Australia: KPMG comments on consultation on proposed amendments to new interest limitation / thin capitalisation rules

KPMG tax professionals submitted a document with comments and recommendations.

KPMG comments on consultation on proposed amendments

Treasury on 18 October 2023 released for consultation exposure draft parliamentary amendments to proposed legislation to amend Australia's interest limitation rules in the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Bill 2023. Read TaxNewsFlash

In response, KPMG tax professionals submitted a document with comments [PDF 297 KB], specifically recommending:

  • Grandfathering of debt arrangements in place before 22 June 2023 under the debt deduction creation rules (DDCR)
  • Removal of the DDCR provisions from the current bill and introduction in a separate bill to provide more time for consultation on the DDCR
  • Exclusion of fully domestic transactions from the scope of the DDCR
  • Inclusion of a principal purpose test in the DDCR
  • Extension of the trust excess tax EBITDA amount mechanism to all entities and both the fixed ratio and group ratio tests



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