Last month, legislation was introduced to Parliament that significantly rewrites Australia’s thin capitalisation rules with effect from 1 July 2023, with no grandfathering or transitional rules. The new regime will replace the current asset-based test with an earnings based test that limits net debt deductions to 30% of tax EBITDA.
The ATO recently finalised its guidance (Taxation Ruling TR 2023/2) on when it considers labour costs incurred specifically for constructing and creating capital assets to be capital in nature and therefore not deductible under section 8-1 of the Income Tax Assessment Act 1997.
Entities lending to related parties on complying Division 7A terms will generally earn interest on these loans at benchmark rates. The rate for repayments for the 2022-23 year was set in May 2022 at 4.77%. However, market borrowing rates have significantly increased since last May.
Pitcher Partners and McMahon Clarke, together with the Melbourne and Sydney Compliance Groups, held a Compliance Committee Forum Webinar for a briefing on the latest issues for financial services.
As the end of the financial year approaches, responsible entities, trustees and fund managers should turn immediate attention to taxation, investor reporting and other fund compliance obligations.
With the end of the financial year looming fast, it is an opportune time to consider the tax and financial affairs of your business and ensure that your year-end tax planning is in order.
On Wednesday 10 May 2023, Pitcher Partners Melbourne hosted an in-person event with expert commentary on the Labour Government’s 2023-24 Federal Budget.
Recent developments have confirmed the critical importance of trustees properly considering which beneficiaries should receive distributions and how those distribution entitlements are satisfied.
Recent court cases and ATO guidance products present additional challenges for trustees when considering how to distribute trust income.
The Government will implement new thin capitalisation rules that will operate from 1 July 2023. The proposed new rules will apply to deny interest deductions for taxpayers with foreign shareholders, or foreign operations, or that are part of multinational groups.
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