Payroll Tax Act 2008
77Indirect interest
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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;