As part of the 2022-23 Budget, an integrity measure was announced to address risks to Australia’s domestic tax base stemming from the use of excessive debt deductions.
This measure strengthens Australia’s thin capitalisation rules in line with the Organisation for Economic Cooperation and Development (OECD)’s best practice guidance.
The Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Bill 2023 giving effect to this measure was tabled in Parliament on 22 June 2023. The Bill was referred to the Senate Economics Legislation Committee.
In line with the Committee’s final report, the government has now prepared exposure draft parliamentary amendments to ensure the new thin capitalisation rules are appropriately targeted.
The government is seeking stakeholders’ views on the exposure draft parliamentary amendments and accompanying supplementary explanatory material amending the proposed legislation.
We also seek stakeholder feedback on priority issues that would inform the Australian Taxation Office's administrative approach and public advice and guidance on this measure.
The government will continue to consult on the other elements of its multinational tax integrity package as separate measures.
A previous consultation on the proposed legislation, along with other multinational enterprise (MNE) tax integrity and transparency proposals, was held in March and April 2023.