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7.4.1. Consolidated Corporate Groups

A loss incurred by a company that becomes a member of a consolidated group may generally be transferred to the head company in accordance with the group consolidation rules (see Sec. 5.3. above). However, that is subject to the application of an "available fraction" principle, which restricts the use of the loss in a manner intended to ensure that the effective rate at which the loss is used by the group is not significantly different from what the loss company could have utilized by itself without joining the group. Apart from this, the tax law also permits losses to be transferred between the Australian branch of a foreign bank and other foreign financial entities.