Income Tax Assessment Act 1997
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.
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.
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.
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