Law Council of Australia

Business Law Section

Multinational Tax Integrity – Strengthening Australia’s Interest Limitation (Thin Capitalisation) Rules

The Taxation Committee of the Business Law Section of the Law Council of Australia (the Committee) welcomes the opportunity to comment on Treasury’s exposure draft legislation (Exposure Draft) and supplementary explanatory memorandum (Supplementary EM) on proposed changes to Australia’s thin capitalisation rules in Division 820 of the Income Tax Assessment Act 1997.1

The Committee makes the comments on the following aspects of the Exposure Draft and Supplementary EM:

  1. extreme retrospectivity;
  2. uncertainty;
  3. commencement date;
  4. definition of Australian entity in relation to partnerships;
  5. inconsistent treatment of ownership interests;
  6. debt deduction creation rules;
  7. definition of debt deduction; and
  8. form of amendments.

Read the full submission below.


1 Unless otherwise noted, all references to legislation are to the Income Tax Assessment Act 1997

Last Updated on 26/11/2024

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