Australian Tax Office releases draft guideline on determining 'debt quantum' in context of thin-capitalization rules

03 June 2025|Tax Alerts, National/Federal Taxation, Transfer Pricing, Global|Australia

A draft Practical Compliance Guideline (draft PCG) outlines the Australian Taxation Office's (ATO's) compliance approach to transfer pricing analyses undertaken to evidence that the quantum of debt borrowings in Australia are arm's-length, as required under Australia's thin-capitalization rules.
The draft PCG is narrow in scope relative to transfer pricing analyses generally likely to be required in relation to the thin-capitalization provisions. In particular, the PCG applies only to inbound cro…

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