Section C: Category C reportable tax positions

What to disclose in Section C

In Section C you need to disclose Category C RTPs. You must complete all the mandatory fields for each RTP you are reporting.

The questions will tell you if you need to consider materiality. When the question doesn't include any materiality criteria, you must disclose a Category C RTP if the arrangement, transaction or circumstances covered is relevant for your entity.

Unless otherwise specified, the questions refer to arrangements or transactions:

• in place at any time in the income year
• covered by the tax return the schedule accompanies.

You don't need to disclose an arrangement for a Category C question referencing a taxpayer alert if:

• we have already reviewed the arrangement and advised we won't be taking further action
• there has been no material change to the arrangement since our review.

Did you have any Category C RTPs for the 2023–24 income year?

You must confirm if your entity has any Category C disclosures.

Select from the drop-down menu, either Yes or No.

If you select No, go to Section D: Declaration and signature.

If you select Yes, the next question will ask how many Category C RTPs you are reporting?

How many Category C RTPs are you reporting?

Enter the total number of Category C RTPs you are reporting.

You will need to follow the instructions for answering individual Category C questions to ensure you make a complete disclosure.

Using the PDF schedule

In the PDF version, once you enter the number of RTPs you are disclosing and move off the field, it will automatically display the required number of fields to make the disclosures.

Have you discussed this position with the ATO?

For each disclosure you make, you must confirm if you (or another representative of your entity) have previously discussed the disclosure with us. All fields must be completed for each disclosure, no matter what answer you provide.

Select from the drop-down menu, either Yes or No.

RTP Category C question and subcategory

Enter the number of the Category C question you are disclosing in the RTP Category C question field. If there are subcategories, enter the relevant subcategory in the RTP Category C subcategory field.

If your entity has multiple positions covered by a single question, the question will tell you how to disclose this. You may need to select the appropriate subcategory or make a disclosure for each position.

For all Category C questions, you must make a disclosure if your entity had an arrangement covered by a question at any time during the year. If the arrangement is no longer in place at the time of preparing your entity's tax return, note this in the Comments field.

Comments

Some questions specify the information you must provide in this field.

If a question doesn't require information in the Comments field, we encourage you to briefly explain your entity's arrangements. Doing so may mean we:

• don't need to contact you for more information
• can ask more targeted questions, if we do require more information.

Question 1

Question removed as the information is collected through other means.

Question 2

Question removed. Legislation has passed introducing a new integrity measure to address the concerns raised in TA 2015/2.

Question 3

Has your entity entered into arrangements, or variation of arrangements, described in Taxpayer Alert TA 2015/5 involving the use of offshore entities that source goods (procurement hubs)?

Question 4

Question removed due to impacts of legislative changes.

Question 5

Question removed as the information is collected through other means.

Question 6

Question removed as the arrangement falls within Schedule 2 of PCG 2017/4 and the risk rating under that schedule is required to be disclosed at question 23.

Question 7

Question removed as the information is collected through other means.

Question 8

Question removed due to impacts of legislative changes.

Question 9

If your entity has related party dealings involving centralised services hub arrangements, disclose the outcome you have self-assessed using the applicable schedule in Practical Compliance Guideline PCG 2017/1 for each hub arrangement your entity is involved in.

For offshore marketing hub arrangements:

• Subcategory 1: white zone
• Subcategory 2: green zone
• Subcategory 3: blue zone
• Subcategory 4: yellow zone
• Subcategory 5: amber zone
• Subcategory 6: red zone
• Subcategory 7: red zone, did not apply ATO risk methodology or calculate tax impact.

For offshore non-core procurement hub arrangements:

• Subcategory 11: white zone
• Subcategory 12: green zone
• Subcategory 13: blue zone
• Subcategory 14: yellow zone
• Subcategory 15: amber zone
• Subcategory 16: red zone
• Subcategory 17: red zone, did not apply ATO risk methodology or calculate tax impact.

Enter the relevant subcategory number in the RTP Category C subcategory field.

In the comments section, provide for each disclosed arrangement under:

• Schedule 1, the goods or commodities sourced from Australia and sold through the marketing hub arrangement, or
• Schedule 2, the goods or services acquired through the non-core procurement hub arrangement.

If the arrangement has been subject to a review by us, provide our reference number in the Comments field. This can be found in the top right corner of correspondence from us related to the review.

If the arrangement has been discussed with us, outside of a formal review product, provide details of the discussion in the Comments field.

Question 10

Has your entity excluded from its thin capitalisation calculations of debt capital any value of a debt interest that has been treated wholly, or partly, as equity under accounting standards?

See, Taxpayer Alert TA 2016/9 and Taxation Determination TD 2020/2 for more guidance.

Question 11

Is your entity currently involved in cross-border, round robin financing arrangements using an arrangement, or variation of an arrangement, described in Taxpayer Alert TA 2016/10?

Question 12

Was your entity party to an arrangement separating an integrated trading business into parts that results in trading income being re-characterised into more favourably taxed passive income?

See, Taxpayer Alert TA 2017/1 for more guidance.

Question 13

Has your entity claimed the R&D tax incentive using an arrangement, or variation of an arrangement, described in the subcategories below?

• Subcategory 1: Taxpayer Alert TA 2017/2 (construction activities)
• Subcategory 2: Taxpayer Alert TA 2017/3 (any business activities)
• Subcategory 3: Taxpayer Alert TA 2017/4 (agricultural activities)
• Subcategory 4: Taxpayer Alert TA 2017/5 (software development activities)
• Subcategory 5: More than one of the above taxpayer alert subcategories applies.

Enter the relevant subcategory number in the RTP Category C subcategory field.

If more than one taxpayer alert subcategory applies, enter the relevant taxpayer alerts in the Comments field.

Question 14

If your entity has cross-border related party finance arrangements, disclose the outcome you have self-assessed using PCG 2017/4, Schedule 1 and/or Schedule 3 for the 3 most material arrangements.

If your entity has a cross-border related party finance arrangement with a higher risk rating to the 3 already disclosed, you must also disclose this arrangement.

Each arrangement must be included as a separate disclosure on the RTP schedule.

Materiality is determined by the loan amount in Australian dollar equivalent. It should be determined using the instructions for question 11 of the International dealings schedule 2024 (IDS).

For related party debt funding arrangements under Schedule 1:

• Subcategory 1: white zone
• Subcategory 2: green zone
• Subcategory 3: blue zone
• Subcategory 4: yellow zone
• Subcategory 5: amber zone
• Subcategory 6: red zone
• Subcategory 7: red zone, if you have not applied Schedule 1.

For related party outbound interest-free loans under Schedule 3:

• Subcategory 11: white zone
• Subcategory 12: green zone
• Subcategory 13: blue zone
• Subcategory 14: yellow zone
• Subcategory 15: amber zone
• Subcategory 16: red zone
• Subcategory 17: red zone, if you have not applied Schedule 3.

Enter the relevant subcategory number in the RTP Category C subcategory field.

For each of the arrangements disclosed, provide in the Comment field:

• the currency of the loan
• the rate of interest (if variable, the base rate and margin)
• the Australian dollar equivalent loan amount
• if the arrangement is an outbound or inbound loan
• If the arrangement has been subject to any review by us, provide our reference number. This can be found in the top right corner of correspondence from us related to the review. If the arrangement has been discussed with us outside a formal review product, provide details of the discussion.

Question 15

Question removed as the information is collected through other means.

Question 16

Question removed.

Question 17

At any stage during the income year, did your entity have cross-border financing arrangements with an international related party (including back-to-back arrangements through third parties) where it claimed a tax deduction for interest, or an amount in the nature of interest, and interest withholding tax wasn't remitted because a withholding tax liability isn't expected to arise within the next 18 months.

See, Taxpayer Alert TA 2018/4 for more guidance.

Question 18

Question removed as the information is collected through other means.

Question 19

If your entity has reached a formal settlement agreement or future compliance arrangement with us that applies to the current income year, disclose the outcome of your entity's terms of agreement using the following subcategories:

• Subcategory 1: your entity breached one or more of the terms of the settlement deed or future compliance arrangement.
• Subcategory 2: changes in the relevant and material facts, as disclosed in the deed or arrangement, have occurred.
• Subcategory 3: your entity is compliant with the terms of settlement deed or future compliance agreement.

Enter the relevant subcategory number in the RTP Category C subcategory field. Enter the number 1 if both 1 and 2 subcategories apply.

In the Comment field, provide details of the circumstances relevant to the subcategory and provide our reference number for the settlement agreement or forward compliance arrangement. This can be found in the top right corner of correspondence from us related to the settlement or agreement.

Question 20

Question removed as the information is collected through other means.

Question 21

Are you aware of any unamended mistakes or omissions in any single tax return lodged by your entity within 4 years of the lodgment date of this RTP schedule where, if all mistakes or omissions in that return are amended, it would result in either:

• more than $1.5 million in tax being payable (or would have been payable had it not been offset, for example by losses from prior years)
• more than $5 million in losses (including capital losses).

For the purposes of this calculation, only count mistakes and omissions your entity hasn't previously notified us of.

In the Comments field, provide details of the mistakes or omissions, the:

• tax returns the mistakes or omissions applies to
• nature of the mistakes or omissions
• amount of tax payable or losses the mistakes or omissions would result in.

Question 22

If your entity has restructured out of any arrangements in the current year to which the hybrid mismatch rules applied, or would have applied had the arrangements remained in place, disclose the subcategory that describes your entity's current position:

• Subcategory 1: all restructured arrangements qualify as low risk under Practical Compliance Guideline PCG 2018/7
• Subcategory 2: one or more of the restructured arrangements don't qualify as low risk under Practical Compliance Guideline PCG 2018/7.

In considering whether the hybrid mismatch rules would apply you must disregard dual inclusion income.

Enter the relevant subcategory number in the RTP Category C subcategory field.

For arrangements that are not low risk, in the Comment field provide:

• details of the restructured arrangement
• basis on which the arrangement didn't qualify as low risk under PCG 2018/7.

Question 23

If your entity has related party derivative arrangements, disclose the outcome you have self-assessed using PCG 2017/4, Schedule 2 for the 3 most material arrangements.

If your entity has a related party derivative arrangement with a higher risk rating than the 3 already disclosed, you must also disclose this arrangement.

Each arrangement must be included as a separate disclosure on the RTP schedule.

Materiality is determined by the hedged item amount in Australian dollar equivalent.

• Subcategory 1: white zone
• Subcategory 2: green zone
• Subcategory 3: blue zone
• Subcategory 4: yellow zone
• Subcategory 5: amber zone
• Subcategory 6: red zone
• Subcategory 7: red zone, if you have not applied Schedule 2.

Enter the relevant subcategory number in the RTP Category C subcategory field.

In the Comment field for each red and amber arrangement disclosed, provide the:

• underlying transaction hedged by the derivative, including the loan quantum in Australian dollar equivalent
• commercial and operational reasons for borrowing in a foreign currency
• name and location of the counterparty for the derivative and hedged item.

Question 24

If your entity has related party dealings involving inbound distribution arrangements, in the RTP Category C subcategory field enter either:

• 9 – where your entity hasn't self-assessed the risk zone of the arrangements using PCG 2019/1
  • If your entity has adopted the distributor simplified transfer pricing record keeping option in PCG 2017/2, record PCG 2017/2 applied in the Comments field.
  • If paragraph 49 of PCG 2019/1 applies to your entity's arrangements, record in the Comments field which exclusion categories (from paragraph 49) apply.
• The appropriate number from the table below, where your entity has self-assessed the risk zone of the arrangements using PCG 2019/1.

Select the industry sector you believe best describes your entity. If the schedule for this industry sector has different categories of activities that generate value, select the one you believe best reflects the inbound distribution arrangement.

Calculate your entity's 5-year weighted average EBIT margin based on financial information without making adjustments for comparability purposes. This reflects how the profit markers in PCG 2019/1 have been constructed.

If your entity hasn't lodged tax returns for each of the 5 preceding income years, calculate the EBIT margin on a weighted average over the preceding years of consecutive lodgements.

If your entity has an inbound distribution arrangement but you can’t determine an EBIT margin for the arrangement, answer with Subcategory 9 indicating you did not apply PCG 2019/1. Provide the reason you couldn't determine the EBIT margin in the Comments field.

Question 25

Has your entity claimed deductions for expenses incurred under arrangements with offshore related or unrelated parties and used intangible assets held by an offshore party in connection with these arrangements, where the arrangements don't appropriately recognise an amount as consideration for the use of the intangible assets.

Enter the number one (1) in the RTP Category C subcategory field.

Has your entity claimed deductions for expenses incurred under arrangements with offshore related parties and used intangible assets held by an offshore related party in connection with these arrangements, where one of the following subcategories applies:

• Subcategory 2: your entity hasn't applied the arm’s length principle in determining the appropriate consideration for the use of the intangible assets.
• Subcategory 3: your entity has considered the arm’s length principle in determining the appropriate consideration for the use of the intangible assets, but the arrangement is not covered by section 284–255 (Taxation Administration Act 1953) compliant transfer pricing documentation.

Enter the relevant subcategory number in the RTP Category C subcategory field.

If multiple subcategories apply to a single arrangement, record the lowest subcategory. For example, if both subcategories 1 and 2 apply, record subcategory 1.

If your entity has more than one arrangement you will need to disclose each arrangement separately, unless the criteria for treating similar arrangements or transactions as a single position apply. In this case, record the number of arrangements in the Comments field.

For more guidance, see Taxpayer Alert TA 2018/2.

Question 26

If your entity is a multiple entry consolidated (MEC) group, has it entered into arrangements, or variation of arrangements, described in Taxpayer Alert TA 2019/1, where a group CGT asset (with a large unrealised capital gain) is sold through an eligible tier 1 company (with significant intra-group debt), which is subsequently sold to a third party who undertakes to extinguish the intra-group debt?

Question 27

Question removed as information is collected through other means.

Question 28

If your entity is a private company that is the head entity of a consolidated group, did any of the consolidated group members (including the head entity) make a loan to the head entity's shareholders or their associates that are external to the consolidated group where all of the following apply:

• the loan is not compliant with the terms of section 109N
• the loan was not repaid by the lodgment date
• no statement has been provided to the recipient advising of a deemed dividend.

For more guidance, see Taxation Determinations TD 2004/68 and TD 2018/13.

Question 29

Has your entity been part of an arrangement described by either:

• Subcategory 1: Your entity has subscribed for a controlling share of units in a unit trust (where they did not own a controlling share in the prior year), which had a debt to another party that was the trust’s associate before the subscription and where the proceeds of the subscription were used to repay the debt?
• Subcategory 2: Your entity has or had an associate unit trust which, in the current or 4 previous income years, transferred assets into a second unit trust relying on CGT rollover relief under Subdivision 126–G of Income Tax Assessment Act 1997 (ITAA 1997), and where the unitholdings in the second trust have subsequently changed to the extent that it is no longer your associate?

See, Taxpayer Alert TA 2019/2 for more guidance.

Enter the relevant subcategory number in the RTP Category C subcategory field.

Enter the number 2 if both subcategories apply.

Question 30

Question removed.

Question 31

In the current, or 4 prior income years, has your entity, or an entity your entity controls, claimed a full credit or offset for foreign income tax paid where less than 100% of the related foreign income (including capital gains) is included in their Australian assessable income?

See, ATO Interpretative Decision ATO ID 2010/175 for more guidance.

Question 32

Question removed due to new advice and guidance and replaced with questions 44 and 45.

Question 33

Has your entity entered into any arrangements or schemes, or variation of arrangements, described in Taxpayer Alert TA 2020/2, where the structure used by foreign investors to invest directly into an Australian business has been mischaracterised?

In the Comments field, provide:

• the foreign investor's identity
• a brief description of what features, if any, aren't consistent with vanilla debt or equity investments
• a brief explanation of how the investment provides the foreign investor with any direct exposure to the economic return from a particular business or assets exploited in the business.

Question 34

Has your entity entered into any arrangements, or variation of arrangements with a non-resident related party, described in Taxpayer Alert TA 2020/3 and claimed a deduction for interest expenses under that arrangement?

Question 35

Has your entity either:

• Subcategory 1: entered into an arrangement, or a variation of an arrangement, described in Taxpayer Alert TA 2020/4 involving the transfer of assets within a MEC group and an ET-1 company leaving the MEC group or an ET-1 company anticipated to the leave the MEC group in future?
• Subcategory 2: entered into an arrangement, or a variation of an arrangement, involving the transfer of assets within a MEC group and an ET-1 company leaving the MEC group or an ET-1 company anticipated to leave the MEC group in the future?
• Subcategory 3: entered into an arrangement where 1 or more companies became an ET-1 company and there was a transfer of assets to any of those ET-1 companies?

Question 36

Has your entity entered into any arrangements, or variation of arrangements, described in Taxpayer Alert TA 2020/5 and obtained imputation benefits relating to a parcel of Australian shares it holds (either directly or indirectly) where it has offset its economic exposure to those shares, or an Australian equities index, through the use of derivative instruments?

Question 37

Question removed due to legislative changes.

Question 38

Question has been removed.

Question 39

Has your entity made payments to an entity that is a member of your entity's Division 832 control groups and those payments would, prior to the application of Subdivision 832-H, result in an income tax deduction in the current income year?

Disclose the outcome you have self-assessed using Practical Compliance Guideline PCG 2021/5.

• Subcategory 1: white zone
• Subcategory 2: green zone
• Subcategory 3: blue zone
• Subcategory 4: yellow zone
• Subcategory 5: amber zone
• Subcategory 6: red zone 1
• Subcategory 7: red zone 2
• Subcategory 8: red zone, if you have not applied PCG 2021/5.

Enter the relevant subcategory number in the RTP Category C subcategory field.

In the Comments field, provide:

• if the arrangement is rated red or amber, the reason the arrangement falls in that zone
• if subcategory 8 applies, the reason you didn't apply the PCG.

Question 40

Has your entity entered into any arrangement with a related overseas entity as described in Taxpayer Alert TA 2021/2 involving the inflow of funds to Australia as a gift or an advance of funds by way of a loan? If the advance of funds was by way of a loan, disclose the arrangement only where one or more of the following applies:

• there has been no repayment of the loan
• the repayments made were less than the interest incurred
• the loan has been refinanced to the same related overseas entity or an associate.

Question 41

During the year, did your entity:

• enter into an arrangement, or variation of an arrangement, as described in Taxpayer Alert TA 2022/2
• obtain a reduced withholding tax rate under one of Australia's double tax agreements in relation to royalty or unfranked dividend payments arising from an arrangement, or variation of an arrangement, described in TA 2022/2 entered into on or after 1 July 2021.

Question 42

Has your entity treated global intangible low-taxed income (GILTI) as 'subject to foreign income tax' in the United States under section 832–130 of the Income Tax Assessment Act 1997?

See, Taxation Determination TD 2022/9, for more guidance.

In the Comments field please provide the:

• amount of GILTI your entity has used to reduce the amount of its deduction/non-inclusion mismatches
• amount of GILTI your entity has treated as dual inclusion income
• subsection of section 832–130 your entity treated GILTI as 'subject to foreign income tax' in the United States, subsection 832–130(5), subsection 832–130(1) or both.

Question 43

Has your entity participated in any arrangements where the profits of a private company have been accessed in a tax-free form (that is, without an additional tax liability) by arranging for the profits to be passed to your entity or another participant through an interposed holding company using an arrangement, or variation of an arrangement, described in Taxpayer Alert TA 2023/1?

Question 44

If your entity has any international related party Intangibles Migration Arrangements that involved a Migration of intangible assets in the current income year (within the meaning set out in paragraph 3 of Practical Compliance Guidance PCG 2024/1), and the Migration arrangement is not an Excluded Intangibles Arrangement (see paragraph 39 of Practical Compliance Guidance PCG 2024/1) disclose the risk rating you have self-assessed under Table 1 of the Risk Assessment Framework in Practical Compliance Guidance PCG 2024/1 for the 3 most material Migration arrangements.

If in the current year, your entity has entered into one or more Migration arrangements with a higher risk rating under Table 1 of the Risk Assessment Framework than the 3 most material arrangements disclosed, you must also disclose each of those other arrangements.

Each arrangement must be included as a separate disclosure on the RTP schedule.

Materiality is determined using the instructions to question 17 of the International dealings schedule.

If you are making a disclosure in question 17 of the IDS regarding a restructuring event which is also an Intangibles Migration Arrangement (within the meaning of Practical Compliance Guidance PCG 2024/1), you can refer to that as one of your disclosures and make the relevant reference in the comments section.

Enter the relevant subcategory number in the RTP Category C subcategory field:

• Subcategory 1: Green (lower risk)
• Subcategory 2: Blue (lower to medium risk)
• Subcategory 3: Amber (medium risk)
• Subcategory 4: Red (higher risk)
• Subcategory 5: White Zone
• Subcategory 6: high risk, if you have not applied PCG 2024/1
• Subcategory 7: December early balancing taxpayer with insufficient time to complete an assessment of your entity’s current Migration arrangements.

Note: if an Intangibles Migration Arrangement has been disclosed in question 17 of the IDS and you refer to that disclosure in your RTP schedule you do not need to provide the below details to the extent you have already disclosed them in the IDS.

In the Comments field for each disclosed arrangement:

• provide a summary of each arrangement, including the type of arrangement (for example, a sale or licence) and the entities involved
• provide a summary of the intangible assets involved in each arrangement including a summary of the key connected DEMPE activities
• indicate whether the arrangement has been disclosed in question 17 of the IDS in the current income year.

If Subcategory 7 applies, in addition to the above information, in the Comments field provide further information on the reasons why there is insufficient time to complete the assessment.

Question 45

Other than Excluded Intangibles Arrangements (as defined in paragraph 39 of Practical Compliance Guidance PCG 2024/1), if your entity has any international related party Intangibles Migration Arrangements in the current year that did not involve a Migration of intangible assets in the current year (within the meaning set out in paragraph 3 of PCG 2024/1), disclose whether any of those arrangements is connected with a prior Migration of intangible assets held by your entity in the last 5 years?

Enter the relevant subcategory number in the RTP Category C subcategory field.

• Subcategory 1: Yes – one or more current arrangements are connected with a prior Migration
• Subcategory 2: No – none of the current arrangements are connected with a prior Migration
• Subcategory 3: Don’t know whether one or more current arrangements are connected to a prior Migration
• Subcategory 4: high risk, if you have not applied PCG 2024/1
• Subcategory 5: December early balancing taxpayer with insufficient time to complete an assessment of the connection between your entity’s current arrangements and a prior Migration.

Note: if the prior Migration arrangement has been disclosed in question 17 of the IDS, you do not need to provide the below details to the extent you have already disclosed them in the IDS.

If Subcategory 1 applies, in the Comments field provide for both the current arrangement and any connected past Migration of intangible assets:

• provide a summary of each arrangement, including type of arrangement (for example, sale or licence) and the entities involved
• provide a summary of the intangible assets involved in each arrangement including a summary of the key connected DEMPE activities
• whether the arrangement has been disclosed in question 17 of the IDS and the income year the disclosure was made.

If Subcategory 5 applies, in the comments field provide further information on the reasons why there is insufficient time to complete the assessment.

The PDF schedule field accepts 3,000 characters or approximately 500 words. You can attach additional information if required.

Continue to: Section D: Declaration and signature

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