Australia Seeks Feedback on Revised Thin Capitalization Rules

The Australian government wants feedback on its third-party debt test and re-scoped debt deduction creation rules within its thin capitalization rules draft law.

The consultation released Wednesday comes after business groups blasted an earlier version of the draft law, claiming that it would deny legitimate debt arrangements and hurt production and investment in Australia.

• The third-party debt test now offers recourse for more lending arrangements, and the debt deduction creation rules have additional exclusions, including for special purpose entities under the latest draft law.
• The updated thin capitalization rules, which limit the amount of interest payments on debt ...