Document ID: chunk:federal_register_of_legislation:C2013A00101:clause:2_2:p2
Version: federal_register_of_legislation:C2013A00101
Segment Type: clause
Provision Reference: sch 2 cl 2 (pt 2/3)
Character Range: 12380–15273

purposes covered by this subsection are:
 (a) if the *transfer pricing benefit arises under subparagraph 815‑120(1)(c)(i)—working out the amount (if any) of the entity's taxable income for the income year; and
 (b) if the transfer pricing benefit arises under subparagraph 815‑120(1)(c)(ii)—working out the amount (if any) of the entity's loss of a particular *sort for the income year; and
 (c) if the transfer pricing benefit arises under subparagraph 815‑120(1)(c)(iii)—working out the amount (if any) of the entity's *tax offsets for the income year; and
 (d) if the transfer pricing benefit arises under subparagraph 815‑120(1)(c)(iv)—working out the amount (if any) of *withholding tax payable by the entity in respect of interest or royalties.

815‑120  When an entity gets a transfer pricing benefit
 (1) An entity gets a transfer pricing benefit from conditions that operate between the entity and another entity in connection with their commercial or financial relations if:
 (a) those conditions (the actual conditions) differ from the *arm's length conditions; and
 (b) the actual conditions satisfy the cross‑border test in subsection (3) for the entity; and
 (c) had the arm's length conditions operated, instead of the actual conditions, 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;
 (iv) an amount of *withholding tax payable in respect of interest or royalties by the entity would be greater.

Absence of condition
 (2) For the purposes of subsection (1), there is taken to be a difference between the actual conditions and the *arm's length conditions if:
 (a) an actual condition exists that is not one of the arm's length conditions; or
 (b) a condition does not exist in the actual conditions but is one of the arm's length conditions.

Cross‑border test
 (3) Conditions that operate between an entity and another entity in connection with their commercial or financial relations satisfy the cross‑border test if:
 (a) the conditions meet the overseas requirement in the following table for either or both of the entities; or
 (b) the conditions operate in connection with a *business that the entity carries on in an *area covered by an international tax sharing treaty.

Overseas requirement
Item                  Column 1                                                                                                                                                                Column 2
                      The conditions meet the overseas requirement for this type of entity:                                                                                                   if: