Income Tax Assessment Act 1997



Division 815 - Cross-border transfer pricing  

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

Operative provisions

SECTION 815-140   Modification for thin capitalisation  

This section modifies the way an entity to which section 815-115 applies works out its taxable income, or its loss of a particular *sort, for an income year, if:

(a) Division 820 (about thin capitalisation) applies to the entity for the income year; and

(b) the *arm ' s length conditions affect costs that are *debt deductions of the entity for the income year.

If working out what those costs would be if the *arm ' s length conditions had operated involves applying a rate to a *debt interest:

(a) work out the rate as if the arm ' s length conditions had operated; but

(b) apply the rate to the debt interest the entity actually issued.


Division 820 may apply to reduce or further reduce debt deductions.


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