Advice under development: Multinational tax integrity – strengthening Australia’s interest limitation (thin capitalisation) rules
Issue: Thin capitalisation
Category: International
Status: Under development
Expected completion: Consultation on potential guidance topics, prioritisation and form closed on 30 April 2024. | See below for expected publication dates of proposed public advice and guidance.
Purpose: On 8 April 2024, the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Act 2024 (the Act) received Royal Assent. | The ATO is proposing to provide guidance setting out the Commissioner’s views on, and approach to, key aspects of the new thin capitalisation and debt deduction creation rules contained in Schedule 2 of the Act. | Consultation on potential guidance topics, prioritisation and form closed on 30 April 2024. On 10 May 2024, we published a summary of PAG topics , outlining topics raised by stakeholders and how these will be prioritised. | The high-priority topics we intend to resource immediately are: | restructures in response to the new law | third party debt test – key concepts, and | interaction of transfer pricing and the new thin capitalisation rules. | We continue to engage with stakeholders on the high-priority topics to develop specific public advice and guidance products. We encourage stakeholders to provide specific, practical examples that clearly demonstrate issues raised, including reference to the relevant provisions and analysis of their potential application.