A T O home
Legal Database
Search   
for 
 
Access the database 
Browse database
Searches  
View last document
Quick access 
View legislation
View a document
Email Cross Reference Material Previous/Next Section Contents Previous/Next Result
Printable version
Printable
version

INCOME TAX ASSESSMENT ACT 1936

PART IVA - SCHEMES TO REDUCE INCOME TAX    View history reference

SECTION 177M  DIVERTED PROFITS TAX - SUFFICIENT ECONOMIC SUBSTANCE TEST  

 View history reference

177M(1)  

This section applies in relation to the relevant taxpayer, in relation to the DPT tax benefit, if the profit made as a result of the scheme by each entity covered by subsection (2) reasonably reflects the economic substance of the entity ' s activities in connection with the scheme.

177M(2)  

This subsection covers an entity if:


(a) the entity is the relevant taxpayer or an associate (within the meaning given by section 318 ) of the relevant taxpayer; and


(b) any of the following apply:


(i) the entity entered into or carried out the scheme or any part of the scheme;

(ii) the entity is otherwise connected with the scheme or any part of the scheme.

177M(3)  

However, subsection (2) does not cover an entity if the entity ' s role in the scheme is minor or ancillary.

177M(4)  

In determining whether the profit made as a result of the scheme by an entity reasonably reflects the economic substance of the entity ' s activities in connection with the scheme, have regard to:


(a) the functions that the entity performs in connection with the scheme, taking into account assets used and risks assumed by the entity in connection with the scheme; and


(b) the documents covered by section 815-135 of the Income Tax Assessment Act 1997 , to the extent that they are relevant to the matters mentioned in paragraph (a) or to any other aspect of the determination; and


(c) any other relevant matters.


 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
Top of page
More information on page