Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) Subject to this Division, for the purposes of this Part, the following amounts are tainted sales income of a company of a statutory accounting period:
(a) income from the sale of goods by the company where all of the following conditions are satisfied:
(i) the goods were sold to the company by another entity;
(ii) either of the following sub - subparagraphs applies at the time of the sale of the goods to the company:
(A) the seller of the goods to the company was an associate of the company and a Part X Australian resident;
(B) the goods were sold to the company by an associate of the company who was not a Part X Australian resident, in the course of a business carried on by the associate at or through a permanent establishment of the associate in Australia;
(iii) if the goods were altered by the company--the income does not pass the substantial alteration test set out in subsection (4);
(b) income from the sale of goods by the company where all of the following conditions are satisfied:
(i) the goods were sold to the company by another entity;
(ii) either of the following sub - subparagraphs applies at the time of the purchase of the goods from the company:
(A) the purchaser of the goods from the company was an associate of the company and a Part X Australian resident;
(B) the purchaser of the goods from the company was an associate of the company who was not a Part X Australian resident and the purchase was made in the course of a business carried on by the purchaser at or through a permanent establishment of the purchaser in Australia;
(iii) if the goods were altered by the company--the income does not pass the substantial alteration test set out in subsection (4);
(c) income from the sale of goods (in this paragraph called the manufactured goods ) by the company where all of the following conditions are satisfied:
(i) the manufactured goods were manufactured by the company;
(ii) any of the raw materials or goods from which the manufactured goods were manufactured were sold to the company by another entity;
(iii) either of the following sub - subparagraphs applies at the time of the sale to the company of the raw materials or goods from which the manufactured goods were manufactured:
(A) the entity who sold to the company the raw materials or goods from which the manufactured goods were manufactured was an associate of the company and a Part X Australian resident;
(B) the raw materials or goods from which the manufactured goods were manufactured were sold to the company by an associate of the company who was not a Part X Australian resident, in the course of a business carried on by the associate at or through a permanent establishment of the associate in Australia;
(iv) the income does not pass the substantial manufacture test set out in subsection (4A);
(d) income from the sale of goods (in this paragraph called the manufactured goods ) by the company where all of the following conditions are satisfied:
(i) the manufactured goods were manufactured by the company;
(ii) any of the raw materials or goods from which the manufactured goods were manufactured were sold to the company by another entity;
(iii) either of the following sub - subparagraphs applies at the time of the purchase of the manufactured goods from the company:
(A) the purchaser of the manufactured goods from the company was an associate of the company and a Part X Australian resident;
(B) the purchaser of the manufactured goods from the company was an associate of the company who was not a Part X Australian resident and the purchase was made in the course of a business carried on by the purchaser at or through a permanent establishment of the purchaser in Australia;
(iv) the income does not pass the substantial manufacture test set out in subsection (4A);
(e) income from the sale of goods (in this paragraph called the primary production goods ) by the company where all of the following conditions are satisfied:
(i) the primary production goods were:
(A) primary products produced, raised or grown by the company; or
(B) goods manufactured by the company, in whole or in part, from primary products produced, raised or grown by the company;
(ii) any of the propagative material from which the primary products were produced, raised or grown was sold to the company by another entity;
(iii) either of the following sub - subparagraphs applies at the time of the sale to the company of the propagative material:
(A) the entity who sold the propagative material to the company was an associate of the company and a Part X Australian resident;
(B) the propagative material was sold to the company by an associate of the company who was not a Part X Australian resident, in the course of a business carried on by the associate at or through a permanent establishment of the associate in Australia;
(iv) the income does not pass the substantial production test set out in subsection (4B);
(f) income from the sale of goods (in this paragraph called the primary production goods ) by the company where all of the following conditions are satisfied:
(i) the primary production goods were:
(A) primary products produced, raised or grown by the company; or
(B) goods manufactured by the company, in whole or in part, from primary products produced, raised or grown by the company;
(ii) any of the propagative material from which the primary products were produced, raised or grown was sold to the company by another entity;
(iii) either of the following sub - subparagraphs applies at the time of the purchase of the primary production goods from the company:
(A) the purchaser of the primary production goods from the company was an associate of the company and a Part X Australian resident;
(B) the purchaser of the primary production goods from the company was an associate of the company who was not a Part X Australian resident and the purchase was made in the course of a business carried on by the purchaser at or through a permanent establishment of the purchaser in Australia;
(iv) the income does not pass the substantial production test set out in subsection (4B).
(2) Where:
(a) a company provides any of the following services:
(i) drinks and meals;
(ii) accommodation in a hotel, motel, guest - house or similar place;
(iii) the provision of, or the use of facilities for, entertainment, recreation or instruction; and
(b) if subparagraph (a)(ii) or (iii) applies--the transaction for the provision of the services includes the sale of goods of a kind that are commonly supplied in connection with the services concerned;
the tainted sales income of the company does not include income from the sale of:
(c) if subparagraph (a)(i) applies--the drink or food concerned; or
(d) if subparagraph (a)(ii) or (iii) applies--the goods referred to in paragraph (b).
(3) The tainted sales income of a company of a statutory accounting period does not include passive income of the company of the statutory accounting period.
(4) For the purposes of this section, income from the sale of goods by a company passes the substantial alteration test if:
(a) the company substantially altered the goods; and
(b) a substantial part of that alteration was carried out by the directors or employees of the company.
(4A) For the purposes of this section, income from the sale of goods by a company passes the substantial manufacture test if a substantial part of the manufacture of the goods was carried out by the directors or employees of the company.
(4B) For the purposes of this section, income from the sale of goods by a company passes the substantial production test if:
(a) if the goods are primary products--a substantial part of the production, raising or growing of the goods was carried out by the directors or employees of the company; or
(b) if the goods are manufactured by the company, in whole or in part, from primary products produced, raised or grown by the company--a substantial part of:
(i) the manufacture of the goods; and
(ii) those production, raising or growing activities;
was carried out by the directors or employees of the company.
(4C) For the purposes of subsections (4), (4A) and (4B), the effect of an activity on the market value of the goods concerned is to be ignored.
(5) If, apart from this subsection, goods are purchased or sold by 2 or more entities acting jointly, subsection (1) is to be applied successively as if each such entity were the sole purchaser or seller, as the case may be.
(6) In this section:
"animals" includes fish.
"primary products" means:
(a) agricultural or horticultural produce; or
(b) trees or crops, whether on or attached to land or not; or
(c) timber; or
(d) animals (whether dead or alive); or
(e) the bodily produce (including natural increase) of animals.