Australian thin capitalization and subsidiary disclosure measures introduced into Parliament

22 June 2023|Tax Alerts, Information Reporting, Legislation & Policy, National/Federal Taxation, Asset Management, Banking & Capital Markets|Australia

A Bill has been introduced to Parliament to amend Australia’s thin capitalization rules by replacing the current asset-based test with three new tests: (i) the Default Fixed Ratio Test (FRT) based on 30% of tax earnings before interest, tax, depreciation and amortization (EBITDA), with potential carryforward of denied deductions (FRT disallowed amounts) for up to 15 years, plus the following two alternative tests; (ii) Group Ratio Test; and (iii) Third-Party Debt Test for general class investors…

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