INCOME TAX ASSESSMENT ACT 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 815 - Cross-border transfer pricing  

Subdivision 815-B - Arm ' s length principle for cross-border conditions between entities  

Operative provisions

SECTION 815-115   Substitution of arm ' s length conditions  

815-115(1)  
For the purposes covered by subsection (2), if an entity gets a *transfer pricing benefit from conditions that operate between the entity and another entity in connection with their commercial or financial relations:


(a) those conditions are taken not to operate; and


(b) instead, the *arm ' s length conditions are taken to operate.

Note 1:

The conditions that operate include, but are not limited to, such things as price, gross margin, net profit, and the division of profit between the entities.

Note 2:

There are special rules about documentation that affect when an entity has a reasonably arguable position about the application (or non-application) of this Subdivision: see Subdivision 284-E in Schedule 1 to the Taxation Administration Act 1953 .

815-115(2)  
The purposes covered by this subsection are:


(a) if the *transfer pricing benefit arises under subparagraph 815-120(1)(c)(i) - working out the amount (if any) of the entity ' s taxable income for the income year; and


(b) if the transfer pricing benefit arises under subparagraph 815-120(1)(c)(ii) - working out the amount (if any) of the entity ' s loss of a particular *sort for the income year; and


(c) if the transfer pricing benefit arises under subparagraph 815-120(1)(c)(iii) - working out the amount (if any) of the entity ' s *tax offsets for the income year; and


(d) if the transfer pricing benefit arises under subparagraph 815-120(1)(c)(iv) - working out the amount (if any) of *withholding tax payable by the entity in respect of interest or royalties.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.