Draft Legislation to Change Thin Capitalisation Rules
17 December 2009
The Assistant Treasurer has today released for public consultation draft legislation, together with explanatory material, on the proposed changes to the thin capitalisation rules of the income tax law.
Amendments made in 2008 adjusted for the impact of AIFRS on the thin capitalisation position of non-ADI entities.
These proposed changes were announced in the 2009-10 Budget and will apply to ADIs. They will clarify how treasury shares, the business insurance assets known as 'excess market value over net assets' (EMVONA), and capitalised software costs will be treated under the thin capitalisation provisions.
It is intended that the proposed changes will have effect from 1 January 2009.
Submissions close on Friday, 15 January, 2010.
The draft legislation and explanatory material are available at www.treasury.gov.au
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