Payroll Tax Act 2007
77Indirect interest
Start here
Get a plain-English read of 77
Turn the raw legal text into a practical explanation grounded in Payroll Tax Act 2007.
77 Indirect interest
77 Indirect interest
(1) An entity has an indirect interest in a corporation if the corporation is linked to another corporation (the directly controlled corporation) in which the entity has a direct interest.
(2) A corporation is linked to a directly controlled corporation if the corporation is part of a chain of corporations—
(a) that starts with the directly controlled corporation, and
(b) in which a link in the chain is formed if a corporation has a direct interest in the next corporation in the chain.
(3) The following are examples of how subsections (1) and (2) work (the examples are cumulative)—
(a) corporation A (a directly controlled corporation) has a direct interest in corporation B. Corporations A and B form part of a chain of corporations, and corporation B is linked to corporation A. Accordingly, an entity that has a direct interest in corporation A also has an indirect interest in corporation B,
(b) corporation B also has a direct interest in corporation C. In this case, corporations A, B and C form part of a chain of corporations. Both corporations B and C are linked to corporation A. The entity that has a direct interest in corporation A has an indirect interest in both corporations B and C,
(c) corporation B also has a direct interest in corporation D. There are now 2 chains of corporations, one consisting of A, B and C, and one consisting of A, B and D. Corporations B, C and D are all linked to corporation A and an entity that has a direct interest in corporation A would have an indirect interest in corporations B, C and D. An entity that has a direct interest in corporation B would have an indirect interest in corporations C and D. However, an entity that has a direct interest in corporation C only would not have an indirect interest in corporation D, as corporation D is not linked to corporation C.
(4) The value of the indirect interest of an entity in a corporation (an indirectly controlled corporation) that is linked to a directly controlled corporation is calculated by multiplying together the following—
(a) the value of the direct interest of the entity in the directly controlled corporation,
(b) the value of each direct interest that forms a link in the chain of corporations by which the indirectly controlled corporation is linked to the directly controlled corporation.