INTM551150 - Hybrids: financial instruments (Chapter 3): timing 바카라 사이트 permitted taxable period
Mismatches within case 1 or case 2 are calculated by reference to the ordinary income arising to each payee for the permitted taxable period. The permitted taxable period is defined at s259CC(2) TIOPA 2010.
A permitted taxable period of a payee is a period that begins before the end of 12 months after the end of the payment period. A later period may be permitted if it is just and reasonable for the amount of ordinary income to arise in the later period. The payment period is the payer바카라 사이트s taxable period that includes a deduction for the payment or quasi-payment from which the payee바카라 사이트s ordinary income arises.
For example, X Co has a deduction in respect of a payment in its accounts for the year ended 31 December 2017. Ordinary income arises to Z Co as a result of this payment. The payment period is the year ended 31 December 2017. The permitted taxable period will include Z Co바카라 사이트s accounting periods that begin before 31 December 2018.
The 12-month period recognises that the payer and payee may not have identical taxable periods, and that there may be a short timing delay between when the payer recognises a payment or quasi-payment and when the payee recognises ordinary income in relation to that payment or quasi-payment.
Where ordinary income arises to a payee in a period that begins after the 12-month period, the permitted taxable period is only extended if it is 바카라 사이트just and reasonable바카라 사이트 that ordinary income arises in that later period.
Just and reasonable is not a defined term and therefore takes its ordinary meaning. It asks what is fair, sensible and appropriate depending on the facts, circumstances and the non-tax commercial drivers.
There is unlikely to be a just and reasonable basis for extending the period beyond the 12-month period where the deferral in income recognition results from circumstances, decisions or choices which have the effect of side-stepping the policy intent of the legislation, or which do not reflect commercial arrangements that would be made at arm바카라 사이트s length in these circumstances.
If an amount of ordinary income relating to the payment or quasi-payment does not arise in the permitted taxable period, the payer will be denied a deduction under the counteractions below for the period in which the payment or quasi-payment is made. If ordinary income is brought into account at a later date (outside the permitted taxable period) S259LA allows the payer to deduct all or part of the denied deduction in a later period, see INTM561130.