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  • IRPD share-based employment remuneration

    Table 12: IRPD share-based employment remuneration

    Code

    Description of transaction category

    SBER

    Share-based employment remuneration

    Any IRPD in the nature of providing or obtaining share-based employment remuneration.

    1. What is the transaction category?

    Select the transaction category for the IRPD transaction.

    (LCMSF32)

    1. Is this transaction part of a RAS?

    If this transaction is covered by an IRPD agreement in a RAS, indicate True.

    Otherwise indicate False.

    (LCMSF33)

    1. How many transactions are part of the RAS?

    If the transaction is part of a RAS, indicate the applicable range for the number of the transactions in the same RAS that were current during the income year:

    • Low (1–5)
    • Moderate (6–50)
    • High (51 or more)

    (LCMSF35)

    1. ABN or TFN of the Australian counterparty to the transaction/RAS

    Show the ABN or TFN of the Australian counterparty (which may be the reporting entity itself) to the transaction/RAS.

    (LCMSF83 and LCMSF84)

    1. Name of the IRP non-resident counterparty to the transaction/RAS

    Show the full name of the IRP non-resident counterparty to this transaction/RAS.

    The full name to be shown is the complete name of the IRP non-resident counterparty entity. While this would be expected to usually correspond with the name of the relevant party in any associated written agreement documentation, the full correct name of the entity should be shown at Part A even if this is not exactly the same as the name used in any associated written agreement documentation.

    (LCMSF37)

    1. Tax residency of the IRP non-resident counterparty to the transaction/RAS

    Show the country codeExternal Link for the country of tax residence of the IRP non-resident counterparty to this transaction/RAS.

    (LCMSF38)

    1. Amount of consideration paid (of a capital nature for income tax purposes) for the transaction/RAS

    If an amount of a capital nature was paid by the reporting entity in connection with this transaction/RAS during the income year, show this amount based on the reporting entity’s income tax records.

    If no amount of a capital nature was paid by the reporting entity in connection with this transaction/RAS during the income year, show zero.

    (LCMSF39)

    1. Amount of consideration received (of a capital nature for income tax purposes) for the transaction/RAS

    If an amount of a capital nature was received by the reporting entity in connection with this transaction/RAS during the income year, show this amount based on the reporting entity’s income tax records.

    If no amount of a capital nature was received by the reporting entity in connection with this transaction/RAS during the income year, show zero.

    (LCMSF40)

    1. Was non-monetary consideration provided (of a capital nature for income tax purposes) for the transaction/RAS?

    If non-monetary consideration of a capital nature was provided by the reporting entity in connection with this transaction/RAS during the income year, indicate True.

    Otherwise indicate False.

    (LCMSF85)

    1. Was non-monetary consideration obtained (of a capital nature for income tax purposes) for the transaction/RAS?

    If non-monetary consideration of a capital nature was obtained by the reporting entity in connection with this transaction/RAS during the income year, indicate True.

    Otherwise indicate False.

    (LCMSF86)

    1. Amount of expenditure (not of a capital nature for income tax purposes) for the transaction/RAS

    Show the amount of expenditure not of a capital nature deducted for income tax purposes in connection with this transaction/RAS during the income year based on the reporting entity’s income tax records, including any recharge amounts payable in respect of share-based remuneration provided to the reporting entity's employees by the IRP.

    If there was no amount of expenditure not of a capital nature in connection with this transaction/RAS during the income year, show zero.

    (LCMSF41)

    1. Amount of revenue (not of a capital nature for income tax purposes) for the transaction/RAS

    Show the amount of revenue not of a capital nature returned for income tax purposes in connection with this transaction/RAS during the income year based on the reporting entity’s income tax records, including any recharge amounts receivable in respect of share-based remuneration provided to employees of the IRP.

    If there was no amount of revenue not of a capital nature in connection with this transaction/RAS during the income year, show zero.

    (LCMSF42)

    1. Was non-monetary consideration provided (not of a capital nature for income tax purposes) for the transaction/RAS?

    If non-monetary consideration not of a capital nature for income tax purposes was provided by the reporting entity in connection with this transaction/RAS during the income year, indicate True.

    Otherwise indicate False.

    (LCMSF44)

    1. Was non-monetary consideration obtained (not of a capital nature for income tax purposes) for the transaction/RAS?

    If non-monetary consideration not of a capital nature was obtained by the reporting entity in connection with this transaction/RAS during the income year, indicate True.

    Otherwise indicate False.

    (LCMSF45)

    1. Amount of foreign exchange losses deducted for the transaction/RAS

    Show the amount of foreign exchange losses deducted for income tax purposes by the reporting entity in connection with this transaction/RAS under Division 775 of the ITAA 1997 or, if applicable, the taxation of financial arrangements (TOFA) provisions in Division 230 of the ITAA 1997 for the income year.

    For more information about the circumstances in which foreign exchange gains are assessable and foreign exchange losses are deductible for Australian income tax purposes, refer to Appendix 3.

    If there was no foreign exchange loss deducted for income tax purposes in connection with this transaction/RAS for the income year, show zero.

    (LCMSF87)

    1. Amount of foreign exchange gains returned for the transaction/RAS

    Show the amount of foreign exchange gains assessable for income tax purposes in connection with this transaction/RAS under Division 775 of the ITAA 1997 or, if applicable, the taxation of financial arrangements (TOFA) provisions in Division 230 of the ITAA 1997 for the income year.

    For more information about the circumstances in which foreign exchange gains are assessable and foreign exchange losses are deductible for Australian income tax purposes, refer to Appendix 3.

    If there was no foreign exchange gain assessable for income tax purposes in connection with this transaction/RAS, show zero for the income year.

    (LCMSF43)

    1. What transfer pricing / capital asset pricing methodology has been applied to this transaction/RAS?

    If the reporting entity does not know which transfer pricing methodology has been applied to this transaction/RAS, select the code UNKT (Unknown TP Method).

    If the reporting entity does not know which capital asset pricing methodology has been applied to this transaction/RAS, select the code UNKC (Unknown CAP Method).

    (LCMSF46)

    1. What level of transfer pricing documentation has been prepared for this transaction/RAS?

    The level of transfer pricing documentation refers to the aggregate dollar amount of this transaction/RAS for which the reporting entity has prepared relevant transfer pricing documentation, expressed as a percentage of total dollar value of this transaction/RAS.

    1 = 0%

    2 = 1% to less than 25%

    3 = 25% to less than 50%

    4 = 50% to less than 75%

    5 = 75% to less than 100%

    6 = 100%

    If this transaction/RAS meets the conditions for one of the following Simplified Transfer Pricing Record Keeping (STPRK) options, outlined in PCG 2017/2 Simplified Transfer Pricing Record Keeping Options, show the codes for the STPRK option applied to the transaction/RAS:

    7 = STPRK (Materiality)

    8 = STPRK (Small Business)

    9 = STPRK (Distributors)

    (LCMSF47)

    1. If the reporting entity is a bank and this transaction is in a RAS, has the special short term tenor rule for ordinary borrowings and ordinary loans been applied to this RAS?

    Always indicate False if the transaction category is not ordinary borrowings or ordinary loans.

    (LCMSF88)

    1. If the reporting entity is a bank and this transaction is in a RAS, has the special short term tenor rule for short term derivatives been applied to this RAS?

    Always indicate False if the transaction category is not derivatives.

    (LCMSF128)

    1. If the reporting entity is a bank and this transaction is in a RAS, has the special rule for FX derivatives been applied to this RAS?

    Always indicate False if the transaction category is not derivatives.

    (LCMSF129)

    1. If the reporting entity is an OBU, is this transaction/RAS an OB activity?

    Always indicate False since share based employment remuneration arrangements are not an OB activity under section 121D of the ITAA 1936.

    (LCMSF63)

    1. Is this transaction/RAS covered by a category on the Exclusion List?

    Indicate False, since none of the categories on the exclusions list can apply to these IRPD Use Rights.

    (LCMSF48)

    1. What category of the Exclusion List applies to this transaction/RAS?

    Not applicable.

    (LCMSF49)

    Reporting example: IRPD share based employment remuneration

    Example 8: Provision of recharge amounts to German IRP

    Aus Co is a company that is resident in Australia for tax purposes.

    Aus Co has an income tax year ending 30 June.

    Aus Co’s functional currency for Australian tax purposes is Australian dollars.

    During the income year Aus Co paid $2 million to its ultimate parent company resident for tax purpose in Germany (German Co) to compensate German Co for providing rights over shares in German Co to senior executives of Aus Co. Aus Co claimed a deduction for income tax purposes for this $2 million payment for the income year.

    Aus Co did not pay or obtain consideration of a capital nature in relation to the recharge arrangements for share-based compensation.

    Aus Co did receive non-monetary consideration in relation to the recharge amounts paid to German Co, being the share rights granted by German Co in connection with the remuneration of senior executives of Aus Co.

    Aus Co has applied the transfer pricing methodology ‘Other arm’s length method’ to all recharge amounts paid to German Co.

    Aus Co has prepared relevant contemporaneous transfer pricing documentation for 100% of the recharge arrangements for share based compensation.

    Aus Co completes the questions for the IRP transactions/RAS in this example based on its income tax records as shown in the following tables.

     

    Table 13: Completed entry – Recharge amounts paid to German Co (IRPD share-based employment remuneration)
    Table 13: Completed entry – Recharge amounts paid to German Co (IRPD share-based employment remuneration)

    Question no.

    Question label

    Response

    na

    Local file – Part A Transaction Identifier

    [Transaction ID]

    1

    Transaction Category

    SBER

    2

    Is this transaction part of a RAS?

    False

    3

    How many transactions are part of the RAS?

     na

    4

    ABN or TFN of the Australian counterparty to the transaction/RAS

    [ABN or TFN]

    5

    Name of the IRP non-resident counterparty to the transaction/RAS

    German Co

    6

    Tax residence of the IRP non-resident counterparty to the transaction/RAS

    DE

    7

    Amount of consideration paid (of a capital nature for income tax purposes) for the transaction/RAS

    0

    8

    Amount of consideration received (of a capital nature for income tax purposes) for the transaction/RAS

    0

    9

    Was non-monetary consideration provided (of a capital nature for income tax purposes) for the transaction/RAS?

    False

    10

    Was non-monetary consideration obtained (of a capital nature for income tax purposes) for the transaction/RAS?

    False

    11

    Amount of expenditure (not of a capital nature for income tax purposes) for the transaction/RAS deducted for income tax purposes

    2000000

    12

    Amount of revenue (not of a capital nature for income tax purposes) for the transaction/RAS returned as assessable for income tax purposes

    0

    13

    Was non-monetary consideration provided (not of a capital nature for income tax purposes) for the transaction/RAS?

    False

    14

    Was non-monetary consideration obtained (not of a capital nature for income tax purposes) for the transaction/RAS?

    True

    15

    Amount of foreign exchange losses deducted for the transaction/RAS

    0

    16

    Amount of foreign exchange gains returned for the transaction/RAS

    0

    17

    What transfer pricing/capital asset pricing methodology has been applied to the transaction/RAS?

    OM

    18

    What level of transfer pricing documentation has been prepared for this transaction/RAS?

    6

    19

    If the reporting entity is a bank and transaction is in a RAS, has the special short term tenor rule for ordinary borrowings and ordinary loans been applied to this RAS?

    False

    20

    If the reporting entity is a bank and this transaction is in a RAS, has the special short term tenor rule for short term derivatives been applied to this RAS?

    False

    21

    If the reporting entity is a bank and this transaction is in a RAS, has the special rule for FX derivatives been applied to this RAS?

    False

    22

    If the reporting entity is an OBU, is this transaction/RAS an OB activity?

    False

    23

    Is this transaction/RAS covered by a category on the Exclusions List?

    False

    24

    What category of the Exclusions List applies to this transaction/RAS?

    na

     

    End of example
      Last modified: 26 Apr 2018QC 52807