Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 815.130

Basic rule

  (1)   The identification of the * arm's length conditions must:

  (a)   be based on the commercial or financial relations in connection with which the actual conditions operate; and

  (b)   have regard to both the form and substance of those relations.

Exceptions

  (2)   Despite paragraph   (1)(b), disregard the form of the actual commercial or financial relations to the extent (if any) that it is inconsistent with the substance of those relations.

  (3)   Despite subsection   (1), if:

  (a)   independent entities dealing wholly independently with one another in comparable circumstances would not have entered into the actual commercial or financial relations; and

  (b)   independent entities dealing wholly independently with one another in comparable circumstances would have entered into other commercial or financial relations; and

  (c)   those other commercial or financial relations differ in substance from the actual commercial or financial relations;

the identification of the * arm's length conditions must be based on those other commercial or financial relations.

  (4)   Despite subsection   (1), if independent entities dealing wholly independently with one another in comparable circumstances would not have entered into commercial or financial relations, the identification of the * arm's length conditions is to be based on that absence of commercial or financial relations.

  (5)   Subsections   815 - 125(3) and (4) (about comparability of circumstances) apply for the purposes of this section.