Income Tax Assessment Act 1997
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. 815-140(2)
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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