ACIS Administration (Arm's Length Transactions) Guidelines 2000

Administered by Department of Industry, Science and Resources

Legislation au F2005B02044 Not in force Legislative Instrument

Select Document

I, NICHOLAS HUGH MINCHIN, Minister for Industry, Science and Resources, make these Guidelines under subsection 9 (3) of the ACIS Administration Act 1999.

Dated 29 August 2000

NICK MINCHIN

Minister for Industry, Science and Resources

1 Name of Guidelines

These Guidelines are the ACIS Administration (Arm's Length Transactions) Guidelines 2000.

2 Commencement

These Guidelines commence on 1 September 2000.

3 Objects

These Guidelines set out a way of determining, for the purposes of the Act:

(a) the circumstances when the parties to a relevant transaction are to be treated as not being at arm’s length; and

(b) if the parties to a relevant transaction are to be treated as not being at arm’s length — the arm’s length amount.

4 Definitions

Act means the ACIS Administration Act 1999.

arm’s length amount, for a non-arm’s length relevant transaction, means the amount that would have been the transaction value for the transaction had the parties been at arm’s length.

non-arm’s length relevant transaction, means a relevant transaction the parties to which are to be treated as not being at arm’s length.

participant party, for a relevant transaction, means the party to the transaction who is a participant of ACIS.

transaction value, for a relevant transaction, means:

(a) if the transaction is a sale of motor vehicles, engines or engine components — the production value or sales value of the motor vehicles, engines or engine components; or

(b) if the transaction is a sale of any other goods or services — the production value or sales value of the goods or services; or

(d) if the transaction relates to an investment in research and development — the amount of the investment.

relevant transaction means a transaction mentioned in subsection 9 (1) or (2) of the Act.

Note ACIS, participant, production value, sales value and Secretary are defined in subsection 6 (1) of the Act.

5 Circumstances when parties may be treated as not being at arm’s length

(1) The parties to a relevant transaction may be treated as not being at arm’s length if the parties are related or associated parties.

(2) For these Guidelines, and without limiting the meaning of subsection (1), parties are related or associated parties if:

(a) they are related to each other within the meaning of section 50 of the Corporations Law; or

(b) one party controls the other within the meaning of section 50AA of the Corporations Law; or

6 Arm’s length amount for non-arm’s length relevant transaction

(1) The arm’s length amount for a non-arm’s length relevant transaction may be determined in accordance with this section.

(2) For a non-arm’s length relevant transaction of a kind referred to in paragraph (a), (b) or (d) of the definition of transaction value in section 4, the arm’s length amount is:

(a) the amount determined, according to the principles stated in section 7, by the participant party to be the transaction value; or

(b) if the Secretary does not accept the amount mentioned in paragraph (a) — the amount determined, according to the principles stated in section 7, by the Secretary to be the transaction value.

(3) For a non-arm’s length relevant transaction of a kind referred to in paragraph (c) of the definition of transaction value in section 4, the arm’s length amount is the amount determined, according to the principles stated in section 7, by the participant party to be the transaction value.

(4) However, if the amount determined under subsection (3) is $500 000 or more, the arm’s length amount for the transaction is the amount determined according to the principles stated in section 7, and certified, to be the transaction value by:

(a) a professional valuer appointed by the participant party; or

(b) if the Secretary does not accept the amount certified by the valuer mentioned in paragraph (a) — a professional valuer jointly appointed by the Secretary and the participant party.

(5) In this section:

professional valuer, in relation to a certification mentioned in this section, means a valuer who is professionally qualified to give the certification.

7 Principles for determining the transaction value for a non-arm’s length relevant transaction

(1) The principles stated in this section apply to the determination under subsection 6 (2), (3) or (4) of the transaction value for a non‑arm’s length relevant transaction.

(2) A person may determine the transaction value by using:

(a) a method that involves:

(i) referring to the transaction value for a comparable transaction between parties who are not related or associated parties; and

(ii) working out an adjusted value by adding to, or subtracting from, the value referred to in subparagraph (i), any necessary adjustment to take into account any difference between the non‑arm’s length relevant transaction and the comparable transaction; and

(iii) repeating the steps mentioned in subparagraphs (i) and (ii) for as many comparable transactions as is necessary to give an accurate comparison; and

(iv) determining the transaction value for the non-arm’s length relevant transaction based on the adjusted values; or

(b) any other method, or combination of methods, that can accurately assess the value in the particular case.

(3) The matters that a person may consider in deciding which method or combination of methods to use include the following:

(a) the kind of transaction;

(b) the terms of the transaction;

(d) the market conditions at the time of the transaction;

(e) other commercial and economic realities at the time of the transaction;

(f) any other relevant facts and circumstances of the case.

(4) A person should use the method, or a combination of different methods, that produces the highest degree of comparability in the particular case.

(5) In this section:

comparable transaction, in relation to a non-arm’s length relevant transaction, means a transaction that:

(a) is of the same kind as the non‑arm’s length relevant transaction; and

(b) takes place about the same time as the non‑arm’s length relevant transaction; and

transaction value, for a comparable transaction, means:

(a) if the comparable transaction is a relevant transaction — the transaction value as defined in section 4; or

(b) if the comparable transaction is not a relevant transaction — the amount that would have been the transaction value, as defined in section 4, if the comparable transaction were a relevant transaction.

Overview

The ACIS Administration (Arm's Length Transactions) Guidelines 2000 were enacted to address the need for a framework to determine when parties to certain transactions are not operating at arm's length and to ascertain the appropriate arm's length value for such transactions. These guidelines were introduced under subsection 9(3) of the ACIS Administration Act 1999 and were made by Nicholas Hugh Minchin, the Minister for Industry, Science, and Resources. The primary objective of these guidelines is to establish a consistent method for identifying and calculating the arm's length value in transactions that involve related or associated parties, ensuring that the transactions are priced fairly and transparently. By providing clear criteria and principles for determining the arm's length value, the guidelines aim to support the integrity and fairness of transactions conducted under the auspices of the ACIS Administration Act.

Scope and Application

The ACIS Administration (Arm's Length Transactions) Guidelines 2000 apply to relevant transactions as defined in the ACIS Administration Act 1999, which include sales of motor vehicles, engines or engine components, other goods or services, and investments in plant and equipment or research and development. These guidelines pertain to participants of the Australian Car Industry Superannuation Scheme (ACIS), thereby affecting entities and individuals engaged in transactions involving ACIS participants. The Guidelines aim to establish when parties to such transactions are considered not to be at arm's length and to determine the arm's length amount for non-arm's length transactions. The application of these guidelines is national, in line with the jurisdiction of the Commonwealth of Australia, as it pertains to the federal legislation under which the guidelines are made. The Guidelines do not explicitly state exclusions or exemptions but provide detailed criteria for determining arm's length amounts, including the appointment of professional valuers for transactions exceeding $500,000. The guidelines also extend their application through subordinate instruments by providing principles for determining the transaction value based on comparable transactions and other methods.

Key Provisions

The ACIS Administration (Arm's Length Transactions) Guidelines 2000 (Guidelines) are instrumental in defining how certain transactions are to be treated for the purposes of the ACIS Administration Act 1999. The Guidelines, which came into effect on 1 September 2000, provide clarity on when parties to a relevant transaction are deemed to be at arm's length and how to ascertain the arm's length amount in cases where they are not. The Guidelines are structured to address two primary areas: first, identifying circumstances under which parties may be treated as not being at arm’s length (Section 5); and second, establishing the arm’s length amount for transactions where parties are not at arm’s length (Section 6). These provisions are crucial for ensuring that transactions are appropriately valued and reported. The Guidelines impose specific obligations on parties involved in relevant transactions. For instance, parties must ensure that transactions are accurately classified as either at arm's length or not, as per the criteria outlined in Section 5. When parties are not at arm's length, they are required to determine the arm's length amount according to the principles set forth in Section 6. This includes using either a method that references comparable transactions or any other method that accurately assesses the transaction value. Furthermore, if the transaction value exceeds $500,000, a professional valuer must be appointed to certify the transaction value. These obligations are designed to ensure transparency and fairness in the valuation of transactions. Failure to comply with the Guidelines can result in various consequences. Although the Guidelines themselves do not explicitly state penalties for non-compliance, breaches of the underlying ACIS Administration Act 1999 may lead to civil or criminal penalties. For example, under Section 24 of the ACIS Administration Act 1999, failure to provide accurate information can result in civil penalties, including fines of up to $22,200 for individuals and $111,000 for corporations. In more severe cases, criminal penalties may apply, including imprisonment for up to five years. Additionally, the Act allows for the imposition of pecuniary penalties, which can be up to three times the benefit obtained from the contravention. These potential penalties underscore the importance of adhering to the Guidelines and the underlying legislation.

Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Regulatory Standards; Compliance Obligations
Catchwords: arm’s length amount; non-arm’s length relevant transaction

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

Legislation content

Overview

Scope and Application

Key Provisions

Legal classification tags

Interactions

Authorises

All Versions