Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 7A - Distributions to entities connected with a private company  

Subdivision D - Payments and loans that are not treated as dividends  

SECTION 109M   109M   LOANS MADE IN THE ORDINARY COURSE OF BUSINESS ON ARM'S LENGTH TERMS NOT TREATED AS DIVIDENDS  

A private company is not taken under section 109D to pay a dividend because of a loan made:

(a) in the ordinary course of the private company's business; and

(b) on the usual terms on which the private company makes similar loans to parties at arm's length.