Coronavirus (COVID-19) updates from the Australian Government

Tax Integrity - Clarifying the Operation of the Hybrid Mismatch Rules


In the 2019-20 Budget, the Government announced the measure Tax Integrity – clarifying the operation of the hybrid mismatch rules. This measure will make a number of technical amendments to Australia’s hybrid mismatch rules to clarify their operation. 

The proposed amendments will:

  • stipulate how the rules apply to multiple entry consolidated (MEC) groups and trusts;
  • limit the meaning of foreign tax; and
  • specify that the integrity rule can apply where other provisions have applied.

The amendments will apply to income years commencing on or after 1 January 2019, with the exception of amendments to the integrity rule, which will apply to income years commencing on or after 2 April 2019.

The relevant measure description can be found in Budget Paper 2.

To further assist taxpayers in planning their affairs, Treasury sets out below the policy principles that will be used in developing the relevant amendments.

This is a statement of policy intent only. Exposure draft legislation for the measure will be released as soon as practicable.  


The hybrid mismatch rules, which generally apply to income years commencing on or after 1 January 2019, prevent entities that are liable to income tax in Australia from being able to avoid income tax, or obtain a double non-taxation benefit, by exploiting differences between the tax treatment of entities and instruments across different countries.  These amendments will clarify the operation of certain elements of the rules.

Further details

Application of the hybrid mismatch rules to MEC groups

This proposed amendment will clarify that the hybrid mismatch rules apply to members of MEC groups in the same way as they apply to members of consolidated groups.

Application of the hybrid mismatch rules to trusts

The definition of a liable entity is used throughout the hybrid mismatch rules to broadly determine whether an entity is considered to be a taxpayer or simply a flow-through entity in a particular jurisdiction.

However, under this definition, there is some uncertainty as to when a trust that applies Australian tax laws is a liable entity in Australia for these purposes. This proposed amendment will clarify that a trust will not be a liable entity in Australia if it is treated as a flow-through entity for Australian tax purposes. Such a trust may still be treated as a liable entity in a foreign country under  the foreign country’s laws. Trusts such as public trading trusts, complying superannuation entities, and trusts that have income to which beneficiaries are not presently entitled will be treated as liable entities in Australia.

While a flow-through trust will not be a liable entity in Australia for the purpose of the hybrid mismatch rules, the beneficiaries of the trust may be considered to be liable entities. In such circumstances any hybrid mismatch outcomes reflected in the calculation of the trust’s net income may be neutralised at the beneficiary level.

Limiting the meaning of foreign tax

This proposed amendment will clarify that only foreign income tax imposed at a national level is relevant in applying the hybrid mismatch rules. Foreign state or local taxes will be disregarded.

Application of the integrity rule

There are number of provisions (hybrid financial instruments mismatch, hybrid payer mismatch, reverse hybrid mismatch, branch hybrid mismatch, deducting hybrid mismatch, and imported hybrid mismatch) in the hybrid mismatch rules which may operate to neutralise a double non-taxation benefit arising for a hybrid mismatch arrangement. The integrity rule prevents these provisions from being compromised in some circumstances.

The hybrid mismatch rules contain ordering rules which prevent later provisions from applying once an earlier provision has applied. While the ordering rules generally operate appropriately, they can in some circumstances prevent the application of the integrity rule to inbound financing arrangements that have been designed to circumvent the operation of the hybrid mismatch rules.

For example an arrangement may give rise to both:

  • a double deduction outcome which would be subject to the deducting hybrid mismatch rules; and
  • an effective replication of a deduction/non-inclusion outcome by the interposition of a foreign entity located in a no or low tax jurisdiction which the integrity rule was designed to address.

In this situation, if the double deduction outcome triggers the deducting hybrid mismatch rules, the ordering rules currently prevent the integrity rule from applying to neutralise the replicated deduction/non-inclusion outcome, where the entitlement to a deduction in Australia has survived (e.g. because Australia is the secondary response country or the deduction has been sheltered by dual inclusion income).

The proposed amendment will ensure that the integrity rule can apply in these circumstances.

友情链接:思思福利导航|日本电影100禁在线看|一本道AV免费高清无码  天天射综合网|天天鲁在视频在线观看|天天鲁啊鲁在线看  a片毛片免费观看|免费在线观看的黄片|夫妻性生活影片|国产一级片  爱人的欲望-夫妻性生活影片-琪琪色影院-久草网  欧美群交-美国十次-美国十次啦网站--欧美群交  天天鲁啊鲁在线看|天天射综合网|天天鲁在视频在线观看  宅男在线电影|宅男福利社|宅男福利视频|宅男影院  黄色你懂的  丝袜美腿的成人小说|亚洲香蕉视频在线播放|电影在线观看性v天堂  免费韩国成人影片-大香蕉在线影院-韩国三级片大全在线观看-韩国三级片  米奇电影网|米奇影视|米奇网站  亚洲图片自偷自拍另类|色综合亚洲欧美图片区|亚洲ts贴图  极速一本道在线看|一本道在线a片观看|一本道在线久久综合久dvd  97资源|超碰97资源站|97资源站在线视频|97资源中文字幕  不卡的无码高清的av|日本AV不卡在线观看|不卡的av日本影片在线  大香焦依人在线|逼里香|国内自拍在在钱  丁香五月啪啪-丁香五月婷婷-丁香五月综合缴情综合  韩国三级片大全在线观看|韩国三级电影网站|免费韩国成人影片  宅男爱福利视频|宅男爱福利|宅男爱福利视频大全  国产亚洲Av在线|亚洲色吧|欧美色吧|欧美av|欧美A片  欧洲大香蕉|在线观看视频在线|很很鲁在线视频播放  国产亚洲Av在线|一级黄色录像影片|夫妻性生活影片  性吧|性爱电影|性生活图片|性8最新地址  日本一本道不卡av中文-一本道av无码-日本一本道在线专区观看  香港经典三级|免费在线观看的黄片|a片毛片免费观看|夫妻性生活影片  777米奇影院|米奇影视|米奇网|米奇第四色|米奇影视盒|米奇电影网  亚洲日本VA|久久爱|久久爱在线|久久成人视频|久久爱在线播放视频  免费韩国成人影片|韩国三级片|韩国三级片大全在线观看  韩国三级电影网站|免费韩国成人影片|韩国三级片大全在线观看  久久热|天天啪久久热全部视频|久久热最新地址获取