In June 2023, legislation containing new thin capitalisation rules from 1 July 2023 was introduced into Parliament.
Broadly, thin capitalisation applies to entities part of multinational groups that incur debt deductions (e.g. interest) of more than $2 million for an income year (on a group basis).
The new rules broadly seek to directly limit annual debt deductions to 30% of tax earnings before interest, taxes, depreciation and amortisation (tax EBITDA).
Refer to our previous submission in response to Treasury’s August 2022 consultation paper (here), the March 2023 exposure draft legislation (here) and the Senate Economics Committee July 2023 Inquiry into the legislation (here).
The Government has listened to ours and others feedback and proposed several amendments to the legislation. These proposed amendments have been referred back to the Committee for further consideration and report by 5 February 2024.
Pitcher Partners continues to advocate for middle market taxpayers and we made a comprehensive submission in response to this further inquiry.
You can read our submission below.
You can find out more about our advocacy work on the website here.