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RF 12F: Adjustments: first year additional amounts
or “Calculating additional income from overseas loans in the first year”
You could also call this:

“Choosing to categorise certain income as non-resident financial arrangement income”

You can choose to treat income as non-resident financial arrangement income in certain situations. This applies when you’re part of a financial arrangement described in section RF 2C(1)(b). You can decide to ignore the related-party de minimis mentioned in section RF 2C(3). Even if your deferral calculation is more than 90%, you can choose to ignore this calculation for an arrangement that lasts more than 12 months and where you expect to get non-resident financial arrangement income later on. You need to tell the Commissioner about your choice by the earlier of two dates: the first day you pay interest described in section RF 2(1)(a)(iv), or the last day of the income year when the arrangement becomes a related-party debt.

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Next up: RF 12H: Meaning of related-party debt

or “What counts as a loan between connected parties for tax purposes”
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Part R General collection rules
Withholding tax on non-resident passive income (NRWT)

RF 12GChoosing to treat income as non-resident financial arrangement income

  1. This section applies for the first income year in which the borrower is party to a financial arrangement described in section RF 2C(1)(b).

  2. The borrower may choose to disregard the application of the related-party de minimis referred to in section RF 2C(3).

  3. Despite section RF 2C(4), if the result of the deferral calculation by the borrower is, or is treated as, more than 90%, they may choose to disregard the application of the calculation for an arrangement—

  4. that is for a period of more than 12 months; and
    1. in relation to which they reasonably expect non-resident financial arrangement income will arise for a later income year.

      1. The election must be made by notifying the Commissioner by the earlier of—

      2. the first day on which interest described in section RF 2(1)(a)(iv) is paid:
        1. the last day of the income year in which the arrangement becomes a related-party debt.

          Notes
          • Section RF 12G: inserted, on , by section 279 (and see section 5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
          • Section RF 12G(4)(a): amended (with effect on 30 August 2022), on , by section 112 of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).