Income Tax Assessment Amendment Regulations 2005 (No. 2) (75 of 2005)
Schedule 1 Amendments taken to have commenced on 1 July 2003
[2] Part 6, before Division 995
insert
Division 960 General
Subdivision 960-C Foreign currency
960-50.01 Translation of foreign currency amounts into Australian currency - modification of special translation rules
(1) The table in subsection 960-50 (6) of the Act is modified by adding after item 11 the following item:
|
12 |
an amount to which any of items 1 to 11 (inclusive) applies |
as an alternative to the result mentioned in the item, the amount may be translated into Australian currency using any of the rules set out in Schedule 2 to the Income Tax Assessment Regulations 1997. |
(2) For subsection 960-50 (8) of the Act, Schedule 2 sets out requirements in relation to the translation of amounts into Australian currency.
Subdivision 960-D Functional currency
960-80.01 Translation rules - translation into applicable functional currency
For subsection 960-80 (7) of the Act, the requirements set out in Schedule 2 in relation to the translation of amounts into Australian currency have effect in relation to the translation of amounts into the applicable functional currency as if:
(a) each reference in that Schedule to Australian currency were a reference to the applicable functional currency; and
(b) the modifications set out in the following table were made:
|
Item |
Provision |
After |
Insert |
|
1 |
Subclause 1.2 (2) |
year |
(or, if the entity is an attributable taxpayer in relation to a CFC (within the meaning of Part X of the Income Tax Assessment Act 1936) - each subsequent day in the CFC's statutory accounting period (within the meaning of that Part)) |
|
2 |
Paragraph 1.2 (3) (a) |
activities |
(or, if the entity is an attributable taxpayer in relation to a CFC (within the meaning of Part X of the Income Tax Assessment Act 1936), the use of the rate would not be appropriate having regard to the CFC's business or activities) |
960-80.02 Translation rules for an attributable taxpayer of a CFC - translation into applicable functional currency
(1) For subsection 960-80 (7) of the Act, if:
(a) an entity is an attributable taxpayer in relation to a CFC; and
(b) the CFC has prepared financial accounts in accordance with standards to which subsection 820-960 (1C) or (1D) of the Act relates; and
(c) those financial accounts translate amounts into the applicable functional currency using particular exchange rates; and
(d) the entity wishes to translate an amount into the applicable functional currency, using the exchange rate used to translate a corresponding amount in the financial accounts;
the entity must translate all amounts into the applicable functional currency using the exchange rates that were used in the financial accounts to translate corresponding amounts.
(2) In this regulation:
CFC has the meaning given by Part X of the Income Tax Assessment Act 1936.
960-80.03 Translation rules - translation from applicable functional currency into Australian currency
(1) For subsection 960-80 (7) of the Act, if, before the day on which the Income Tax Assessment Amendment Regulations 2005 (No. 2) are registered, an entity translates an amount that is not the attributable income of a CFC from the applicable functional currency into Australian currency on a day in accordance with an item of the table in subsection 960-80 (1) of the Act, the entity may translate the amount using:
(a) an exchange rate that is an average of all of the exchange rates during the period, not exceeding 12 months, in which the entity carries on the relevant business or other activity; or
(b) the exchange rate applicable on the last day of the entity's income year.
(2) For subsection 960-80 (7) of the Act, if, before the day on which the Income Tax Assessment Amendment Regulations 2005 (No. 2) are registered, an entity that is an attributable taxpayer in relation to a CFC translates an amount that is the attributable income of a CFC from the applicable functional currency into Australian currency on a day in accordance with an item of the table in subsection 960-80 (1) of the Act, the entity may translate the amount using:
(a) an exchange rate that is an average of all of the exchange rates during the period, not exceeding 12 months, in which the CFC carries on the relevant business or other activity; or
(b) the exchange rate applicable on the last day of the CFC's statutory accounting period.
(3) For subsection 960-80 (7) of the Act, if, on or after the day on which the Income Tax Assessment Amendment Regulations 2005 (No. 2) are registered, an entity translates an amount that is not the attributable income of a CFC from the applicable functional currency into Australian currency on a day in accordance with an item of the table in subsection 960-80 (1) of the Act, the entity must translate the amount using:
(a) an exchange rate that is an average of all of the exchange rates during the period, not exceeding 12 months, in which the entity carries on the relevant business or other activity; or
(b) if the entity makes an election in writing to use the exchange rate applicable on the last day of the entity's income year - that exchange rate.
(4) For subsection 960-80 (7) of the Act, if, on or after the day on which the Income Tax Assessment Amendment Regulations 2005 (No. 2) are registered, an entity that is an attributable taxpayer in relation to a CFC translates an amount that is the attributable income of a CFC from the applicable functional currency into Australian currency on a day in accordance with an item of the table in subsection 960-80 (1) of the Act, the entity must translate the amount using:
(a) an exchange rate that is an average of all of the exchange rates during the period, not exceeding 12 months, in which the CFC carries on the relevant business or other activity; or
(b) if the entity makes an election in writing to use the exchange rate applicable on the last day of the CFC's statutory accounting period - that exchange rate.
(5) An election under paragraph (3) (b) or (4) (b) is irrevocable.
(6) In this regulation:
CFC has the meaning given by Part X of the Income Tax Assessment Act 1936.
registered means registered in accordance with the Legislative Instruments Act 2003.
statutory accounting period has the meaning given by Part X of the Income Tax Assessment Act 1936.