The Australian Taxation Office (ATO) has published for consultation draft Taxation Ruling (TR) 2019/D2 and draft Law Companion Ruling (LCR) 2019/D1.
TR 2019/D2 Income tax: thin capitalisation - the arm's length debt test
This draft Ruling deals with the application of the arm's length debt test contained in the thin capitalisation rules in Division 820 of the Income Tax Assessment Act 1997 (ITAA 1997).
The thin capitalisation rules set a limit on the amount of debt that can be used to fi…