Published on 09 Feb 10
by NEW SOUTH WALES DIVISION, THE TAX INSTITUTE
In November 2007, the ATO released Draft Tax Determination TD 2007/D20. The draft stated: "..the existence of a safe harbour debt amount for the purposes of Division 820 [Thin Cap] does not prevent the Commissioner from determining an appropriate arm's length cost for all of the debt funding ..". This was followed by the release of a Discussion Paper on "Intra-group finance guarantees and loans" in June 2008, and a number of selected references in 2009 speeches by the Commissioner and other ATO officers.
This paper provides an up-to-date report on subsequent progress, including:
- a summary of the latest ATO position
- Division 13 and its interface with other arm's length rules
- the arm's length principle
- the tax policy perspective.
Current at 12 October 2010
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