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Thin Cap and Transfer Pricing Reform
Does Transfer Pricing take the fixed out of the 30% fixed ratio?
This session will be a practical discussion of how the reform of the transfer pricing rules will be critical in determining the thin cap limit under the new rules.
Exposure draft legislation has been introduced which, if passed, will radically reform Australia’s thin capitalisation rules. It is expected that most taxpayers will be subject to an earnings-based test for income years commencing on or after 1 July 2023 under the new rules, which represents a major shift from the historical asset-based safe-harbour test.
Many taxpayers are expected to be subject to the ‘fixed ratio test’, which broadly speaking will limit interest deductions to 30% of ‘tax EBITDA’, subject to one major exception which has been a sleeper in the reforms.
The transfer pricing rules are also being amended to now limit related-party debt to an arm’s length quantum, which could result in denials of interest deductions at a level below the 30% fixed ratio.
Learning outcomes:
Attendees will gain an understanding of the technical, legislative requirements under the proposed reform as well as a practical application of through case studies.
Suited to:
Lawyers, accountants and in-house tax professionals who are involved in the management of related-party debt for multinationals.
This E-Learning includes:
- a recording of the webinar Event which can be viewed multiple times
- a PDF of the presenter's PowerPoint
- a verbatim Transcript
- any supporting documentation
- a CPD Certificate after successful completion of the Knowledge Quiz
CPD Points: 1