Section GC 9 — Income Tax Act 2007: Compensating arrangement: person paying less than arm’s length amount

GC 9 Compensating arrangement: person paying less than arm’s length amount When this section applies (1) This section applies when— (a) a person (the taxpayer ) is a party to a transfer pricing arrangement with another person; and (b) an adjustment is made for an income year under either— (i) section GC 7 to an amount payable by the taxpayer under the transfer pricing arrangement; or (ii) section GC 8 to an amount receivable by the taxpayer under the transfer pricing arrangement; and (c) an amount of consideration payable by the taxpayer in the same income year, or in the preceding or next income year, for an acquisition (the compensating acquisition arrangement ) from the same person is less than an arm’s length amount; and (d) either— (i) the transfer pricing arrangement involves goods, services, money, other intangible property, or anything else of the same type as that acquired in the compensating acquisition arrangement; or (ii) the amount of consideration actually payable or receivable in the transfer pricing arrangement is set having regard to the amount of consideration payable under the compensating acquisition arrangement. Paying arm’s length amount (2) For the purposes of calculating the taxpayer’s income tax liability, the amount paid by them in the compensating acquisition arrangement is treated for the corresponding tax year as an amount equal to the arm’s length amount determined under section GC 13 . Defined in this Act: acquisition , amount , arrangement , income tax liability , tax year , transfer pricing arrangement , Compare: 2004 No 35 s GD 13(10)