On 21 April 2021, the Australian Taxation Office (ATO) released Draft Practical Compliance Guideline PCG 2021/D3 Imported hybrid mismatch rule – ATO’s compliance approach (PCG 2021/D3).
The imported hybrid mismatch rule operates broadly to disallow a deduction for a payment if the income from such a payment is set-off, directly or indirectly, against a deduction that arises under a hybrid mismatch arrangement in an offshore jurisdiction, referred to as an “offshore hybrid mismatch” (i.e., a hybri…