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When calculating a taxpayer’s aggregated turnover, the annual turnovers of the taxpayer, entities connected with the taxpayer and entities that are affiliates of the taxpayer are taken into account.
But what happens if the connected entities or affiliates have a different income year period than the taxpayer?
The Commissioner of Taxation has provided guidance on this in Draft Taxation Determination TD 2021/D1.
In that Draft Taxation Determination, the Commissioner of Taxation states that aggregated turnover is calculated by reference to the taxpayer’s income year period, such that the connected entities’ and affiliates’ annual turnovers for the same income year period must be taken into account (irrespective of whether the connected entity or affiliate has the same income year period).
Example
Taxpayer A has a 12-month income year ending on each 30 June. Connected Entity B has a 12-month income year ending on each 31 December. When calculating the aggregated turnover for Taxpayer A for the income year commencing 1 July 2020 and ending 30 June 2021, the annual turnover of Connected Entity B for the period 1 July 2020 to 30 June 2021 must be calculated and taken into account.