Taxes Consolidation Act 1997 section 835AA

Associated enterprises

Section 835AA defines the term "associated enterprises" for the purposes of the anti-hybrid rules in Part 35C and sets out seven tests for determining whether two enterprises are associated.

• Defines key terms including consolidated group for financial accounting purposes, non-consolidating entity, parent entity, and significant influence in management.
• Sets out seven tests for association based on share capital or ownership rights, voting power, profit entitlement, common association with a third enterprise, consolidated group membership (actual or hypothetical), and significant influence in management.
• Provides that where enterprises act together or use nominees, their rights are aggregated for the purposes of the ownership, voting power, and profit entitlement tests.
• Increases the 25 per cent threshold to 50 per cent for certain anti-hybrid provisions, including the double deduction, permanent establishment, imported mismatch, and hybrid entity rules.