Source: Taxation In Australia Journal Article
Published Date: 1 Sep 2018
Australia's hybrid mismatch rules are expected to be enacted shortly as part of the Treasury Laws Amendment (Tax Integrity and Other Measures No. 2) Act 2018. The hybrid mismatch rules contain the targeted integrity rule (TIR) " a measure that represents a significant departure from the recommendations in the Organisation for Economic Co-operation and Development (OECD) action 2 report. The objective of the TIR is to prevent multinational groups from being able to enter into arrangements designed to circumvent the hybrid mismatch rules. The TIR comprises complex tests involving concepts that are new to Australian tax law and not yet the subject of judicial or ATO guidance. While instructive on certain points, the explanatory memorandum does not clarify a number of significant questions and, accordingly, the TIR's application in practice remains subject to material uncertainties. This article provides a detailed analysis of the TIR, its requirements and exceptions, and examines its effect on existing structures and regimes.
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