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13 Jan 10 Draft legislation to change thin capitalisation rules

In a media release issued on 17 December 2009, the Assistant Treasurer, Senator Nick Sherry, announced the release for public consultation of draft legislation, together with explanatory material, on the proposed changes to the thin capitalisation rules of the income tax law.

"...these rules need adjustment following Australia's adoption in 2005 of International Financial Reporting Standards (AIFRS) on the thin capitalisation position of authorised deposit-taking institutions (ADIs)," the Assistant Treasurer said.

The 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 were sought by Friday, 15 January, 2010.

For a copy of the Minister's media release, No 2009/112, 17 December 2009, go here

For a copy of the draft legislation and explanatory material, go here

 


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