Australia Tax Agency Clarifies Tax Rules Regarding Preparation of Tax Returns for Private Group Clients

The Australian Taxation Office Nov. 13 clarified tax rules regarding the preparation of tax returns for private group clients. The clarification includes that: 1) the thin capitalization rules may limit debt deductions based on adjusted tax earnings or the amount of eligible third-party debt that a person’s client has; 2) the debt deduction creation rules (DDCR) may disallow debt deductions relating to certain related party arrangements, including wholly domestic funding connected with acquisitions, transactions, and distributions; 3) persons should amend any incorrect tax returns previously lodged; 4) persons should include the debt deductions of all associate entities when determining if ...