The practice statement (PS LA 2015/3) issued on 26 February 2015 sets out a new internal approval process for application of the reconstruction provisions. This law administration practice statement is issued under the authority of the Commissioner and must be read in conjunction with Law Administration Practice Statement PS LA 1998/1.
ATO personnel, including non ongoing staff and relevant contractors, must comply with this law administration practice statement, unless doing so creates unintended consequences or is considered incorrect.
This practice statement does not apply in instances where ATO personnel are merely re-pricing an entity’s actual conditions in accordance with the ‘basic rule’ in subsection 815-130(1) rather than seeking to rely on one of the exceptions at subsections 815-130(2) to 815-130(4) to reconstruct or annihilate the actual commercial or financial relations for the purposes of identifying the arm’s length conditions.
