Advice under development: Factors to consider when determining the amount of your inbound cross-border related party financing arrangement – ATO compliance approach
Issue: Thin capitalisation
Category: International
Type of advice: Final Practical Compliance Guideline
Status: Under development
Expected completion: September 2026
Purpose: The third priority topic is practical guidance in relation to the arm’s length amount of a debt interest for transfer pricing purposes (Subdivision 815B of the Income Tax Assessment Act 1997 ). This Guideline will focus on broad-based principles for taxpayers to consider in determining and testing the amount of their cross-border related party finance arrangement. It also outlines specific features of financing arrangements and transfer pricing analysis which we would view as being cause for concern.
Comments: Draft Practical Compliance Guideline PCG 2025/D2 Factors to consider when determining the amount of your inbound, cross-border related party financing arrangement – ATO compliance approach published on 29 May 2025. Comments period closed on 14 July 2025.
Referenced documents: PCG 2025/D2