Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p13
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 13/16)
Character Range: 6762612–6765349

one or more applications of step 2 of the method statement in section 725‑365 or 725‑380.
 (3) The 2 entities are treated as not dealing with each other at *arm's length in relation to the providing of those benefits.
 (4) None of those benefits is treated as consisting of, or including, services provided or a right to have services provided.
Note: This means that the exclusions in Subdivisions 727‑C and 727‑G for indirect value shifts involving services will not apply.
 (5) Except as provided in this section, none of the following is treated as the *providing of economic benefits *in connection with the IVS scheme:
 (a) a decrease (or future decrease) in the *market value of *down interests owned by the first entity or the other entity, to the extent that the decrease is (or will be) covered by subsection 725‑155(1);
 (b) an increase (or future increase) in the market value of *up interests owned by the first entity or the other entity, to the extent that the increase is (or will be) covered by subsection 725‑145(3);
 (c) an issue of *up interests at a *discount to the first entity or the other entity, to the extent that the issue is (or will be) covered by subsection 725‑145(2).
Note: Value shifted from down interests owned by the other entity to up interests owned by the first entity are dealt with by a separate application of this Subdivision to those interests (because of paragraphs 727‑905(2)(a) and (b).

Chapter 4—International aspects of income tax

Part 4‑5—General

Division 764—Source rules

Table of Subdivisions
Guide to Division 764
764‑A Source rules

Guide to Division 764

764‑1  What this Division is about
      This Division contains a source rule for certain international tax agreements.

Subdivision 764‑A—Source rules

Table of sections
764‑5 Source rule for international tax agreements

764‑5  Source rule for international tax agreements
 (1) For the purposes of this Act, income, profits or gains have a source in Australia if:
 (a) for the purposes of an *international tax agreement, the income, profits or gains are those of a person who is a resident of a foreign country or foreign territory; and
 (b) the effect of the agreement is that the income, profits or gains may be taxed in Australia.
 (2) Subsection (1) applies in relation to *international tax agreements made on or after 28 March 2019.
Note: An international tax agreement not covered by this section may be subject to specific source rules contained in the International Tax Agreements Act 1953 or in the international tax agreement itself.
 (3) This section has effect despite any other provision of this Act (other than Part IVA of the Income Tax Assessment Act 1936).

Division 768—Foreign non‑assessable income