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Improving the integrity of the thin capitalisation rules

Key documents

In the 2018-19 Budget, the Government announced that it will implement two changes to improve the integrity of Australia’s thin capitalisation rules. The changes are:

  • requiring entities to align the value of their assets for thin capitalisation purposes with the value included in their financial statements; and
  • ensuring that foreign controlled Australian consolidated entities and multiple entry consolidated groups that have foreign operations are treated as both outward and inward investing entities.

The changes apply from income years commencing on or after 1 July 2019.

The Government has released for public consultation exposure draft legislation and accompanying explanatory material for these changes. The release of the exposure draft legislation follows the publication of the statement of policy intent for the valuation of assets on the Treasury website.

The Government invites interested parties to make a submission.

Responding

You can submit responses to this consultation up until 17 August 2018.

Interested parties are invited to comment on this consultation.

While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment.

Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

How to respond

Post

Address written submissions to:

The Treasury
Langton Crescent
PARKES ACT 2600