IRPD debt factoring or debt securitisation

Table 50: IRPD debt factoring or debt securitisation

Code	Description of transaction category
IDF	Inward debt factoring Any IRPDs in the nature of inward debt factoring that is broadly an arrangement under which the reporting entity (factor) purchases accounts receivables at a discount from an IRP to provide working capital to the selling IRP. The reporting entity (factor) then collects the receivables from the IRPs customers. Debt factoring agreements can either be recourse or non-recourse arrangements. With recourse debt factoring, the factor does not assume the risk of bad debts and may seek recourse from the business for any uncollectible debts. With non-recourse debt factoring, the exchange of the receivables essentially transfers ownership of the receivables to the factor, such that the factor obtains all of the rights and risks associated with the receivables. The term ‘debt factoring’ has its ordinary meaning within the context of commercial practices.
ODF	Outward debt factoring Any IRPDs in the nature of outward debt factoring that is broadly an arrangement under which the reporting entity sells its accounts receivables at a discount to an IRP (factor) to obtain working capital. The IRP (factor) then collects the receivables from the reporting entity's customers. Debt factoring agreements can either be recourse or non-recourse arrangements. With recourse debt factoring, the factor does not assume the risk of bad debts and may seek recourse from the business for any uncollectible debts. With non-recourse debt factoring, the sale of the receivables essentially transfers ownership of the receivables to the factor, such that the factor obtains all of the rights and risks associated with the receivables. The term ‘debt factoring’ has it ordinary meaning within the context of commercial practices.
IDSEC	Inward debt securitisation Any IRPDs in the nature of a structured finance arrangement under which the reporting entity purchases financial assets of the IRP through debt securitisation. Securitisation is a structured finance arrangement where an entity (the originator) sells a portfolio of financial assets to a special purpose vehicle. To acquire the assets from the originator, the special purpose vehicle issues tradable securities to fund the purchase. Investors purchase the securities, either through a private offering (for example, by targeting institutional investors) or on the open market. The originator will retain a beneficial interest in the performance of the securities and may also receive a service fee. The term ‘debt securitisation’ has its ordinary meaning within the context of commercial practices.
ODSEC	Outward debt securitisation Any IRPDs in the nature of a structured finance arrangement under which the reporting entity sells financial assets to the IRP through debt securitisation. Securitisation is a structured finance arrangement where an entity (the originator) sells a portfolio of financial assets to a special purpose vehicle. To acquire the assets from the originator, the special purpose vehicle issues tradable securities to investors. The investors purchase the securities, either through a private offering (for example, by targeting institutional investors) or on the open market. The originator will retain a beneficial interest in the performance of the securities and may also receive a service fee. The term ‘debt securitisation’ has its ordinary meaning within the context of commercial practices.

More detail is provided below about how to show the book value and the consideration paid or received for debt factoring and debt securitisation arrangements at Questions 12, 13 and 22.

Any amounts provided at any of the below questions should be reported in whole dollars and cents.

1. Transaction Identifier

Show the Transaction ID for the transaction being reported.

(LCMSF31)

2. Related Transaction Identifier(s)

Show all Transaction IDs that are related or directly connected to the transaction being reported.

(LCMSF206)

3. What is the transaction category?

Select the transaction category for the IRPD transaction.

(LCMSF32)

4. Is this transaction part of a RAS?

If this transaction is covered by an IRPD agreement in a RAS, indicate True.

Otherwise indicate False.

(LCMSF33)

5. How many transactions are part of the RAS?

If the transaction is part of a RAS, indicate the applicable range for the number of the transactions in the same RAS that were current during the income year:

• Low (1–5)
• Moderate (6–50)
• High (51 or more)

(LCMSF35)

6. Australian counterparty name

Show the full name of the Australian counterparty (which may be the reporting entity itself) to this transaction/RAS.

(LCMSF207)

7. ABN or TFN of the Australian counterparty to the transaction/RAS

Show the ABN or TFN or both of the Australian counterparty (which may be the reporting entity itself) to the transaction/RAS.

(LCMSF83 and LCMSF84)

8. Name of the IRP non-resident counterparty to the transaction/RAS

Show the full name of the IRP non-resident counterparty to this type of IRPD.

The full name to be shown is the complete name of the IRP non-resident counterparty entity. While this would be expected to usually correspond with the name of the relevant party in any associated written agreement documentation, the full correct name of the entity should be shown at Part A even if this is not exactly the same as the name used in any associated written agreement documentation.

(LCMSF37)

9. Tax residency of the IRP non-resident counterparty to the transaction/RAS

Show the country code for the country of tax residence of the IRP non-resident counterparty to this transaction/RAS.

(LCMSF38)

10. Was the transaction/RAS entered into by the non-resident counterparty in the course of its business operations carried on through a permanent establishment in a different country to its country of tax residence?

Indicate True if the transaction/RAS was entered into by the non-resident counterparty in the course of its business operations carried on through a PE in a different country to its country of tax residence.

Otherwise indicate False.

(LCMSF208)

11. Country of permanent establishment of non-resident counterparty

This question applies only if you answer True to Question 10.

Show the country code of the PE through which the non-resident counterparty entered into the transaction/RAS. This code must not be the same as the code reported at Question 9 (LCMSF38) for the country of tax residence of the IRP non-resident counterparty.

(LCMSF209)

12. Amount of consideration paid (of a capital nature for income tax purposes) for the transaction/RAS

The reporting rules for showing the amount of consideration paid of a capital nature at this question depend on the nature of the debt factoring and debt securitisation arrangements.

IRP financial dealing is IRP inward debt factoring

Show the aggregate consideration paid for the receivables sold or assigned by the IRP to the reporting entity (factor) for the inward debt factoring IRP transaction/RAS during the income year. Show the aggregate gross consideration paid. Do not instead show merely the net consideration or the difference between the total amount of the book value and total amount of consideration paid.

Show zero if no amount of a capital nature was paid by the reporting entity for the receivables sold or assigned by the IRP for the inward debt factoring IRP transaction/RAS during the income year.

IRP financial dealing is IRP inward debt securitisation

Show the aggregate consideration paid for the financial assets transferred to or acquired by the reporting entity for the inward debt securitisation IRP transaction/RAS during the income year. Show the aggregate gross consideration paid. Do not instead show merely the net consideration or the difference between the total amount of the book value and total amount of consideration paid.

Show zero if no amount of a capital nature was paid by the reporting entity for the financial assets transferred to or acquired by the reporting entity for the inward debt securitisation IRP transaction/RAS during the income year.

(LCMSF39)

13. Amount of consideration received (of a capital nature for income tax purposes) for the transaction/RAS

The reporting rules for showing the amount of consideration received of a capital nature at this question depend on the nature of the debt factoring and debt securitisation arrangements.

IRP financial dealing is IRP outward debt factoring

Show the aggregate consideration received for the receivables sold or assigned by the reporting entity to the IRP factor for the outward debt factoring IRP transaction/RAS during the income year. Show the aggregate gross consideration received. Do not instead show merely the net consideration or the difference between the total amount of the book value and total amount of consideration received.

Show zero if no amount of a capital nature was received by the reporting entity for the receivables sold or assigned by the reporting entity to the IRP factor for the outward debt factoring IRP transaction/RAS during the income year.

IRP financial dealing is IRP outward debt securitisation

Show the aggregate consideration received for the financial assets transferred to or acquired by the IRP for the outward debt securitisation IRP transaction/RAS during the income year. Show the aggregate gross consideration received. Do not instead show merely the net consideration or the difference between the total amount of the book value and total amount of consideration received.

Show zero if no amount of a capital nature was received by the reporting entity for the financial assets transferred to or acquired by the IRP for the outward debt securitisation IRP transaction/RAS during the income year.

(LCMSF40)

14. Was non-monetary consideration provided (of a capital nature for income tax purposes) for the transaction/RAS?

Indicate True if non-monetary consideration of a capital nature was provided by the reporting entity in connection with this transaction/RAS during the income year.

Otherwise indicate False.

(LCMSF86)

15. Was non-monetary consideration obtained (of a capital nature for income tax purposes) for the transaction/RAS?

Indicate True if non-monetary consideration of a capital nature was obtained by the reporting entity in connection with this transaction/RAS during the income year.

Otherwise indicate False.

(LCMSF86)

16. Amount of expenditure (not of a capital nature for income tax purposes) for the transaction/RAS

The reporting rules for showing the amount of expenditure not of a capital nature for income tax purposes at this question depend on the nature of the debt factoring and debt securitisation arrangements.

IRP financial dealing is IRP inward debt factoring

Show the amount of expenditure not of a capital nature for income tax purposes for the inward debt factoring IRP transaction/RAS during the income year based on the reporting entity’s accounting records, excluding the consideration paid for the receivables sold or assigned by the IRP to the reporting entity (factor) shown at Question 12.

Show zero if there was no amount of expenditure not of a capital nature for income tax purposes for the inward debt factoring IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

IRP financial dealing is IRP outward debt factoring

Show the amount of expenditure not of a capital nature for income tax purposes for the outward debt factoring IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

Show zero if there was no amount of expenditure not of a capital nature for income tax purposes for the outward debt factoring IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

IRP financial dealing is IRP inward debt securitisation

Show the amount of expenditure not of a capital nature for income tax purposes for the inward debt securitisation IRP transaction/RAS during the income year based on the reporting entity’s accounting records, excluding any consideration paid for the financial assets transferred to or acquired by you from the IRP shown at Question 12.

Show zero if there was no amount of expenditure not of a capital nature for income tax purposes for the inward debt securitisation IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

IRP financial dealing is IRP outward debt securitisation

Show the amount of expenditure not of a capital nature for income tax purposes for the outward debt securitisation IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

Show zero if there was no amount of expenditure not of a capital nature for income tax purposes for the outward debt securitisation IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

(LCMSF41)

17. Amount of revenue (not of a capital nature for income tax purposes) for the transaction/RAS

The reporting rules for showing the amount of revenue not of a capital nature for income tax purposes at this question depend on the nature of the debt factoring and debt securitisation arrangements.

IRP financial dealing is IRP inward debt factoring

Show the amount of revenue not of a capital nature for income tax purposes for the inward debt factoring IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

Show zero if there was no amount of revenue not of a capital nature for income tax purposes for the inward debt factoring IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

IRP financial dealing is IRP outward debt factoring

Show the amount of revenue not of a capital nature for income tax purposes for the outward debt factoring IRP transaction/RAS during the income year based on the reporting entity’s accounting records, excluding the consideration received for the receivables sold or assigned by the reporting entity to the IRP factor shown at Question 13.

Show zero if there was no amount of revenue not of a capital nature for income tax purposes for the outward debt factoring IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

IRP financial dealing is IRP inward debt securitisation

Show the amount of revenue not of a capital nature for income tax purposes for the inward debt securitisation IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

Show zero if there was no amount of revenue not of a capital nature for income tax purposes for the inward debt securitisation IRP transaction/RAS during the income year based on the reporting entity’s accounting records.

IRP financial dealing is IRP outward debt securitisation

Show the amount of revenue not of a capital nature for income tax purposes for the outward debt securitisation IRP transaction/RAS during the income year based on the reporting entity’s accounting records, excluding the consideration received for the financial assets transferred to or acquired by the IRP shown at Question 13.

(LCMSF42)

18. Average balance of debt interests issued (Inbound Borrowings)

Not applicable.

(LCMSF210)

19. Capitalised interest deducted

Not applicable.

(LCMSF211)

20. Average balance of debt interests held (Outbound Loans)

Not applicable.

(LCMSF212)

21. Capitalised interest returned

Not applicable.

(LCMSF213)

22. Book values

The reporting rules for showing book values at this question depend on the nature of the debt factoring and debt securitisation arrangements.

IRP financial dealing is IRP inward debt factoring

Show the aggregate book value of the receivables sold or assigned by the IRP to the reporting entity (factor) for the inward debt factoring IRP transaction/RAS during the income year.

IRP financial dealing is IRP inward debt securitisation

Show the aggregate book value of the financial assets transferred to or acquired by the reporting entity for the inward debt securitisation IRP transaction/RAS during the income year.

IRP financial dealing is IRP outward debt factoring

Show the aggregate book value of the receivables sold or assigned to the IRP factor for the outward debt factoring IRP transaction/RAS during the income year.

IRP financial dealing is IRP outward debt securitisation

Show the aggregate book value of the financial assets transferred to or acquired by the IRP for the outward debt securitisation IRP transaction/RAS during the income year.

(LCMSF214)

23. Was non-monetary consideration provided (not of a capital nature for income tax purposes) for the transaction/RAS?

Indicate True if non-monetary consideration not of a capital nature for income tax purposes was provided by the reporting entity in connection with this transaction/RAS during the income year.

Otherwise indicate False.

(LCMSF44)

24. Was non-monetary consideration obtained (not of a capital nature for income tax purposes) for the transaction/RAS?

Indicate True if non-monetary consideration not of a capital nature for income tax purposes was obtained by the reporting entity in connection with this IRP transaction/RAS during the income year.

Otherwise indicate False.

(LCMSF45)

25. Is the debt interest (including borrowing/loan) interest-free?

Not applicable

(LCMSF237)

26. Did you enter into a deferred foreign currency payment arrangement in relation to the transaction?

Not applicable for this transaction category.

(LCMSF215)

27. Foreign Currency Reporting Type

Not applicable for this transaction category.

(LCMSF216)

28. Foreign Currency Code

Not applicable for this transaction category.

(LCMSF217)

29. Amount of foreign exchange losses deducted for the transaction/RAS

Show the amount of foreign exchange losses deducted for income tax purposes by the reporting entity in connection with this transaction/RAS under Division 775 of the ITAA 1997 o, if applicable, the taxation of financial arrangements (TOFA) provisions in Division 230 of the ITAA 1997 for the income year.

For more information about the circumstances in which foreign exchange gains are assessable and foreign exchange losses are deductible for Australian income tax purposes, refer to Appendix 6.

Show zero if there was no foreign exchange loss deducted for income tax purposes in connection with this transaction/RAS for the income year,.

(LCMSF87)

30. Foreign Currency Code

Show the Foreign Currency CodeExternal Link in relation to foreign exchange losses deducted for the transaction/RAS

(LCMSF219)

31. Amount of foreign exchange gains returned for the transaction/RAS

Show the amount of foreign exchange gains assessable for income tax purposes in connection with this transaction/RAS under Division 775 of the ITAA 1997 or, if applicable, the TOFA provisions in Division 230 of the ITAA 1997 for the income year.

For more information about the circumstances in which foreign exchange gains are assessable and foreign exchange losses are deductible for Australian income tax purposes, refer to Appendix 6.

Show zero if there was no foreign exchange gain assessable for income tax purposes in connection with this transaction/RAS.

(LCMSF43)

32. Foreign Currency Code

Show the Foreign Currency CodeExternal Link in relation to assessable foreign exchange gains for the transaction/RAS

(LCMSF221)

33. What transfer pricing/capital asset pricing methodology has been applied to this transaction/RAS?

Select the code UNKT (Unknown TP Method) if the reporting entity does not know which transfer pricing methodology has been applied to this transaction/RAS.

Select UNKC (Unknown CAP Method) if the reporting entity does not know which capital asset pricing methodology has been applied to this transaction/RAS.

(LCMSF46)

34. What level of transfer pricing documentation has been prepared for this transaction/RAS?

The level of transfer pricing documentation refers to the aggregate dollar amount of this transaction/RAS for which the reporting entity has prepared relevant transfer pricing documentation, expressed as a percentage of total dollar value of this transaction/RAS.

1 = 0%

2 = 1% to less than 25%

3 = 25% to less than 50%

4 = 50% to less than 75%

5 = 75% to less than 100%

6 = 100%

(LCMSF47)

35. If the reporting entity is a bank and this transaction is in a RAS, has the special short-term tenor rule for ordinary borrowings and ordinary loans been applied to this RAS?

Always indicate False if the transaction category is not ordinary borrowings or ordinary loans.

(LCMSF88)

36. If the reporting entity is a bank and this of transaction is in a RAS, has the special short-term tenor rule for short term derivatives been applied to this RAS?

Always indicate False if the transaction category is not derivatives.

37. If the reporting entity is a bank and this transaction is in a RAS, has the special rule for FX derivatives been applied to this RAS?

Always indicate False if the transaction category is not derivatives.

(LCMSF129)

38. If the reporting entity is an OBU, is this transaction/RAS an OB activity?

If the reporting entity is an OBU and this transaction/RAS is an OB activity under sections 121D and 121EAA of the ITAA 1936, indicate True.

Otherwise indicate False.

(LCMSF63)

39. Is this transaction/RAS covered by a category on the exclusions list?

Indicate False, since none of the categories on the exclusions list can apply to debt factoring or debt securitisation arrangements.

40. What category of the exclusions list applies to this transaction/RAS?

Not applicable.

(LCMSF49)

41. Transaction Comments

Provide any relevant comments in respect of the transaction/RAS.

(LCMSF222)

Reporting example: IRPD debt factoring or debt securitisation