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  • IRPD debt interests (including ordinary loans and borrowings)

    Table 33: IRPD debt interests (including ordinary loans and borrowings)

    Code

    Description of transaction category

    OBL

    Ordinary borrowings/loans (excluding trade financing)

    Any IRPDs in the nature of an ordinary borrowing or an ordinary loan, but excluding trade financing.

    ‘Borrowing’ and 'loan' should be given their ordinary meaning within the context of commercial and accounting practices.

    Ordinary borrowings/loans do not include raising finance by issue of, or assumption of, liabilities under:

    • bonds
    • promissory notes
    • convertible notes
    • shares
    • other securities.

    Note: accounts payable or accounts receivable are not considered ordinary borrowings/loans unless they have been classified as debt interest. Accounts payable or accounts receivable should be reported as consideration paid or received for the IRPDs it relates to. Only report accounts payable or accounts receivable as separate IRPDs when they have been reclassified as debt interests.

    TFIN

    Trade financing

    Any IRPDs in the nature of financing to fund trading liabilities including:

    • issuing letters of credit (back-to-back, red-clause, revolving, stand-by, transferable)
    • documentary credits
    • documentary collections
    • export credit.

     

    BND

    Bonds

    Any IRPDs in the nature of the issue, acquisition or holding of bonds including:

    • corporate bonds
    • sovereign bonds
    • foreign currency bonds
    • income bonds
    • callable bonds
    • zero coupon bonds.

     

    PNOT

    Promissory notes

    Any IRPDs in the nature of the issue, acquisition or holding of promissory notes.

    The term ‘promissory note’ has its ordinary meaning.

    CNTDI

    Convertible notes that are debt interests

    Any IRPDs in the nature of the issue, acquisition or holding of convertible notes that are debt interests under Division 974 of the ITAA 1997.

    The term ‘convertible note’ means promissory notes that may be converted into other debt or equity interests or securities upon specified contingent or non-contingent events.

    CSTDI

    Convertible shares that are debt interests

    Any IRPDs in the nature of the issue, acquisition or holding of convertible shares that are debt interests under Division 974 of the ITAA 1997.

    The term ‘convertible share’ means a share in a company of other equity interest that may be converted into other debt or equity interests or securities upon specified contingent or non-contingent events.

    RPSDI

    Redeemable preference shares that are debt interests

    Any IRPDs in the nature of the issue, acquisition or holding of redeemable preference shares that are debt interests under Division 974 of the ITAA 1997.

    The term ‘redeemable preference share’ means a share in a company that may be redeemed by the company or the holder upon specified contingent or non-contingent events under the terms or conditions of the share and which carries preferential rights as compared to other kinds of shares, such as a preferential right to a particular amount of distributions.

    OKDI

    Other kinds of debt interests

    Any IRPDs involving the issue, acquisition or holding of a debt interests under Division 974 of the ITAA 1997 but excluding the following transaction categories:

    • Ordinary borrowings/loans
    • Trade financing
    • Bonds
    • Promissory notes
    • Convertible notes that are debt interests
    • Convertible shares that are debt interests
    • Redeemable preference shares that are debt interests

     

    Special instructions for showing balances of borrowings, loans and other debt interests

    For loans/borrowings, trade financing and other kinds of debt interests under Division 974 of the ITAA 1997, the average quarterly balance of the loan/borrowing or other debt interest during the income year is calculated in the same way as quarterly balances of borrowings and loans shown at Item 11a of the IDS.

    More detail about how to calculate and show the average quarterly balance of loans, borrowings and other debt interests at Questions 7 and 8 of Part A of the local file is provided below.

    1. Transaction Identifier

    Show the Transaction ID for the transaction being reported.

    (LCMSF31)

    1. Related Transaction Identifier(s)

    Show all Transaction IDs that are directly connected to the transaction being reported.

    (LCMSF206)

    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. Australian counterparty name

    Show the full name of the Australian counterparty (which may be the reporting entity itself) to this transaction/RAS.

    (LCMSF207)

    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. Was the transaction/RAS entered into by the non-resident counterparty in the course of its business operations carried on through a permanent establishment in a different country to its country of tax residence?

    Indicate True if the transaction/RAS was entered into by the non-resident counterparty in the course of its business operations carried on through a PE in a different country to its country of tax residence.

    Otherwise indicate False.

    (LCMSF208)

    1. Country of permanent establishment of non-resident counterparty

    This question applies only if you answer True to Question 10.

    Show the country codeExternal Link of the PE.

    (LCMSF209)

    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 its accounting 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

    (LCMSF40) Show the amount of consideration received of a capital nature for income tax purposes other than an amount relating to the loan balance.

    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

    The reporting rules for showing the amount of expenditure not of a capital nature for income tax purposes at this question depend on the nature of the IRP debt interests.

    IRPD debt interests are ordinary borrowing or trade financing borrowing

    Show the amount of interest paid and any other expenditure not of a capital nature for income tax purposes for the IRP ordinary borrowing or trade financing borrowing transaction/RAS during the income year based on the reporting entity’s accounting records, excluding interest that has been capitalised based on the reporting entity’s accounting records.

    If there was no amount of interest paid or any other expenditure not of a capital nature for the IRP borrowing during the income year for the IRP ordinary borrowing or trade financing borrowing transaction/RAS during the income year, show zero.

    IRPD debt interests are bonds / promissory notes / convertible notes that are debt interests / convertible shares that are debt interests / redeemable preference shares that are debt interests / other debt interests issued or assumed by reporting entity

    Show the amount of interest paid, any other return paid or payable and any other expenditure not of a capital nature for income tax purposes for the IRP debt interest transaction/RAS for the income year based on the reporting entity’s accounting records, excluding interest that has been capitalised based on the reporting entity’s accounting records.

    If there was no amount of interest paid, any other return paid or payable or any other expenditure not of a capital nature for the IRP debt interest 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

    The reporting rules for showing the amount of revenue not of a capital nature for income tax purposes at this question depend on the nature of the IRP debt interests.

    IRPD debt interests are ordinary loans or trade financing loans

    Show the amount of interest received and any other revenue not of a capital nature for income tax purposes for the IRP ordinary loan or trade financing loan transaction/RAS during the income year based on the reporting entity’s accounting records, excluding interest that has been capitalised based on the reporting entity’s accounting records.

    If there was no amount of interest received or any other revenue not of a capital nature for the IRP borrowing during the income year for the IRP ordinary loan or trade financing loan transaction/RAS during the income year, show zero.

    IRPD debt interests are bonds / promissory notes / convertible notes that are debt interests / convertible shares that are debt interests / redeemable preference shares that are debt interests / Other debt interests held by reporting entity

    Show the amount of interest received, any other return received or receivable and any other revenue not of a capital nature for income tax purposes for the IRP debt interest transaction/RAS for the income year based on the reporting entity’s accounting records, excluding interest that has been capitalised based on the reporting entity’s accounting records.

    If there was no amount of interest received, any other return received or receivable or any other revenue not of a capital nature for the IRP debt interest transaction/RAS during the income year, show zero.

    (LCMSF42)

    1. Average balance of debt interests

    Due to the incorrect order of Question 19 and Question 21, we ask reporting entities to report IRPD borrowings and other inbound debt interests at this question for the 2018 and 2019 reporting periods, despite 'debt interests held' ordinarily meaning IRPD loans and other outbound debt interests.

    *Note that this question will be changed to "Average balance of debt interests issued (inbound borrowings)" in the local file / master file ML schema for reporting periods commencing on or after 1 January 2019.

    The reporting rules for showing the average balance of IRP borrowings or other inbound IRP debt interests depends on the nature of the IRP debt interests.

    Where IRPD debt interests are ordinary borrowings or trade financing borrowings

    Show the amount of the average quarterly balance of the IRP ordinary borrowing transaction/RAS or for the IRP trade financing borrowing transaction/RAS during the income year determined by:

    • adding up the amount of the balance of the borrowing based on the reporting entity's accounting records at the start of the year and the amount of balance of the borrowing based on the reporting entity's accounting records at the end of each quarter.
    • dividing the result by five.

    Where IRPD debt interests are bonds / promissory notes / convertible notes that are debt interests / convertible shares that are debt interests / redeemable preference shares that are debt interests / other debt interests issued or assumed by reporting entity

    Show the amount of the average quarterly balance of the proceeds received for issue or assumption (price or value) of bonds, notes or other debt interests for the IRP transactions/RAS during the income year determined by:

    • adding up the amount of the price or value of the debt interests based on the reporting entity’s accounting records at the start of the year and the amount of the price or value of the debt interests based on the reporting entity’s accounting records at the end of each quarter
    • dividing the result by five.

    (LCMSF210)

    1. Capitalised interest deducted

    Show the amount of capitalised interest deducted in respect of the IRPD debt interest.

    (LCMSF211)

    1. Average balance of debt interests

     Due to the incorrect order of Question 19 and Question 21, we ask reporting entities to report IRPD loans and other outbound debt interests at this question for the 2018 and 2019 reporting periods, despite 'debt interests issued' ordinarily meaning IRPD borrowings and other inbound debt interests.

    *Note that this question will be changed to "Average balance of debt interests held (outbound loans)" in the local file / master file XML schema for reporting periods commencing on or after 1 January 2019.

    The reporting rules for showing the average balance of IRP loans or other outbound IRP debt interests depends on the nature of the IRP debt interests.

    Where IRPD debt interests are ordinary loans or trade financing loans

    Show the amount of the average quarterly balance for the IRP ordinary loan transaction/RAS or for the IRP trade financing loan transaction/RAS during the income year determined by:

    • adding up the amount of the balance of the loans based on the reporting entity’s accounting records at the start of the year and the amount of the balance of the loans based on the reporting entity’s accounting records at the end of each quarter
    • dividing the result by five.

    Where IRPD debt interests are bonds / promissory notes / convertible notes that are debt interests / convertible shares that are debt interests / redeemable preference shares that are debt interests / other debt interests held by reporting entity

    Show the amount of the average quarterly balance of the cost of acquisition (cost or value) for the bonds, notes or other debt interests for the IRP transaction/RAS during the income year determined by:

    • adding up the amount of the cost or value of the debt interest based on the reporting entity’s accounting records at the start of the year and the amount of the cost or value of the debt interest based on the reporting entity’s accounting records at the end of each quarter
    • dividing the result by five.

    (LCMSF212)

    1. Capitalised interest returned

    Show the amount of capitalised interest returned in respect of the IRPD debt interest.

    (LCMSF213)

    1. Book values

    Not applicable.

    (LCMSF214)

    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 IRP transaction/RAS during the income year, indicate True.

    Otherwise indicate False.

    (LCMSF45)

    1. Did you enter into a deferred foreign currency payment arrangement in relation to this transaction

    Not applicable for this transaction category.

    (LCMSF215)

    1. Foreign Currency Reporting Type

    Not applicable for this transaction category.

    (LCMSF216)

    1. Foreign Currency Code

    Not applicable for this transaction category.

    (LCMSF217)

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

    This question applies only if you answer False to Question 25.

    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 6.

    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. Foreign Currency Code

    Show the Foreign Currency CodeExternal Link in relation to foreign exchange losses deducted for the transaction/RAS.

    (LCMSF219)

    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 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 6.

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

    (LCMSF43)

    1. Foreign Currency Code

    Show the Foreign Currency CodeExternal Link in relation to foreign exchange gains returned for the transaction/RAS

    (LCMSF221)

    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 the following Simplified Transfer Pricing Record Keeping (STPRK) options, show the code(s) for the STPRK option applied to the transaction/RAS:

    7 = STPRK (Materiality)

    8 = STPRK (Low Level Loans – Inbound)

    16 = Green Zone (PCG 2017/4)

    (LCMSF47)

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

    If the reporting entity has an unconditional or conditional Australian banking licence and has applied the special short term tenor rule for ordinary borrowings and ordinary loans, indicate True.

    Otherwise indicate False.

    (LCMSF88)

    1. If the reporting entity is a bank and this of 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?

    If the reporting entity is an OBU and this transaction/RAS is an OB activity under sections 121D and 121EAA of the ITAA 1936, indicate True.

    Otherwise indicate False.

    (LCMSF63)

    1. Is this transaction/RAS covered by a category on the exclusions list?

    If this transaction/RAS is covered by the Simplified Transfer Pricing Record Keeping (Low Level Loans – Inbound) category on the exclusions list, indicate True.

    Otherwise indicate False.

    (LCMSF48)

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

    If the Simplified Transfer Pricing Record Keeping (Low Level Loans – Inbound) category on the exclusions list applies to this transaction/RAS and you have indicated True to Question 38, select the code STPRKLLI.

    (LCMSF49)

    1. Transaction Comments

    Provide any relevant comments in respect of the transaction/RAS.

    (LCMSF222)

    Reporting examples: IRPDs of a financial nature

    Example 11: IRP ordinary borrowings and loans with UK and US IRPs

    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 had borrowings and loans with IRPs resident for tax purposes in the UK (UK Co) and in the US (US Co).

    None of these borrowings or loans were trade financing.

    The borrowings and loans with UK Co and US Co were as shown in the below table.

    Table 34: Borrowings by Aus Co

    Borrower

    Lender

    Amount/currency of borrowing

    Tenor of borrowing

    When borrowing entered into

    Aus Co

    UK Co

    A$50m

    10 years

    Before the income year

    Aus Co

    UK Co

    A$15m

    12 months

    During the income year

    Aus Co

    UK Co

    A$5m

    12 months

    During the income year

    Aus Co

    UK Co

    GB£50m

    10 years

    Before the income year

    Aus Co

    US Co

    A$100m

    3 years

    Before the income year

    Table 35: Loans by Aus Co

    Lender

    Borrower

    Amount/currency of borrowing

    Tenor of borrowing

    When borrowing entered into

    Aus Co

    US Co

    A$100m

    3 years

    Before the income year

    On 1 March, UK Co forgave half (GBP25m) of Aus Co’s GBP50m borrowing from UK Co. Aus Co therefore obtained non-monetary consideration of a capital nature during the income year in relation to this GBP50m borrowing from UK Co.

    The average quarterly balances of the loans and borrowings are determined in accordance with the instructions for Question 18 and Question 19 as shown in the following tables.

    Table 36: Average quarterly balance of borrowing by Aus Co from UK Co

    Date

    A$50m borrowing (10 years)

    A$15m borrowing (12 months)

    A$5m borrowing (12 months)

    GBP50m borrowing (10 years)

    01/07/16

    A$50m

    0

    0

    GB£50m

    30/09/16

    A$50m

    A$15m

    0

    GB£50m

    31/12/16

    A$50m

    A$15m

    0

    GB£50m

    31/03/17

    A$50m

    A$15m

    0

    GB£25m

    30/06/17

    A$50m

    A$15m

    A$5m

    GB£25m

    Total

    A$250m

    A$60m

    A$5m

    GB£200m

    Average balance (Total ÷ 5)

    A$50m

    A$12m

    A$1m

    GB£40m

    AUD equivalent of average balance

    A$50m

    A$12m

    A$1m

    A$68m

    Table 37: Average quarterly balance of borrowings by Aus Co from US Co

    A$100m borrowing from US Co (three year)

    Date

    Borrowing balance

    01/07/16

    A$100m

    30/09/16

    A$100m

    31/12/16

    A$100m

    31/03/17

    A$100m

    30/06/17

    A$100m

    Total

    A$500m

    Average balance (Total ÷ 5)

    A$100m

     Table 38: Average quarterly balance of loan by Aus Co to US Co

    A$100m loan to US Co (three year)

    Date

    Loan balance

    01/07/16

    A$100m

    30/09/16

    A$100m

    31/12/16

    A$100m

    31/03/17

    A$100m

    30/06/17

    A$100m

    Total

    A$500m

    Average balance (Total ÷ 5)

    A$100m

    The two 12-month Australian dollar borrowings from UK Co are borrowings by Aus Co from the same IRP on the same terms except for date, volume, price and delivery. Accordingly, these two borrowings are in the same RAS with the result that the values for the two borrowings can be aggregated in Part B of the local file. The aggregated values for these two borrowings in the same RAS in determining the average quarterly balance are shown in the following table.

    Table 39: Aggregated values

    A$15m + A$5m borrowings from UK Co (12 months)

    Date

    RAS aggregated borrowing balances

    01/07/16

    0

    30/09/16

    A$15m

    31/12/16

    A$15m

    31/03/17

    A$15m

    30/06/17

    A$20m

    Total

    A$65m

    Average balance (Total ÷ 5)

    A$13m

    The GB£50 million 10-year borrowing from UK Co and the A$50 million 10-year borrowing from UK Co are not on the same terms except for date, volume, price and delivery because the currency of the borrowing is not the same. Loans or borrowings in different currencies cannot be included in the same RAS under the rules in Appendix 8.

    The A$50 million 10-year borrowing from UK Co and the total A$20 million 12-month borrowings from UK Co are not on the same terms except for date, volume, price and delivery because the tenor of the borrowings is not the same. Loans and borrowings with different express tenors cannot be included in the same RAS under the rules in Appendix 8.

    The A$100 million three-year borrowing from US Co and the A$100 million three-year loan to US Co are not on the same terms except for date, volume, price and delivery because a loan and a borrowing are not agreements on the same terms except for date, volume, price and delivery. For more about how agreements on reverse or opposite terms cannot be included in the same RAS, refer to paragraph 30 of Appendix 8.

    The amount of interest payable on the IRP borrowings by Aus Co from UK Co for the income year based on Aus Co’s accounting records is shown in the following table.

    Table 40: Interest payable on AUD and GBP borrowings by Aus Co from UK Co during income year

    Borrowings

    A$50m (10 years)

    A$20m (12 months)

    (A$15m + A$5m in RAS)

    GBP50m (10 years)

    Interest paid

    A$3m

    A$800,000

    GB£1.8m

    AUD equivalent

    A$3m

    A$800,000

    A$3.006m

    The amount of interest payable by Aus Co on the IRP borrowing from US Co for the income year based on Aus Co’s accounting records is shown in the following table.

    Table 41: Interest paid on AUD borrowing by Aus Co from US Co during income year

    Borrowings

    A$100m (three years)

    Interest paid

    A$3m

    AUD equivalent

    A$3m

    The amount of interest receivable by Aus Co on the IRP loan to US Co for the income year based on Aus Co’s accounting records is shown in the following table.

    Table 42: Interest received on AUD loan by Aus Co to US Co during income year

    Loans

    A$100m (three years)

    Interest paid

    0

    AUD equivalent

    0

    Aus Co is subject to the TOFA rules in Division 230 of the ITAA 1997. The borrowings and the loans are financial arrangements under the TOFA rules. Aus Co realised an assessable foreign exchange gain under Subdivision 775-F of the ITAA 1997 when half of its GB£50 million borrowing was forgiven by UK Co on 1 March. The TOFA rules apply so Aus Co’s unrealised foreign exchange gains are assessable and unrealised foreign exchange losses are deductible for the income year.

    For the income year, Aus Co returned a total of $7.5 million of realised and unrealised foreign exchange gains in respect of its GB£50 million borrowing from UK Co for Australian tax purposes.

    Aus Co has applied the transfer pricing methodology ‘Comparable uncontrolled price method’ to all its borrowings and loans with UK Co and US Co.

    Aus Co has prepared relevant contemporaneous transfer pricing documentation for 100% of its borrowings and loans with UK Co and US Co.

    Aus Co is not an OBU. Aus Co does not have a conditional or unconditional Australian banking licence.

    UK Co does not carry on its business operations through a permanent establishment.

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

    Table 43: Completed entry – A$50m (10 year) borrowing from UK Co (Ordinary borrowings)

    Question no.

    Question label

    Response

     1

    Transaction Identifier

    [Transaction ID]

    2

    Related Transaction Identifier(s)

    Transaction IDs]

    3

    Transaction category

    OBL

    4

    Is this transaction part of a RAS?

    False

    5

    How many transactions are part of the RAS?

    na

    6

    Australian counterparty name

    [Australian counterparty name]

    7

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

    [ABN or TFN]

    8

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

    UK Co

    9

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

    GB

    10

    Was the transaction/RAS entered into by the non-resident counterparty in the course of its business operations carried on through a permanent establishment in a different country to its country of tax residence?

    False

    11

    Country of permanent establishment counterparty

    na

    12

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

    0

    13

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

    0

    14

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

    False

    15

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

    False

    16

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

    3000000

    17

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

    0

    18

    Average balance of debt interests (inbound borrowings)

    50000000

    19

    Capitalised interest deducted

    0

    20

    Average balance of debt interests (outbound loans)

    na

    21

    Capitalised interest returned

    na

    22

    Book values

    na

    23

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

    False

    24

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

    False

    25

    Did you enter into a deferred foreign currency payment arrangement in relation to this transaction

    na

    26

    Foreign Currency Reporting Type

    na

    27

    Foreign Currency Code

    na

    28

    Amount of foreign exchange losses deducted for the transaction/RAS

    0

    29

    Foreign Currency Code

    na

    30

    Amount of foreign exchange gains returned for the transaction/RAS

    0

    31

    Foreign Currency Code

    na

    32

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

    CUP

    33

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

    6

    34

    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

    35

    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

    36

    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

    37

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

    False

    38

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

    False

    39

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

    na

    40

    Transaction Comments

    [Comments]

    Table 44: Completed entry – A$20m (12 month) borrowings in RAS ($15m + $5m) from UK Co (Ordinary borrowings)

    Question no.

    Question label

    Response

    1

    Transaction Identifier

    [Transaction ID]

    2

    Related Transaction Identifier(s)

    [Transaction IDs]

    3

    Transaction category

    OBL

    4

    Is this transaction part of a RAS?

    True

    5

    How many transactions are part of the RAS?

    Low

    6

    Australian counterparty name

    [Australian counterparty name]

    7

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

    [ABN or TFN]

    8

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

    UK Co

    9

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

    GB

    10

    Was the transaction/RAS entered into by the non-resident counterparty in the course of its business operations carried on through a permanent establishment in a different country to its country of tax residence?

    False

    11

    Country of permanent establishment counterparty

    na

    12

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

    0

    13

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

     

    14

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

    False

    15

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

    True

    16

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

    800000

    17

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

    0

    18

    Average balance of debt interests (inbound borrowings)

    13000000

    19

    Capitalised interest deducted

    0

    20

    Average balance of debt interests (outbound loans)

    na

    21

    Capitalised interest returned

    na

    22

    Book values

    na

    23

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

    False

    24

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

    False

    25

    Did you enter into a deferred foreign currency payment arrangement in relation to this transaction

    na

    26

    Foreign Currency Reporting Type

    na

    27

    Foreign Currency Code

    na

    28

    Amount of foreign exchange losses deducted for the transaction/RAS

    0

    29

    Foreign Currency Code

     

    30

    Amount of foreign exchange gains returned for the transaction/RAS

    0

    31

    Foreign Currency Code

     

    32

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

    CUP

    33

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

    6

    34

    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

    35

    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

    36

    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

    37

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

    False

    38

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

    False

    39

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

     na

    40

    Transaction Comments

    [Comments]

    Table 45: Completed entry – GBP50m (10 year) borrowing from UK Co (Ordinary borrowings)

    Question no.

    Question label

    Response

    1

    Transaction Identifier

    [Transaction ID]

    2

    Related Transaction Identifier(s)

    [Transaction IDs]

    3

    Transaction category

    OBL

    4

    Is this transaction part of a RAS?

    False

    5

    How many transactions are part of the RAS?

    na

    6

    Australian counterparty name

    [Australian counterparty name]

    7

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

    [ABN or TFN]

    8

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

    UK Co

    9

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

    GB

    10

    Was the transaction/RAS entered into by the non-resident counterparty in the course of its business operations carried on through a permanent establishment in a different country to its country of tax residence?

    False

    11

    Country of permanent establishment counterparty

    na

    12

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

    0

    13

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

     

    14

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

    False

    15

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

    True

    16

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

    3006000

    17

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

    0

    18

    Average balance of debt interests (inbound borrowings)

    68000000

    19

    Capitalised interest deducted

    0

    20

    Average balance of debt interests (outbound loans)

    na

    21

    Capitalised interest returned

    na

    22

    Book values

    na

    23

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

    False

    24

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

    False

    25

    Did you enter into a deferred foreign currency payment arrangement in relation to this transaction

    na

    26

    Foreign Currency Reporting Type

    na

    27

    Foreign Currency Code

    na

    28

    Amount of foreign exchange losses deducted for the transaction/RAS

    0

    29

    Foreign Currency Code

    na

    30

    Amount of foreign exchange gains returned for the transaction/RAS

    7500000

    31

    Foreign Currency Code

    GBP

    32

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

    CUP

    33

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

    6

    34

    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

    35

    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

    36

    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

    37

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

    False

    38

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

    False

    39

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

    na

    40

    Transaction Comments

    [Comments]

    Table 46: Completed entry – A$100m (three year) borrowing from US Co (Ordinary borrowings)

    Question no.

    Question label

    Response

    1

    Transaction Identifier

    [Transaction ID]

    2

    Related Transaction Identifier(s)

    [Transaction IDs]

    3

    Transaction category

    OBL

    4

    Is this transaction part of a RAS?

    False

    5

    How many transactions are part of the RAS?

    na

    6

    Australian counterparty name

    [Australian counterparty name]

    7

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

    [ABN or TFN]

    8

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

    US Co

    9

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

    US

    10

    Was the transaction/RAS entered into by the non-resident counterparty in the course of its business operations carried on through a permanent establishment in a different country to its country of tax residence?

    False

    11

    Country of permanent establishment counterparty

    na

    12

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

    0

    13

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

     

    14

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

    False

    15

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

    False

    16

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

    3000000

    17

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

    0

    18

    Average balance of debt interests (inbound borrowings)

    100000000

    19

    Capitalised interest deducted

    0

    20

    Average balance of debt interests (outbound loans)

    na

    21

    Capitalised interest returned

    na

    22

    Book values

    na

    23

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

    False

    24

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

    False

    25

    Did you enter into a deferred foreign currency payment arrangement in relation to this transaction

    na

    26

    Foreign Currency Reporting Type

    na

    27

    Foreign Currency Code

    na

    28

    Amount of foreign exchange losses deducted for the transaction/RAS

    0

    29

    Foreign Currency Code

    na

    30

    Amount of foreign exchange gains returned for the transaction/RAS

    0

    31

    Foreign Currency Code

    na

    32

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

    CUP

    33

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

    6

    34

    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

    35

    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

    36

    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

    37

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

    False

    38

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

    False

    39

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

    na

    40

    Transaction Comments

    [Comments]

    Table 47: Completed entry – A$100m (three year) loan to US Co (Ordinary loans)

    Question no.

    Question label

    Response

    1

    Transaction Identifier

    [Transaction ID]

    2

    Related Transaction Identifier(s)

    [Transaction IDs]

    3

    Transaction category

    OBL

    4

    Is this transaction part of a RAS?

    False

    5

    How many transactions are part of the RAS?

    na

    6

    Australian counterparty name

    [Australian counterparty name]

    7

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

    [ABN or TFN]

    8

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

    US Co

    9

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

    US

    10

    Was the transaction/RAS entered into by the non-resident counterparty in the course of its business operations carried on through a permanent establishment in a different country to its country of tax residence?

    False

    11

    Country of permanent establishment counterparty

    na

    12

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

    0

    13

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

    0

    14

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

    False

    15

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

    False

    16

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

    0

    17

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

    0

    18

    Average balance of debt interests (inbound borrowings)

    na

    19

    Capitalised interest deducted

    na

    20

    Average balance of debt interests (outbound loans)

    100000000

    21

    Capitalised interest returned

    0

    22

    Book values

    na

    23

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

    False

    24

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

    False

    25

    Did you enter into a deferred foreign currency payment arrangement in relation to this transaction

    na

    26

    Foreign Currency Reporting Type

    na

    27

    Foreign Currency Code

    na

    28

    Amount of foreign exchange losses deducted for the transaction/RAS

    0

    29

    Foreign Currency Code

    na

    30

    Amount of foreign exchange gains returned for the transaction/RAS

    0

    31

    Foreign Currency Code

    na

    32

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

    CUP

    33

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

    6

    34

    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

    35

    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

    36

    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

    37

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

    False

    38

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

    False

    39

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

     na

    40

    Transaction Comments

    [Comments]

     

    End of example
      Last modified: 14 Jun 2019QC 56216