Australia: Government releases amended interest limitation rule

On 28 November 2023, the Australian government released the amendments and a supplementary explanatory memorandum to the interest limitation rules within the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Bill 2023.

The amendments relate to the following matters:

  • Choices under Subdivision 820-AA;
  • The meaning of the obligor group concept has been introduced;
  • An excess tax EBITDA (earnings before interest, taxes, depreciation, and amortization) amount concept has been introduced;
  • The third-party debt test; and
  • The debt deduction creation rules

The Parliamentary amendments commence at the start of the first quarter following Royal Assent and apply to assessments for income years beginning on or after 1 July 2023. However, Subdivision 820-EAA (the debt deduction creation rules) applies in relation to assessments for income years starting on or after 1 July 2024.

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