Group structure
Provide a diagram illustrating the worldwide group structure or its relevant parts, including all offshore entities you have had related party dealings with or investments in, and the direct and indirect ownership interests on a year-by-year basis.
The diagram should note:
- jurisdictions the entity undertakes economic activity in
- any changes during the review period, including entities that joined or exited the group (including relevant dates)
- entities that are part of the Australian income tax consolidated/multiple entry consolidated (MEC) group
- permanent establishments
- partnerships, trusts, joint ventures and co-ownership arrangements you are a party to.
New businesses and transactions
Provide details of any new business lines that have started or any significant new transactions undertaken during the review period.
Restructures
Confirm whether the economic group undertook any restructures or reorganisations during the review period. This includes transfers of functions, business operations, intellectual property or risks offshore.
If so, provide the following:
- description of the restructure or reorganisation including the resultant changes in the ownership structure and change in ownership percentage (whether direct or indirect)
- description of the steps and dates to effect the restructure or reorganisation, including a step plan if appropriate
- Australian income tax implications associated with each step of the restructure or reorganisation
- commercial rationale and reasons for undertaking the restructure or reorganisation
- description of any acquisition, disposal or change in the ownership or rights of intellectual property from Australia.
Acquisition of an interest in another entity
Confirm whether you acquired an interest in an entity (including a foreign entity) during the review period.
If so, provide the following in respect of each acquisition:
- name of the entity acquired and the ownership percentage acquired
- acquisition price and the form of consideration provided
- details of how the acquisition was financed (including the provider of the finance and whether it is a related party)
- share purchase agreement (or other transaction document, however described)
- the purchase price allocation for accounting purposes (if applicable) and an explanation of any differences between the accounting and tax cost bases (if applicable)
- a description of all expenditure incurred in relation to the transaction, including both the income tax treatment and the accounting treatment in relation to each category of expenditure.
If the acquisition resulted in an entity joining the consolidated/MEC group, then also provide:
- working papers for the consolidation entry calculations (the ‘allocable cost amount’ calculation and the ‘tax cost setting amounts’ working papers)
- completion accounts for each entity that joined the group just before the joining time
- valuation reports commissioned (if any).
Disposal of an interest in another entity / tax consolidated group
Confirm whether you disposed of an interest in another entity (including a foreign entity) or consolidated/MEC group during the review period.
If so, provide the following information in respect of each disposal:
- name of the entity and the ownership percentage disposed of
- details of the proceeds and consideration received
- relevant share sale agreement
- working papers which support the calculation of the capital gain or loss
- an explanation of how the deferred consideration (if any) has been treated for income tax purposes
- itemised description of all expenditure incurred in relation to the transaction, including both the income tax treatment and the accounting treatment in relation to each category of expenditure
- a calculation showing the accounting gain or loss recognised together with an explanation of why the accounting gain or loss differs from the gain or loss recognised for income tax purposes.
If the disposal resulted in an entity leaving the consolidated/MEC group, then also provide the working papers for the exit ‘allocable cost amount’ calculation (including the balance sheet).
Controlled foreign entities (CFEs)
CFEs include:
- controlled foreign companies
- controlled foreign trusts
- controlled foreign partnerships.
Provide the following details regarding all CFEs
- a list of the CFEs including
- name of the entity
- type of CFE (company, partnership or trust)
- ownership percentage
- country of residence for income tax purposes
- a description of the activities undertaken by the CFE
- the calculation of the 'tainted income ratio', which includes details of any ‘passive income’, ‘tainted sales income’, ‘tainted services income’ and/or ‘eligible designated concession income’
- standalone financial statements and trial balance.
Branches or Permanent establishments (PE)
Provide the following regarding each branch or PE:
- country of operation
- circumstances that gave rise to the branch or PE
- a description of the activities undertaken by the branch or PE
- working papers for the calculation of the ‘active income test’
- trial balance
- working papers for the allocation of income and expenses.
Transfer pricing documents
Provide the transfer pricing documentation showing the basis for the pricing of the international related party transactions. If available, include a diagram of the global supply/value chain.
International agreements
Confirm whether you have any arrangements with international related parties including, for example:
- loan arrangements
- royalty arrangements
- service arrangements
- derivative transactions.
If so, provide a copy of the international agreement.
Parent entities
Provide the statutory accounts of the following offshore related parties:
- your ultimate holding company
- your immediate holding company.
Tax losses
In respect of losses (capital or revenue) utilised during the review period, provide the working papers and analysis performed which demonstrates that the continuity of ownership test or the same business test was satisfied.
In respect of transferred losses (capital or revenue) utilised during the period, or carried forward to later income years, provide:
- the analysis performed to transfer the losses into the consolidated/MEC group
- the calculation of the available fraction in respect of each bundle of loss transferred to the (provisional) head company of the consolidated/MEC group (including any adjustments to the available fraction prior to or after joining the consolidated/MEC group)
- confirmation if there has been any apportionment of the transferred losses which were utilised in the joining/formation year.