General value shifting regime – rulings, law and objections

The ATO Legal Database provides access to legal and policy information used by the ATO to make decisions.

The information below contains links to relevant general value shifting regime (GVSR) information located on the ATO Legal Database.

Legislation and supporting material

Primary legislative references

• Division 723 of the Income Tax Assessment Act 1997
• Division 725 of the Income Tax Assessment Act 1997
• Division 727 of the Income Tax Assessment Act 1997
• Schedule 15 of the New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002)
  • introduce a GVSR that replaces former value shifting provisions.
   

The GVSR covers three categories of value shifting:

1. Direct value shifts through creation of rights over non-depreciating assets.
2. Direct value shifts of equity or loan interests in a single company or trust.
3. Indirect value shifts of equity or loan interests in companies and trusts not dealing with each other at arm's length.

See also:

• Chapters 7 to 12 and chapter 14 of the revised explanatory memorandum that accompanied the legislation.

Consolidation interactions

• Subdivision 715-G of the Income Tax Assessment Act 1997
• Subdivision 715-H of the Income Tax Assessment Act 1997
• 719-T of the Income Tax Assessment Act 1997
• Schedule 7 of the New Business Tax System (Consolidation and Other Measures) Act 2003
  • ensure that the GVSR applies in an appropriate way for consolidated groups and multiple entry consolidated (MEC) groups, and
  • provide rules to preserve the integrity of the indirect value shifting rules (and the loss integrity rules) where it is unrealistic for those provisions to apply in the consolidation environment (loss reduction method).
   

See also:

• Chapter 11 of the explanatory memorandum that accompanied the legislation.

Transitional relief

Schedule 2 of the Taxation Laws Amendment Act (No. 2) 2004 modifies the application of the indirect value shifting rules to exclude most services related value shifts during the consolidation transitional period.

See also:

• Chapter 2 of the explanatory memorandum accompanying the legislation.

ATO interpretative decisions

An ATO interpretative decision (ATO ID) is a summary of a decision on an interpretative issue and is indicative of our view on the interpretation of the law on that particular issue.

ATO IDs are produced to help ATO officers apply the law consistently and accurately to particular situations.

Next steps:

• Read a comprehensive Guide to the general value shifting regime
• Learn more about the ATO Legal Database 
• Visit the 'General value shifting regime' homepage

The primary legislative references and extrinsic material relating to the general value shifting regime.