Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 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 .

  (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.