35.  Reportable arrangements

 

(1)     An “arrangement” is a reportable arrangement if a person is a “participant” in the “arrangement” and the “arrangement”–

 

(a)     contains provisions in terms of which the calculation of interest as defined in section 24J of the Income Tax Act, finance costs, fees or any other charges is wholly or partly dependent on the assumptions relating to the tax treatment of that ‘arrangement’ (otherwise than by reason of any change in the provisions of a tax Act);

 

(b)     has any of the characteristics contemplated in section 80C(2)(b) of the Income Tax Act, or substantially similar characteristics;

 

(c)     gives rise to an amount that is or will be disclosed by any ‘participant’ in any year of assessment or over the term of the ‘arrangement’ as-

 

(i)      a deduction for purposes of the Income Tax Act but not as an expense for purposes of ‘financial reporting standards’; or

 

(ii)     revenue for purposes of ‘financial reporting standards’ but not as gross income for purposes of the Income Tax Act;

 

(d)     does not result in a reasonable expectation of a ‘pre-tax profit’ for any ‘participant’; or

 

(e)     results in a reasonable expectation of a ‘pre-tax profit’ for any ‘participant’ that is less than the value of that ‘tax benefit’ to that ‘participant’ if both are discounted to a present value at the end of the first year of assessment when that ‘tax benefit’ is or will be derived or is assumed to be derived, using consistent assumptions and a reasonable discount rate for that ‘participant’.

 

(2)     An “arrangement” is a “reportable arrangement” if the Commissioner has listed the “arrangement” in a public notice.