The Australian Taxation Office (ATO) has announced the issuance on 12 August 2020 of final Taxation Ruling (TR) 2020/4 and Practical Compliance Guideline (PCG) 2020/7 concerning the arm’s length debt test for thin capitalisation purposes.
TR 2020/4 applies to years of income commencing both before and after its date of issue, although it will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue. PCG 2020/7 has e…