Income Tax Assessment Act 1997
SECTION 820-54 Meaning of GR group net third party interest expense, financial statement net third party interest expense and adjusted net third party interest expense 820-54(1)
The GR group net third party interest expense , for a period, of a * GR group for the period, is the amount that would be the group ' s * financial statement net third party interest expense for the period, if: (a) where paragraph 820-53(2)(a) applies - the * audited consolidated financial statements for the period for the * GR group parent for the period of the group were prepared on the basis that the following were treated as interest:
(i) an amount in the nature of interest;
(b) where paragraph 820-53(2)(b) applies - the * global financial statements for the period for the GR group parent for the period of the group were prepared on the basis that the following were treated as interest:
(ii) any other amount that is economically equivalent to interest; or
(i) an amount in the nature of interest;
(ii) any other amount that is economically equivalent to interest.
820-54(2)
The financial statement net third party interest expense , for a period, of a * GR group for the period, is: (a) the amount of the * GR group ' s net third party interest expense for the period, as disclosed in the following statements:
(i) if paragraph 820-53(2)(a) applies - the * audited consolidated financial statements for the * GR group parent for the period for the GR group;
reduced by the amount of each payment (if any) covered by subsection (3) , to the extent that it was a factor in working out that net third party interest expense; or (b) if those statements do not disclose that net third party interest expense - the amount worked out as follows:
(ii) if paragraph 820-53(2)(b) applies - the * global financial statements for the GR group parent for the period for the GR group;
(i) first, identify the amount of the group ' s third party interest expenses for the period disclosed in those statements;
(ii) next, reduce the result of subparagraph (i) by the amount of each payment (if any) covered by subsection (3) , to the extent that it was a factor in working out those third party interest expenses;
(iii) next, reduce the result of subparagraph (ii) by the amount of the group ' s third party interest income for the period disclosed in those statements;
(iv) next, increase the result of subparagraph (iii) by the amount of each payment (if any) covered by subsection (3) , to the extent that it was a factor in working out that third party interest income.
820-54(3)
For the purposes of subsection (2) , this subsection covers a payment if: (a) the payment is made by an entity to an * associate entity of the entity; and (b) either:
(i) the entity is a * GR group member for the period of the * GR group and the associate entity is not such a GR group member; or
(ii) the entity is not a GR group member for the period of the GR group and the associate entity is such a GR group member.
820-54(4)
The adjusted net third party interest expense , for a period, of an entity or a * GR group is: (a) for an entity - the amount that would be the entity ' s net interest expense for the period if the following payments were disregarded:
(i) a payment that is made by the entity to an * associate entity of the entity;
(b) for a GR group - the amount that would be the GR group ' s net interest expense for the period if the following payments were disregarded:
(ii) a payment that is made by an associate entity of the entity to the entity; or
(i) a payment that is made by a * GR group member of the GR group to an associate entity of any GR group member of the GR group;
(ii) a payment that is made by an associate entity of a GR group member of the GR group to any GR group member of the GR group.
820-54(5)
For the purposes of subsections (3) and (4) , in determining whether an entity is an associate entity of another entity: (aa) disregard the requirement in subsections 820-905(1) and (2A) that the entity is an *associate of the other entity, unless only paragraph 820-905(1)(b) applies; and (a) treat the references in paragraphs 820-905(1)(a) and 820-905(2A)(a) to " an * associate interest of 50 % or more " as instead being a reference to " a * TC control interest of 20 % or more " ; and (b) treat subsection 820-860(3) as applying for the purposes of determining whether the entity is an associate entity of the other entity (as a result of paragraph (a) of this subsection); and (c) treat the purposes mentioned in subparagraphs 820-870(1)(b)(i) and (ii) as including the purposes of determining whether the entity is an associate entity of the other entity (as a result of paragraph (a) of this subsection).
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