SCHEDULES
SCHEDULE 4Avoidance involving profit fragmentation arrangements
7Adjustments required to be made in relation to arrangements
1
Adjustments must be made so as to counteract the tax advantages that would (ignoring this Schedule) arise from profit fragmentation arrangements.
2
The adjustments—
a
must relate to the expenses, income, profits or losses of the resident party for the tax period in which value is transferred as a result of the material provision,
b
must be based on what the value transferred would have been if it had resulted from a provision made or imposed as between independent parties acting at arm’s length, and
c
must be just and reasonable.
3
References in this paragraph to “the resident party” are references to the resident party at the time at which the material provision is made or imposed.