Thin Capitalisation changes – Labor party proposals

Alia Lum and Jenny Wong outline changes to the thin capitalisation rules as proposed by the Australian Labor Party.

With the Australian Labor Party (ALP) set to form government, Australian entities should start preparing for the announced changes to the thin capitalisation rules, as outlined in its 27 April 2022 media release. Under the new proposals, groups will need to determine if their interest deductions may need to change under the revised safe harbour approach (discussed below); or else have to justify a higher deduction with the more resource-intensive arm’s length debt test or the worldwide geari...

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Authors: Alia Lum, Jenny Wong

Published Date: 23 May 2022