Thin capitalisation: Have you correctly identified your debt deductions?

Jenny Wong looks at an ATO ruling affecting cross border finance confirming the commissioner's views on what types of costs are debt deductions that are subject to the thin capitalisation calculations.

It is important to review what you are claiming in relation to cross border debt arrangements.The Australian Taxation Office (ATO) has finalised another ruling affecting cross border finance confirming the ATO’s views on what types of costs are debt deductions that are subject to the thin capitalisation calculations under Division 820 of the Income Tax Assessment Act 1997 (ITAA 97).Although interest expense is typically the largest component of debt financing that can be caught within Austral...

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Authors: Jenny Wong

Published Date: 23 July 2019