The Australian Treasury has launched a public consultation on a new draft law containing measures to strengthen Australia's interest limitation (thin capitalization) rules in line with OECD best practice guidance with effect from 1 July 2023. The explanatory memorandum summarizes the new law as follows. The deadline for comments is 13 April 2023.
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Summary of new law
The Bill introduces new thin capitalisation earnings-based tests for 'general class investors', specifically, a fixed r…