Document ID: chunk:federal_register_of_legislation:C2025C00029:section:6:p14
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 6 (pt 14/22)
Character Range: 6975956–6979088

all of its members. It declares $1,500 of the distribution to be conduit foreign income for its 7,500 foreign membership interests (20 cents per membership interest or 40% of each distribution) and none for its Australian membership interests.
 AusCo is taken to have declared the same proportion (40% of each distribution) of conduit foreign income for its Australian membership interests (which amounts to $500 of conduit foreign income). It is therefore taken to have declared $2,000 of conduit foreign income. This is an over‑declaration of $200 and a penalty under section 288‑80 in Schedule 1 to the Taxation Administration Act 1953 will apply.
 (3) For the purposes of subsection (2), ignore *membership interests and *non‑share equity interests that do not carry a right to receive *distributions (other than distributions on winding up).
 (4) Despite subsection (2), an entity that receives a *frankable distribution that has an *unfranked part is entitled to rely on the *distribution statement made by the entity that made the distribution.

Division 815—Cross‑border transfer pricing

Table of Subdivisions
815‑A Treaty‑equivalent cross‑border transfer pricing rules
815‑B Arm's length principle for cross‑border conditions between entities
815‑C Arm's length principle for permanent establishments
815‑D Special rules for trusts and partnerships
815‑E Reporting obligations for country by country reporting entities

Subdivision 815‑A—Treaty‑equivalent cross‑border transfer pricing rules

Guide to Subdivision 815‑A

815‑1  What this Subdivision is about
      The cross‑border transfer pricing rules in this Subdivision are equivalent to, but independent of, the transfer pricing rules in Australia's double tax agreements.

Table of sections

Operative provisions
815‑5 Object
815‑10 Transfer pricing benefit may be negated
815‑15 When an entity gets a transfer pricing benefit
815‑20 Cross‑border transfer pricing guidance
815‑25 Modified transfer pricing benefit for thin capitalisation
815‑30 Determinations negating transfer pricing benefit
815‑35 Consequential adjustments
815‑40 No double taxation

Operative provisions

815‑5  Object
  The object of this Subdivision is to ensure the following amounts are appropriately brought to tax in Australia, consistent with the arm's length principle:
 (a) profits which would have accrued to an Australian entity if it had been dealing at *arm's length, but, by reason of non‑arm's length conditions operating between the entity and its foreign associated entities, have not so accrued;
 (b) profits which an Australian permanent establishment (within the meaning of the relevant *international tax agreement) of a foreign entity might have been expected to make if it were a distinct and separate entity engaged in the same or similar activities under the same or similar conditions, but dealing wholly independently.

815‑10  Transfer pricing benefit may be negated
 (1) The Commissioner may make a determination mentioned in subsection 815‑30(1), in writing, for the purpose of negating a *transfer pricing benefit an entity gets.

Treaty requirement
 (2) However,