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  • Item 3a

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    This item asks whether any non-monetary consideration has been given or received in any dealings with related international parties.

    These dealings may include providing services, transferring property (both tangible and intangible) or any similar dealings.

    The nature of the dealing in which the non-monetary consideration is provided may be a barter, swap, bonus or discount, or any type of similar agreement.

    Non-monetary consideration will generally include any consideration other than:

    • monetary payment
    • payment by cheque
    • telegraphic and bank-to-bank transfer of funds
    • inter-company loan account charges.

    In particular, debt-for-equity swaps and non-monetary settlements of inter-company loan accounts will be taken to be non-monetary consideration.

    Example 5

    A taxpayer purchased trading stock for $20 million from an international related party.

    The taxpayer would print Y for yes at B if, rather than paying for the trading stock with a $20 million telegraphic funds transfer to the related party's loan account, the decision was made to settle the debt by any of the following:

    • forgiving royalties that would otherwise be payable by the international related party
    • transferring title in a fixed asset
    • agreeing to a discount on specified future transactions.
    • However, where individual debts between two parties are aggregated or netted and the net balance settled monetarily, this will not be considered to be non-monetary consideration.

    As mentioned earlier, for the purposes of Schedule 25A 2011, a permanent establishment is to be treated as a separate party from its head office or other related parties. Consequently, where non-monetary consideration passes between a permanent establishment and its head office in return for the provision of services or other transactions listed on Schedule 25A 2011, print Y for yes at B item 3a.

    Last modified: 28 Sep 2012QC 24214