Guide to completing Schedule 25A

Item 1 example 1

An Australian manufacturing and holding company has three subsidiaries located in Thailand, Singapore and Indonesia. The following international business activities occurred during the year:

• The Thai subsidiary manufactured household appliances that were purchased by the Australian parent company for wholesale distribution. The value of these purchases was $50,000.
• The Singapore subsidiary manufactured electrical components for distribution in Australia and South-East Asia. During the year, the Australian parent company purchased finished components for re-sale and also carried out product design projects on behalf of this subsidiary. The value of the products purchased was $900,000 and the value of the design work carried out by the Australian parent company was $40,000.
• Dealings that the Australian parent company had with the Indonesian subsidiary consisted only of a loan to that subsidiary and the receipt of interest on the loan. The value of the loan was $250,000 and $25,000 interest was received. The loan was to enable the Indonesian subsidiary to undertake market research in Indonesia.

Select the code for the Australian parent company's underlying international businesses as follows:

• Thailand (location code THA): household appliance wholesaling - that is, purchase of finished goods from its subsidiary for wholesale distribution - industry code 34940.
• Singapore (location code SGP): product design services - industry code 69230. Purchase of finished goods from its subsidiary for resale - industry code 34940.
• Indonesia (location code IDN): in this instance the business activity giving rise to, or underlying, the loan was market research and the most appropriate industry code is market research service - industry code 69500.

The Australian parent company completes item 1 as follows:

A	34940	B	950,000	C	SGP	D	THA	E
F	69230	G	40,000	H	SGP	I		J
K	69500	L	25,000	M	IDN	N		O

The company writes the interest amount at L. The loan is not included in the total value for this industry code.

As there is no other market research activity with international related parties, the interest is the only amount written at this label.

Sections within Examples for completing Schedule 25A

• Item 1 example 1
• Item 1 example 2
• Item 1 example 3
• Item 2e example
• Item 3a example
• Item 3b example
• Item 9 example
• Item 14 example
• Item 19 example
• Transfer pricing case study
• Strict control test example
• Assumed controller test example
• Attributable income example
• Active income test example 1
• Active income test example 2
• Active income test example 3
• Subdivision 768-G of ITAA 1997 example
• Attribution percentage example
• Notional accounting period example
• Change of residence to Australia example
• Change of residence to a listed country example