Div 13 repealed by No 101 of 2013, s 3 and Sch 2 item 1, applicable: (a) in respect of tax other than withholding tax - in relation to income years starting on or after the date mentioned in subsection 815-15(2) of the Income Tax (Transitional Provisions) Act 1997 , as inserted; and (b) in respect of withholding tax - in relation to income derived, or taken to be derived, in income years starting on or after that date.

Div 13 substituted by No 29 of 1982.

Former Div 13, comprising s 136, repealed by No 29 of 1982.

S 136AE repealed by No 101 of 2013, s 3 and Sch 2 item 1, applicable: (a) in respect of tax other than withholding tax - in relation to income years starting on or after the date mentioned in subsection 815-15(2) of the Income Tax (Transitional Provisions) Act 1997 , as inserted; and (b) in respect of withholding tax - in relation to income derived, or taken to be derived, in income years starting on or after that date. S 136AE formerly read:

SECTION 136AE DETERMINATION OF SOURCE OF INCOME ETC.  
136AE(1)
Where:

(a) by the application of section 136AD in relation to a taxpayer other than a partnership or trustee, the arm ' s length consideration in respect of the supply or acquisition of property by the taxpayer is deemed to have been received or receivable or received and receivable, or to have been given or agreed to be given, as the case may be; and

(b) a question arises whether, and if so, as to the extent to which:

(i) any income, being that consideration, is derived by the taxpayer from sources in Australia or sources out of Australia;

(ii) any income in the calculation of which that consideration is taken into account is derived by the taxpayer from sources in Australia or sources out of Australia; or

(iii) that consideration is expenditure incurred by the taxpayer in deriving income from sources in Australia or sources out of Australia,

the income or expenditure shall be deemed, for all purposes of this Act, to have been derived or to have been incurred in deriving income, as the case may be, from such source, or from such sources and in such proportions, as the Commissioner determines.

136AE(2)
Where:

(a) by the application of section 136AD in relation to a taxpayer being a partnership, the arm ' s length consideration in respect of the supply or acquisition of property by the taxpayer is deemed to have been received or receivable or received and receivable, or to have been given or agreed to be given, as the case may be; and

(b) in determining the net income, exempt income or partnership loss of the taxpayer or the extent to which the individual interest of a partner in the net income, exempt income or partnership loss of the taxpayer is attributable to sources in Australia, a question arises whether, and if so, as to the extent to which:

(i) any income, being that consideration, is derived by the taxpayer from sources in Australia or sources out of Australia;

(ii) any income in the calculation of which that consideration is taken into account is derived by the taxpayer from sources in Australia or sources out of Australia; or

(iii) that consideration is expenditure incurred by the taxpayer in deriving income from sources in Australia or sources out of Australia,

the income or expenditure shall be deemed, for all purposes of this Act, to have been derived or to have been incurred in deriving income, as the case may be, from such source, or from such sources and in such proportions, as the Commissioner determines.

136AE(3)
Where:

(a) by the application of section 136AD in relation to a taxpayer being the trustee of a trust estate, the arm ' s length consideration in respect of the supply or acquisition of property by the taxpayer is deemed to have been received or receivable or received and receivable, or to have been given or agreed to be given, as the case may be; and

(b) in determining the net income or exempt income of the trust estate or the extent to which the share of a beneficiary of the net income or exempt income of the trust estate is attributable to sources in Australia, a question arises whether, and if so, as to the extent to which:

(i) any income, being that consideration, is derived by the taxpayer from sources in Australia or sources out of Australia;

(ii) any income in the calculation of which that consideration is taken into account is derived by the taxpayer from sources in Australia or sources out of Australia; or

(iii) that consideration is expenditure incurred by the taxpayer in deriving income from sources in Australia or sources out of Australia,

the income or expenditure shall be deemed, for all purposes of this Act, to have been derived or to have been incurred in deriving income, as the case may be, from such source, or from such sources and in such proportions, as the Commissioner determines.

136AE(4)
Where:

(a) a taxpayer (other than a partnership or trustee):

(i) is a resident and carries on a business in a country other than Australia at or through a permanent establishment of the taxpayer in that other country; or

(ii) is a resident and carries on a business in an area covered by an international tax sharing treaty; or

(iii) is a non-resident and carries on a business in Australia at or through a permanent establishment of the taxpayer in Australia; or

(iv) is a non-resident and carries on a business in an area covered by an international tax sharing treaty and also carries on a business somewhere else in Australia at or through a permanent establishment of the taxpayer in Australia; and

(b) a question arises whether, and if so, as to the extent to which:

(i) any income derived by the taxpayer is derived from sources in Australia or sources out of Australia; or

(ii) any expenditure incurred by the taxpayer is incurred in deriving income from sources in Australia or sources out of Australia;

(c) none of the preceding provisions of this section applies in relation to the determination of that question;

(d) that question, if determined on the basis of the return furnished by the taxpayer, would have a tax result more favourable to the taxpayer than the result that would occur if that question were determined in accordance with this subsection; and

(e) in the Commissioner ' s opinion, the derivation of the income or the incurring of the expenditure is attributable, in whole or in part, to activities carried on by the taxpayer:

(i) at or through the permanent establishment that is referred to in subparagraph (a)(i) or (iii); or

(ii) in the area covered by the international tax sharing treaty that is referred to in paragraph (a)(ii) or (iv);

the income or expenditure shall be deemed, for all purposes of this Act, to have been derived or to have been incurred in deriving income, as the case may be, from such source, or from such sources and in such proportions, as the Commissioner determines.

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S 136AE(4) amended by No 10 of 2003.

136AE(5)
Where:

(a) a taxpayer:

(i) is a partnership and carries on a business in a country other than Australia at or through a permanent establishment of the taxpayer in that other country; or

(ii) is a partnership and carries on a business in an area covered by an international tax sharing treaty; or

(iii) carries on a business in Australia at or through a permanent establishment of the taxpayer in Australia and is a partnership in which any of the partners is a non-resident; or

(iv) carries on a business in an area covered by an international tax sharing treaty and also carries on a business somewhere else in Australia at or through a permanent establishment of the taxpayer in Australia and is a partnership in which any of the partners is a non-resident; and

(b) in determining the net income, exempt income or partnership loss of the taxpayer or the extent to which the individual interest of a partner in the net income, exempt income or partnership loss of the taxpayer is attributable to sources in Australia, a question arises whether, and if so, as to the extent to which:

(i) any income derived by the taxpayer is derived from sources in Australia or sources out of Australia; or

(ii) any expenditure incurred by the taxpayer is incurred in deriving income from sources in Australia or sources out of Australia;

(c) none of the preceding provisions of this section applies in relation to the determination of that question;

(d) that question, if determined on the basis of the return furnished by the taxpayer, would have a tax result more favourable to a taxpayer than the result that would occur if that question were determined in accordance with this subsection; and

(e) in the Commissioner ' s opinion, the derivation of the income or the incurring of the expenditure is attributable, in whole or in part, to activities carried on by the taxpayer:

(i) at or through the permanent establishment that is referred to in subparagraph (a)(i) or (iii); or

(ii) in the area covered by the international tax sharing treaty that is referred to in paragraph (a)(ii) or (iv);

the income or expenditure shall be deemed, for all purposes of this Act, to have been derived or to have been incurred in deriving income, as the case may be, from such source, or from such sources and in such proportions, as the Commissioner determines.

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S 137AE(5) amended by No 10 of 2003.

136AE(6)
Where:

(a) a taxpayer:

(i) is the trustee of a trust estate and carries on a business in a country other than Australia at or through a permanent establishment of the taxpayer in that other country; or

(ii) is the trustee of a trust estate and carries on a business in an area covered by an international tax sharing treaty; or

(iii) carries on a business in Australia at or through a permanent establishment of the taxpayer in Australia and is the trustee of a trust estate of which any of the beneficiaries is a non-resident; or

(iv) carries on a business in an area covered by an international tax sharing treaty and also carries on a business somewhere else in Australia at or through a permanent establishment of the taxpayer in Australia and is the trustee of a trust estate of which any of the beneficiaries is a non-resident; and

(b) in determining the net income or exempt income of the trust estate or the extent to which the share of a beneficiary of the net income or exempt income of the trust estate is attributable to sources in Australia, a question arises whether, and if so, as to the extent to which:

(i) any income derived by the taxpayer is derived from sources in Australia or sources out of Australia; or

(ii) any expenditure incurred by the taxpayer is incurred in deriving income from sources in Australia or sources out of Australia;

(c) none of the preceding provisions of this section applies in relation to the determination of that question;

(d) that question, if determined on the basis of the return furnished by the taxpayer, would have a tax result more favourable to a taxpayer than the result that would occur if that question were determined in accordance with this subsection; and

(e) in the Commissioner ' s opinion, the derivation of the income or the incurring of the expenditure is attributable, in whole or in part, to activities carried on by the taxpayer:

(i) at or through the permanent establishment that is referred to in subparagraph (a)(i) or (iii); or

(ii) in the area covered by the international tax sharing treaty that is referred to in paragraph (a)(ii) or (iv);

the income or expenditure shall be deemed, for all purposes of this Act, to have been derived or to have been incurred in deriving income, as the case may be, from such source, or such sources and in such proportions, as the Commissioner determines.

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History

S 136AE(6) amended by No 10 of 2003.

136AE(7)
In the application of the preceding provisions of this section in determining the source or sources of any income derived by a taxpayer or the extent to which expenditure incurred by the taxpayer was incurred in deriving income from a particular source or sources, the Commissioner shall have regard to:

(a) the nature and extent of any relevant business carried on by the taxpayer and the place or places at which the business is carried on;

(b) if any relevant business carried on by the taxpayer is carried on at or through a permanent establishment - the circumstances that would have, or might reasonably be expected to have, existed if the permanent establishment were a distinct and separate entity dealing at arm ' s length with the taxpayer and other persons; and

(c) such other matters as the Commissioner considers relevant.

136AE(8)
A reference in this section to expenditure incurred by a taxpayer in deriving income includes a reference to expenditure incurred by the taxpayer in carrying on a business for the purpose of deriving income.

136AE(8A)
In this section:

(a) a reference to income being derived from a source in Australia is to be read as including a separate reference to income being derived from a source in an area in Australia that is covered by an international tax sharing treaty; and

(b) a reference to expenditure being incurred in deriving income from a source in Australia is to be read as including a separate reference to expenditure being incurred in deriving income from a source in an area in Australia that is covered by an international tax sharing treaty.

Note:

This means that the following are the 3 different kinds of sources referred to in this section:

(a) a source in Australia (but not in an area covered by an international tax sharing treaty);

(b) a source in an area in Australia that is covered by an international tax sharing treaty;

(c) a source out of Australia.

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History

S 136AE(8A) inserted by No 10 of 2003.

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History

Archived:

S 136AE(9) repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 item 136, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .