Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 820.54

  (1)   The GR group net third party interest expense , for a period, of a * GR group for the period, is the amount that would be the group's * financial statement net third party interest expense for the period, if:

  (a)   where paragraph   820 - 53(2)(a) applies--the * audited consolidated financial statements for the period for the * GR group parent for the period of the group were prepared on the basis that the following were treated as interest:

  (i)   an amount in the nature of interest;

  (ii)   any other amount that is economically equivalent to interest; or

  (b)   where paragraph   820 - 53(2)(b) applies--the * global financial statements for the period for the GR group parent for the period of the group were prepared on the basis that the following were treated as interest:

  (i)   an amount in the nature of interest;

  (ii)   any other amount that is economically equivalent to interest.

  (2)   The financial statement net third party interest expense , for a period, of a * GR group for the period, is:

  (a)   the amount of the * GR group's net third party interest expense for the period, as disclosed in the following statements:

  (i)   if paragraph   820 - 53(2)(a) applies--the * audited consolidated financial statements for the * GR group parent for the period for the GR group;

  (ii)   if paragraph   820 - 53(2)(b) applies--the * global financial statements for the GR group parent for the period for the GR group;

    reduced by the amount of each payment (if any) covered by subsection   (3), to the extent that it was a factor in working out that net third party interest expense; or

  (b)   if those statements do not disclose that net third party interest expense--the amount worked out as follows:

  (i)   first, identify the amount of the group's third party interest expenses for the period disclosed in those statements;

  (ii)   next, reduce the result of subparagraph   (i) by the amount of each payment (if any) covered by subsection   (3), to the extent that it was a factor in working out those third party interest expenses;

  (iii)   next, reduce the result of subparagraph   (ii) by the amount of the group's third party interest income for the period disclosed in those statements;

  (iv)   next, increase the result of subparagraph   (iii) by the amount of each payment (if any) covered by subsection   (3), to the extent that it was a factor in working out that third party interest income.

  (3)   For the purposes of subsection   (2), this subsection covers a payment if:

  (a)   the payment is made by an entity to an * associate entity of the entity; and

  (b)   either:

  (i)   the entity is a * GR group member for the period of the * GR group and the associate entity is not such a GR group member; or

  (ii)   the entity is not a GR group member for the period of the GR group and the associate entity is such a GR group member.

  (4)   The adjusted net third party interest expense , for a period, of an entity or a * GR group is:

  (a)   for an entity--the amount that would be the entity's net interest expense for the period if the following payments were disregarded:

  (i)   a payment that is made by the entity to an * associate entity of the entity;

  (ii)   a payment that is made by an associate entity of the entity to the entity; or

  (b)   for a GR group--the amount that would be the GR group's net interest expense for the period if the following payments were disregarded:

  (i)   a payment that is made by a * GR group member of the GR group to an associate entity of any GR group member of the GR group;

  (ii)   a payment that is made by an associate entity of a GR group member of the GR group to any GR group member of the GR group.

  (5)   For the purposes of subsections   (3) and (4), in determining whether an entity is an associate entity of another entity:

  (aa)   disregard the requirement in subsections   820 - 905(1) and (2A) that the entity is an * associate of the other entity, unless only paragraph   820 - 905(1)(b) applies; and

  (a)   treat the references in paragraphs   820 - 905(1)(a) and 820 - 905(2A)(a) to "an * associate interest of 50% or more" as instead being a reference to "a * TC control interest of 20% or more"; and

  (b)   treat subsection   820 - 860(3) as applying for the purposes of determining whether the entity is an associate entity of the other entity (as a result of paragraph   (a) of this subsection); and

  (c)   treat the purposes mentioned in subparagraphs   820 - 870(1)(b)(i) and (ii) as including the purposes of determining whether the entity is an associate entity of the other entity (as a result of paragraph   (a) of this subsection).