Document ID: chunk:federal_register_of_legislation:C2013A00101:clause:2_2:p6
Version: federal_register_of_legislation:C2013A00101
Segment Type: clause
Provision Reference: sch 2 cl 2 (pt 6/8)
Character Range: 29068–31566

one or more of the following would, apart from this Subdivision, apply:
 (i) the amount of the entity's taxable income for an income year would be greater;
 (ii) the amount of the entity's loss of a particular *sort for an income year would be less;
 (iii) the amount of the entity's *tax offsets for an income year would be less.

Nil amounts
 (2) For the purposes of this section:
 (a) treat an entity that has no taxable income for an income year as having a taxable income for the year of a nil amount; and
 (b) treat an entity that has no loss of a particular *sort for an income year as having a loss of that sort for the year of a nil amount; and
 (c) treat an entity that has no *tax offsets for an income year as having tax offsets for the year of a nil amount.

815‑225  Meaning of arm's length profits
 (1) The arm's length profits for a *PE of an entity are worked out by allocating the actual expenditure and income of the entity between the PE and the entity so that the profits attributed to the PE equal the profits the PE might be expected to make if:
 (a) the PE were a distinct and separate entity; and
 (b) the activities and circumstances of the PE, including the functions performed, assets used and risks borne by the PE, were those of that separate entity; and
 (c) the conditions that operated between that separate entity and the entity of which it is a PE were the *arm's length conditions.
 (2) The conditions to which the *arm's length conditions mentioned in paragraph (1)(c) relate are the conditions that would operate between the separate entity and the entity of which it is a *PE if the assumptions in paragraphs (1)(a) and (b) were made.
 (3) For the purposes of subsection (1):
 (a) the actual expenditure of an entity is taken to include losses and outgoings; and
 (b) the actual income of an entity is taken to include any amount that is, or is to be, included in the entity's assessable income.

815‑230  Source rules for certain arm's length profits
 (1) The *arm's length profits for a *PE in Australia are taken, for the purposes of this Act, to be attributable to sources in Australia.
 (2) The *arm's length profits for a *PE in an *area covered by an international tax sharing treaty are taken, for the purposes of this Act, to be attributable to sources in that area.

815‑235  Guidance
 (1) For the purpose of determining the effect this Subdivision has in relation to an entity, work out *arm's length profits, and identify *arm's length conditions,