA 1997 provide that a direct participation interest in a company is the 'direct control interest' (within the meaning of section 350 of the ITAA 1936 excluding the operation of subsections 350(6) and (7)) that the first entity holds in the other entity.
Subsection 350(1) of the ITAA 1936 provides that an entity holds a direct control interest in a company at a particular time equal to the percentage of: (a) total paid up share capital (b) voting rights, or (c) rights to distributions of capital or profits that it holds in the company. Where there are different percentages in each of the above, the direct control interest is the greater or greatest of those percentages. Subsection 350(2) of the ITAA 1936 provides that where an entity holds different percentages of total rights to vote for the purposes of (b) above, the highest of those percentages applies in establishing the direct control interest. Subsection 960-185(1) of the ITAA 1997 provides that an entity's indirect participation interest in a test entity is established by multiplying its direct participation interest in an intermediate entity by the sum of the intermediate entity's direct and indirect participation interests in the test entity. As per the facts, the Fund does not hold more than 10% of the total participation of any of the Australian entities it has invested in.
The Australian investment of the Fund comprises of equity shares where the dividend income was paid by Australian companies. The total value of the Australian investment portfolio demonstrates that the Fund does not hold more than 10% of the total participation interest in its investment. In these circumstances, the Commissioner is satisfied that the total participation interest the Fund holds: • is less than 10% pursuant to paragraph 128B(3CC)(a) of the ITAA 1936 at all relevant times; and • would be less than 10% in the circumstances detailed in paragraph 128B(3CC)(b) of the ITAA 1936 at all relevant times. The Fund therefore satisfies the 'portfolio interest test' in respect of its Australian Investments listed in the relevant facts and circumstances of this Ruling. The Fund does not have influence of a kind described in subsection 128B(3CD) of the ITAA 1936 in relation to the test entity at the time the income was derived Subsection 128B(3CD) of the ITAA 1936 states:
A superannuation fund has influence of a kind described in this subsection in relation to the test entity at a time if any of the following requirements are satisfied at that time: (a) the superannuation fund: (i) is directly or indirectly able to determine; or (ii) in acting in concert with others, is directly or indirectly able to determine; the identity of at least one of the persons who, individually or together with others, make (or might reasonably be expected to make) the decisions that comprise the control and direction of the test entity's operations; (b) at least one of those persons is accustomed or obliged to act, or might reasonably be expected to act, in accordance with the directions, instructions or wishes of the superannuation fund (whether those directions, instructions or wishes are expressed directly or indirectly, or through the superannuation fund acting in concert with others). As such, there are two distinct sub-tests within the influence test.
Sub-test 1 of the influence test, as contained in paragraph 128B(3CD)(a) of the ITAA 1936, assesses whether the Fund is able to determine the identity of at least one of the persons who, individually or together with others, makes or is reasonably expected to make, decisions comprising the control and direction of the test entity's operations. This includes situations where the Fund is able to act in concert with others to determine the identity of a relevant decision-maker in the test entity. Sub-test 1 also extends to situations where the Fund, in its own right, holds the ability to approve or veto decisions which go to the control or direction of the test entity. The Fund does not have the ability to appoint a person such as a director or a member of an advisory or investment committee either on its own or by pooling its interests with other investors, nor to veto such decisions.
Sub-test 2 of the influence test, as contained in paragraph 128B(3CD)(b) of the ITAA 1936, assesses whether at least one of the relevant decision-making persons of the test entity is accustomed or obliged to act, or might reasonably be expected to act, in accordance with the directions, instructions or wishes of the Fund. The Fund has no side letters or similar arrangement which provide the Fund with influence over the direction of the test entity. Relevantly, in respect of the investments listed in the relevant facts and circumstances of this Ruling: • Neither the Fund, nor any related party, is involved in the day to day management of the business of any of the Australian companies. • Neither the Fund, nor any related party, has the right to appoint a director to the Board of Directors of the Australian company. • Neither the Fund, nor any related party, holds the right to representation on any investor representative or advisory committee (or similar) of the Australian companies.
• Neither the Fund, nor any related party, has the ability to direct or influence the operation of the Australian companies outside of the ordinary rights conferred by the equity interest held. • The Fund has not entered into or received any side letters, arrangements or agreements. • The Fund only holds rights to vote in proportion to its equity interest in each of the Australian companies. Accordingly, the Fund does not have influence of a kind described in subsection 128B(3CD) of the ITAA 1936 in respect of its Australian investments. the Fund does not have capacity to influence (either directly or indirectly) the day-to-day management of the operations of their investments. Consequently, the Commissioner accepts that the Fund does not have influence of a kind described in subsection 128B(3CD) of the ITAA 1936. The income received by the Fund is not non-assessable and non-exempt income of the Fund because of Subdivision 880-C of the ITAA 1997 or Division 880 of the Income Tax (Transitional Provisions) Act 1997
The income received by the Fund will not be non-assessable non-exempt income because of Subdivision 880-C of the ITAA 1997 or Division 880 of the Income Tax (Transitional Provisions) Act 1997 . The Fund therefore satisfies this condition in respect of its current investments listed in the relevant facts and circumstances of this Ruling. Conclusion As the Fund has met both the pre-existing and extra requirements under paragraph 128B(3)(jb) of the ITAA 1936 in relation to assets it acquired on or before XX March 20XX, it will be excluded from withholding tax in relation to interest, dividend and non-share dividend income received in respect of those assets.