Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) There is an adjustment under this section for an entity in an income year (the adjustment year ) if:
(a) in an earlier income year, all or part of a deduction of the entity in respect of an amount that gave rise to a * deducting hybrid mismatch was not allowable under section 832 - 530; and
(b) an amount of * dual inclusion income is:
(i) available to be applied by the * deducting hybrid in the adjustment year; and
(ii) * subject to Australian income tax for the purposes of subsection 832 - 680(1) in the adjustment year; and
(iii) * subject to foreign income tax for the purposes of subsection 832 - 680(1) in the foreign country in which the * foreign income tax deduction arose.
(2) So much of the amount of * dual inclusion income that satisfies paragraph (1)(b) as does not exceed the amount that was not allowable as a deduction is an amount the entity can deduct in the adjustment year.
(2A) Subsection (2) does not apply if:
(a) the amount that was not allowable as a deduction under section 832 - 530 relates to a payment; and
(b) on the assumption that subsection 832 - 530(2) were disregarded, no amount would have been allowable as a deduction in respect of the payment because of subsection 832 - 725(3).
(3) For the purposes of a later application of this section, treat the amount that was not allowable as a deduction under section 832 - 530 as being reduced by the amount deducted under subsection (2) of this section.