Tax Laws Amendment (Combating Multinational Tax Avoidance) Act 2015 (170 of 2015)

Schedule 1   Significant global entities

Income Tax Assessment Act 1997

3   At the end of Division 960

Add:

Subdivision 960-U - Significant global entities

Guide to Subdivision 960-U

960-550 What this Subdivision is about

Generally speaking, a significant global entity is:

(a) a global parent entity with an annual global income of $1 billion or more; or

(b) any member of such a global parent entity's group.

Table of sections

Operative provisions

960-555 Meaning of significant global entity

960-560 Meaning of global parent entity

960-565 Meaning of annual global income

960-570 Meaning of global financial statements

Operative provisions

960-555 Meaning of significant global entity

(1) An entity is a significant global entity for a period if the entity is a *global parent entity:

(a) whose *annual global income for the period is $1 billion or more; or

(b) in relation to whom the Commissioner makes a determination under subsection (3) for the period.

(2) An entity is also a significant global entity for a period if:

(a) the entity is a member of a group of entities that are consolidated for accounting purposes as a single group; and

(b) one of the other members of the group is a *global parent entity:

(i) whose *annual global income for the period is $1 billion or more; or

(ii) in relation to whom the Commissioner makes a determination under subsection (3) for the period.

(3) The Commissioner may make a determination under this subsection in relation to a *global parent entityfor a period if:

(a) *global financial statements have not been prepared for the entity for the period; and

(b) on the basis of the information available to the Commissioner, the Commissioner reasonably believes that, if such statements had been prepared for the period, the entity's *annual global income for the period would have been $1 billion or more.

The Commissioner must give a notice of the determination to the global parent entity, or to another entity that becomes a *significant global entity as a result of the determination.

(4) An entity who is dissatisfied with a determination made in relation to the entity may object against the determination in the manner set out in Part IVC of the Taxation Administration Act 1953.

(5) However, if:

(a) there has been a taxation objection (within the meaning of section 14ZL of the Taxation Administration Act 1953) against an *assessment relating to the entity; and

(b) the assessment involved the application of section 177DA of the Income Tax Assessment Act 1936 (schemes that limit a taxable presence in Australia) in relation to the entity;

the right of objection under subsection (4) of this section is unaffected, but the outcome of that objection has no effect on the assessment or on the outcome of the taxation objection.

Note: Section 14ZVA of the Taxation Administration Act 1953 excludes from a taxation objection to an assessment any grounds (or potential grounds) for an objection to a determination under subsection (3) of this section.

(6) A determination under subsection (3) is not a legislative instrument.

(7) Section 175 of the Income Tax Assessment Act 1936 (validity) applies to a determination under subsection (3) of this section in the same way as it applies to an *assessment.

960-560 Meaning of global parent entity

A global parent entity is an entity that, according to:

(a) *accounting principles; or

(b) if accounting principles do not apply in relation to the entity - commercially accepted principles relating to accounting;

is not controlled by another entity.

Note: A global parent entity may be a single entity that is not a member of a group of entities.

960-565 Meaning of annual global income

The annual global income of a *global parent entity for a period is:

(a) if the entity is a member of a group of entities that are consolidated for accounting purposes as a single group - the total annual income of all the members of the group; or

(b) otherwise - the total annual income of the entity;

as shown in the latest *global financial statements for the entity for the period.

960-570 Meaning of global financial statements

Global financial statements for a *global parent entity for a period (the relevant period ) are the financial statements that:

(a) have been prepared and audited in relation to that entity, or that entity and other entities, in accordance with:

(i) *accounting principles and *auditing principles; or

(ii) if such principles do not apply - commercially accepted principles, relating to accounting and auditing, that ensure the statements give a true and fair view of the financial position and performance of that entity (or that entity and the other entities on a consolidated basis); and

(b) are for the most recent period ending:

(i) no later than the end of the relevant period; and

(ii) no earlier than 12 months before the start of the relevant period.