Question 18

This question collects the amounts you have deducted or returned (for Australian tax purposes) for your internally recorded 'dealings' with your branch operations.

The dollar amounts or values asked for in this question are all based on your accounting records.

These amounts record the attribution of your income and expenses/costs to your branch operations, where the income or expenses/costs were not wholly or directly earned from or incurred in your branch operations. For more information, see Permanent establishments.

This question does not collect information about amounts you have deducted or returned for actual transactions between different related persons or entities connected with the branch operations of one of those persons or entities. For example, do not show at this question, any amounts for a contract or transaction between you and your Australian resident subsidiary in relation to the offshore branch operations of your subsidiary. These amounts should be shown at the applicable labels in questions 3 to 17.

If you are an authorised deposit-taking institution (ADI) within the meaning of section 995-1 of the ITAA 1997 and are covered by TR 2005/11, include at label I of items 18a and 18b any funds, used in your Australian or offshore branch operations that you have internally recorded as a 'loan', with your branch operations that records your attribution of your income and expenditure to the branch operations.

If you are not an ADI covered by TR 2005/11, include at item 18c, labels L and J amounts that you have internally recorded for the supply or acquisition of trading stock to or from your branch operations in accordance with paragraph 5.16 of TR 2001/11Income tax: International transfer pricing - operation of Australia's permanent establishment attribution rules.

At item 18d, labels I and J of this question, show any other amounts that you have deducted or returned (for Australian tax purposes) for your internally recorded 'dealings' with your branch operations, and at item 18d, label L write a description of the kind of expenditure/cost you have deducted, or income you have returned, for the internally recorded 'dealings' for which you included an amount at this item 18d.

More than one amount and description can be included at labels I, J and L of item 18d (the methodology is described below).

If you have any branch operations, answer 'Yes' at label A of question 18 and complete the required fields.

At item 18a, label I, write the average balance of any internally recorded interest bearing loans from your branch operations.

At item 18b, label I, write the average balance of any internally recorded interest bearing loans to your branch operations (excluding amounts to which question 40 of this schedule applies).

At item 18a, label J, write the total interest calculated for the internally recorded loans from your branch operations shown at label I of this question.

At item 18b, label J, write the total interest calculated for the internally recorded loans to your branch operations shown at label I of this question.

At item 18a, label K, write the average balance of internally recorded interest free loans from your branch operations for the purpose of TR 2005/11.

At item 18b, label K, write the average balance of internally recorded interest free loans to your branch operations for the purpose of TR 2005/11.

At item 18c, label I, write the total purchase costs, claimed for Australian tax purposes, for internally recorded 'trading stock transfers' to or from your branch operations.

At item 18c, label J, write the total sales proceeds, for Australian tax purposes, from internally recorded 'trading stock transfers' to or from your branch operations.

At item 18d, label I, write the total costs or expenditure deducted, for Australian tax purposes, for any other internally recorded 'dealings' with your branch operations.

At item 18d, label J, write the total income or other amounts returned, for Australian tax purposes, for any other internally recorded 'dealings' with your branch operations.

At item 18d, label L, write a description of what kind of expenditure/cost you have deducted, or income you have returned, for the internally recorded 'dealings' with your branch operations for which you included the highest amount at labels I or J of item 18d.

For example:

• If you have incurred particular salary and wages costs in deriving income both from your branch operations in a particular country and from your other operations, and you have chosen to record the attribution of those costs in an internally recorded 'dealing' with those branch operations, you should do both of the following:
• • write at item 18d, label I, the amount of those particular salary and wages costs you have deducted for Australian tax purposes
  • write 'Salary and wages' at item 18d, label L.
   
• If you have entered into a currency forward to hedge foreign currency which is partly used in the course of your overseas branch operations and partly used in your other operations, and you have chosen to record the attribution of the income or loss from the currency forward in an internally recorded 'dealing' with those branch operations, you should do all of the following:
• • write at item 18d, label I, the amount you have deducted for Australian tax purposes in attributing of the foreign currency forward to your branch operations in the internally recorded 'dealing'
  • write at item 18d, label J the amount you have returned for Australian tax purposes in attributing of the foreign currency forward to your branch operations in the internally recorded 'dealing'
  • write 'Foreign currency forward' at item 18d, label L.