Understanding the Recent Changes to Australia’s Thin Capitalisation Rules
Australia’s thin capitalisation rules have recently undergone a radical transformation, shifting from an asset-based to an earnings-based approach. This marks a substantial departure from the previous framework and will have profound implications for businesses operating in Australia, particularly those with cross-border investments.
The new rules are designed to further reduce the risk of excessive interest deductions eroding Australia’s tax base, combat tax avoidance and bring Australia closer in line with the OECD's recommended approach.
In this paper, we examine the recent changes to Australia’s thin capitalisation legislation. This paper breaks down the complexities of the new framework, providing clarity on how these changes may impact you.
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If you’d like to understand how these changes may impact your business, get in touch with Hall Chadwick’s Corporate Tax experts today.
