Document ID: chunk:federal_register_of_legislation:C2025C00014:section:447:p3
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 447 (pt 3/4)
Character Range: 2071309–2074031

by the associate at or through a permanent establishment of the associate in Australia;
 (iv) the income does not pass the substantial production test set out in subsection (4B);
 (f) income from the sale of goods (in this paragraph called the primary production goods) by the company where all of the following conditions are satisfied:
 (i) the primary production goods were:
 (A) primary products produced, raised or grown by the company; or
 (B) goods manufactured by the company, in whole or in part, from primary products produced, raised or grown by the company;
 (ii) any of the propagative material from which the primary products were produced, raised or grown was sold to the company by another entity;
 (iii) either of the following sub‑subparagraphs applies at the time of the purchase of the primary production goods from the company:
 (A) the purchaser of the primary production goods from the company was an associate of the company and a Part X Australian resident;
 (B) the purchaser of the primary production goods from the company was an associate of the company who was not a Part X Australian resident and the purchase was made in the course of a business carried on by the purchaser at or through a permanent establishment of the purchaser in Australia;
 (iv) the income does not pass the substantial production test set out in subsection (4B).
 (2) Where:
 (a) a company provides any of the following services:
 (i) drinks and meals;
 (ii) accommodation in a hotel, motel, guest‑house or similar place;
 (iii) the provision of, or the use of facilities for, entertainment, recreation or instruction; and
 (b) if subparagraph (a)(ii) or (iii) applies—the transaction for the provision of the services includes the sale of goods of a kind that are commonly supplied in connection with the services concerned;
the tainted sales income of the company does not include income from the sale of:
 (c) if subparagraph (a)(i) applies—the drink or food concerned; or
 (d) if subparagraph (a)(ii) or (iii) applies—the goods referred to in paragraph (b).
 (3) The tainted sales income of a company of a statutory accounting period does not include passive income of the company of the statutory accounting period.
 (4) For the purposes of this section, income from the sale of goods by a company passes the substantial alteration test if:
 (a) the company substantially altered the goods; and
 (b) a substantial part of that alteration was carried out by the directors or employees of the company.
 (4A) For the purposes of this section, income from the sale of goods by a company passes the substantial manufacture test if a substantial part of the manufacture of the goods was carried out by the directors or