In March 2023, the Government released exposure draft legislation on new and previously announced changes to Australia’s interest limitation (thin capitalisation) rules as part of a consultation process.
In response, BDO has prepared a submission stating that while it was pleasing to see some of the feedback provided by the Australian tax community being reflected in the Draft Bill, of primary concern is if enacted, the amendment is likely to significantly increase the compliance burden for a wide range of taxpayers, including those who may not have the financial or tax infrastructure to satisfy these requirements. This appears to be particularly applicable to early and mid-life start-up businesses looking to obtain debt funding to fund growth.
Should you have any questions regarding the content of this submission, please contact your BDO tax adviser for further guidance.