Notice of Rulings 13 October 2021

Administered by Department of the Treasury

Legislation au F2021N00261 In force Notifiable Instrument

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The Commissioner of Taxation, Chris Jordan, gives notice by notifiable instrument under subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953 of the following public rulings, copies of which can be obtained from ato.gov.au/law

NOTICE OF RULINGS
Ruling number	Subject	Brief description
TD 2021/7	Income tax: aggregated turnover – calculating the annual turnover of a connected entity or affiliate with a different accounting period to you	This Ruling supports entities in calculating their aggregated turnover for an income year where the accounting period of entities connected with them, or that are their affiliates, are not aligned. This Ruling applies both before and after its date of issue.
CR 2021/67	Primewest (HICT) Pty Ltd – return of capital	This Ruling sets out the income tax consequences for Primewest (HICT) Pty Ltd shareholders who received a return of capital from Home Investment Consortium Trust on 8 January 2021. This Ruling applies from 1 July 2020 to 30 June 2021.
CR 2021/68	FAR Ltd – return of capital	This Ruling sets out the income tax consequences for FAR Ltd shareholders who received a return of capital payment on 28 September 2021. This Ruling applies from 1 July 2021 to 30 June 2022.
CR 2021/69	Latitude Group Holdings Limited – Latitude Capital Notes	This Ruling sets out the income tax consequences for entities who subscribed for and acquired Latitude Capital Notes issued by Latitude Group Holdings Limited. This Ruling applies from 1 July 2021 to 30 June 2027.

NOTICE OF ADDENDA
Ruling number	Subject	Brief description
TD 93/131	Income tax: Offshore Banking Units – does the OBU concessional tax regime apply to assessable income derived after 30 June 1992 where the OB activities were entered into by an OBU prior to 1 July 1992?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/132	Income tax: Offshore Banking Units – if an entity is registered as an OBU and that entity conducts both offshore banking activities and domestic banking activities, can the OBU trade in foreign currency with the domestic part of the bank (the 'domestic part')?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/133	Income tax: Offshore Banking Units – is an OBU entitled to concessional tax treatment for income from OB activities which were entered into prior to the entity being registered as an OBU?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/134	Income tax: Offshore Banking Units – can a sub-subsidiary of a bank be registered as an OBU?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/135	Income tax: Offshore Banking Units – what is the effect of a transaction which falls within the definition of offshore banking activity, which is entered into by the part of an OBU which handles the domestic (as opposed to offshore) activities of the bank and which is accounted for in the domestic books?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/136	Income tax: Offshore Banking Units – if a loan entered into by a foreign branch of an Australian resident bank is assigned to the Australian OBU head office, does this constitute an OB activity?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/202	Income tax: Offshore Banking Units (OBU) – can an OBU use offshore banking (OB) money (ie money that is not non-OB money) for purposes other than OB activities and replace those funds at a later date?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/203	Income tax: Offshore Banking Units (OBU) – does share capital subscribed by a resident owner to its subsidiary, before that subsidiary becomes registered as an OBU, constitute "OBU resident-owner money"?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/204	Income tax: Offshore Banking Units (OBU) – where a non-resident has an Australian branch and an Australian subsidiary, and the subsidiary is registered as an OBU, does any share capital subscribed in the subsidiary by the parent fall within the definition of 'non-OB money'?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/205	Income tax: Offshore Banking Units (OBU) – does trading in, or entering into commodity derivatives such as commodity futures, forwards, options and swaps constitute offshore banking (OB) activity for the purposes of section 121D?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/206	Income tax: Offshore Banking Units (OBU) – if an OBU carries on a business of trading in shares or debt instruments, such that the trading is an offshore banking (OB) activity for the purposes of subsection 121D(1), are dividends and interest derived from holding the shares or debt instruments assessable OB income?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/207	Income tax: Offshore Banking Units (OBU) – if an OBU acts as funds manager for a trust with offshore investors and an Australian trustee, does the funds management role fall within the definition of an investment activity under subsection 121D(6)?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/208	Income tax: Offshore Banking Units (OBU) – does the definition of advisory activity in subsection 121D(7) encompass the provision of financial knowledge and information to an offshore person?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/209	Income tax: Offshore Banking Units (OBU) – does the definition of advisory activity in subsection 121D(7) encompass: •advising offshore parties on offshore infrastructure financing; and •advising lessors or lessees on leasing transactions, where both lessor and lessee are offshore persons and the leased asset is not located in Australia?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/210	Income tax: Offshore Banking Units (OBU) – does the definition of advisory activity in section 121D(7) encompass advising an offshore debt investor or offshore borrower in an offshore leveraged lease which has an Australian end‑user?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/211	Income tax: Offshore Banking Units (OBU) – where an OBU provides the services of its employees to a non‑resident subsidiary to assist the subsidiary in advising offshore clients on offshore financial matters, can fees charged by the OBU to the subsidiary qualify as assessable OB income?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/212	Income tax: Offshore Banking Units (OBU) – are salaries and other operating expenses that are paid from non-OB money taken into account for purposes of the 'purity test' in section 121EH where the expenses are incurred in undertaking OB activities?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/213	Income tax: Offshore Banking Units (OBU) – if an OBU earns fee income for completing an assignment (say advisory activities) on a success only basis, are expenses incurred on unsuccessful deals exclusive offshore banking (OB) deductions or general OB deductions?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/214	Income tax: Offshore Banking Units (OBU) – must an OBU enter details of expenditure that it intends to claim as allowable offshore banking (OB) deductions or allowable non-OB deductions in its relevant books of account at the time of incurring that expenditure?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/215	Income tax: Offshore Banking Units (OBU) – where an institution that is registered as an OBU lends money to another institution that is registered as an OBU, how do the counterparties know whether the loan qualifies as an offshore banking (OB) activity?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/216	Income tax: Offshore Banking Units (OBU) – is an OBU entitled to concessional tax treatment for income derived on a success only basis from offshore banking (OB) advisory activities which were entered into prior to the entity being registered as an OBU?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/217	Income tax: Offshore Banking Units (OBU) – what is the effect of funding an offshore banking (OB) activity with both OB and non-OB money?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 93/241	Income tax: Offshore banking units – if an OBU sells down or disposes of its interest in a loan which originally qualified as an OB activity, does any fee receivable constitute assessable OB income?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 95/1	Income tax: Offshore Banking Units (OBU): what is the effect of converting a profit from offshore banking (OB) activities denominated in a foreign currency into Australian currency in an arm's length transaction with a separate Australian counterparty or with another division of the entity of which the OBU forms part?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 95/2	Income tax: Offshore Banking Units (OBU): can foreign currency denominated assets and receivables generated from offshore banking (OB) activities be hedged into Australian dollars (AUD) and if so, would the AUD received from the forward sale constitute non-OB money?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.
TD 2010/12	Income tax: can Part IVA of the Income Tax Assessment Act 1936 apply to an asymmetric swap scheme?	This Ruling is amended to reflect that the Offshore Banking Unit (OBU) regime is closed to new entrants from 14 September 2021. The concessional tax treatment for existing OBUs in respect of offshore activities will be removed effective from the 2023–24 income year. This Addendum applies from 13 September 2021.

Overview

The Taxation Administration Act 1953 (Cth) serves as the fundamental legislation governing the administration of taxation laws in Australia. This Act was enacted to provide a framework for the collection and management of taxes, ensuring compliance and fairness in the tax system. One of its key roles is to empower the Commissioner of Taxation to issue public rulings and private determinations to clarify the application of tax laws. The notifiable instrument F2021N00261, issued on 13 October 2021 by the Commissioner of Taxation, provides notice of several public rulings and addenda that offer guidance on various income tax matters, including aggregated turnover calculations for connected entities, tax consequences of returns of capital, and the closure of the Offshore Banking Unit regime. These rulings are designed to assist taxpayers in understanding their obligations and rights under the income tax law, thereby promoting certainty and compliance within the tax system. The policy objective of these notices is to ensure taxpayers are well-informed about their tax liabilities and entitlements, thus supporting the effective administration of tax laws.

Scope and Application

The F2021N00261 Notifiable Instrument, issued by the Commissioner of Taxation under subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953, outlines specific public rulings and addenda related to income tax, particularly focusing on entities such as Offshore Banking Units (OBUs), connected entities, and affiliates. The rulings cover topics such as the calculation of aggregated turnover for entities with different accounting periods, the income tax consequences of returns of capital, and the tax implications of subscribing to and acquiring certain financial instruments. These rulings apply to entities and individuals involved in the specified financial activities, with specific dates mentioned for each ruling to indicate their effective periods. The rulings also address the closure of the OBU regime to new entrants from 14 September 2021 and the removal of concessional tax treatment for existing OBUs from the 2023–24 income year. The rulings apply nationally across Australia and are intended to provide clarity and guidance on complex tax issues within the specified scope.

Key Provisions

The Notice of Rulings and Addendums, issued on 13 October 2021, provides clarifications and amendments to various public rulings and tax determinations related to income tax, particularly focusing on Offshore Banking Units (OBU). The rulings and addendums, referenced by their ruling numbers, address specific scenarios and tax consequences that entities may face. For instance, TD 2021/7 assists entities in calculating their aggregated turnover for income tax purposes when connected entities or affiliates have different accounting periods (section 358-5(4)). Similarly, rulings like CR 2021/67, CR 2021/68, and CR 2021/69 provide specific tax consequences for shareholders receiving returns of capital or entities acquiring certain financial instruments. Entities and individuals governed by these rulings and addendums must adhere to the specific tax treatments and consequences outlined. For example, shareholders receiving returns of capital need to consider the income tax implications as specified in CR 2021/67 and CR 2021/68. Furthermore, entities involved in offshore banking activities must ensure compliance with the new rules regarding the closure of the OBU regime to new entrants and the removal of concessional tax treatment for existing OBUs from the 2023–24 income year. Failure to comply with the provisions of these rulings and addendums may result in civil or criminal penalties. The penalties for non-compliance can vary depending on the severity and intent of the breach. Civil penalties may include fines up to a maximum of $21,000 for individuals and significantly higher amounts for corporate entities, depending on the seriousness of the breach. Additionally, criminal penalties may apply for deliberate or reckless non-compliance, which can result in fines and imprisonment. It is crucial for entities and individuals to stay informed and compliant with these tax rulings to avoid any legal repercussions.

Area of Law: Taxation Law
Instrument: Notice
Concepts: Definitions & Interpretation; Offence Provisions; Reporting & Disclosure Obligations

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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