Document ID: chunk:federal_register_of_legislation:C2004A00897:clause:1_3:p4
Version: federal_register_of_legislation:C2004A00897
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 4/5)
Character Range: 97241–100055

Australian business;
 (e) the profit (within the meaning of the *accounting standards or any other accounting standards that would otherwise apply to the entity), and the return on capital, whether during that year or at any other time, of:
 (i) the entity; and
 (ii) the entity in relation to the Australian business;
 (f) the commercial practices adopted by independent parties dealing with each other at arm's length in the industry in which the entity carries on the Australian business throughout that year (whether in Australia or in comparable markets elsewhere);
 (g) the general state of the Australian economy throughout that year;
 (h) any other factors which are specified in the regulations made for the purposes of this section.

Commissioner's power

 (4) If the Commissioner considers an amount worked out by the entity under this section does not appropriately take into account the factual assumptions and the relevant factors, the Commissioner may substitute another amount that the Commissioner considers better reflects those assumptions and factors.

820‑415  Amount of debt deduction disallowed

  The amount of *debt deduction disallowed under subsection 820‑395(1) is worked out using the following formula:
where:

average debt means the average value, for the income year, of all the *debt capital of the entity that gives rise to *debt deductions of the entity (other than *allowable OB deductions) for that or any other income year.

capital shortfall means the amount by which the entity's *average equity capital for that year (see subsection 820‑395(3)) is less than the entity's *minimum capital amount for that year.

debt deduction means each *debt deduction of the entity (other than *allowable OB deduction) for the income year.

820‑420  Application to part year periods

 (1) This subsection disallows all or a part of each *debt deduction of an entity for an income year that is an amount incurred by the entity during a period that is a part of that year if, for that period:
 (a) the entity is an *inward investing entity (ADI); and
 (b) the entity's *average equity capital is less than its *minimum capital amount;
to the extent that the debt deduction:
 (c) is attributable to an *Australian permanent establishment of the entity at or through which it carries on its banking business; and
 (d) is not an *allowable OB deduction.

Note: To determine whether an entity is an inward investing entity (ADI) for that period, see subsection 820‑395(2).

 (2) The entity's average equity capital for that period is the sum of the following:
 (a) the average value, for that period, of the *equity capital of the entity that:
 (i) is attributable to its *Australian permanent establishments at or through which it carries on its banking business in Australia; but
 (ii) has