Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-25 - TRADING STOCK  

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History

Pt 2-25 inserted by No 121 of 1997.

Division 70 - Trading stock  

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History

Div 70 inserted by No 121 of 1997.

Subdivision 70-B - Acquiring trading stock  

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SECTION 70-20  

70-20   Non-arm ' s length transactions  

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If:

(a) you incur an outgoing that is directly attributable to your buying or obtaining delivery of an item of your *trading stock; and

(b) you and the seller of the item did not deal with each other at *arm ' s length; and

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(c) the amount of the outgoing is greater than the *market value of what the outgoing is for;

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the amount of the outgoing is instead taken to be that market value. This has effect for the purposes of applying this Act to you and also to the seller.

Note:

This section also affects the value of the item of trading stock at the end of an income year if you value it at its cost under section 70-45 (Value of trading stock at end of income year).

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S 70-20 amended by No 101 of 2013, s 3 and Sch 2 items 24 and 25, by substituting " Note " for " Note 1 " and repealing Note 2, 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. Note 2 formerly read:

Note 2:

This section is disregarded in applying Division 13 (about transfer-pricing arrangements) of Part III of the Income Tax Assessment Act 1936 .

S 70-20 amended by No 88 of 2013, s 3 and Sch 7 item 236, by substituting " *arm's length " for " arm's length " in para (b), effective 28 June 2013.

S 70-20 inserted by No 121 of 1997.

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