Issued in early December, the Australian Taxation Office's draft guidance proposed standards for the use of the third-party debt test to decide whether companies can deduct interest and other costs on their debt under Australia's new thin capitalisation rules.

The test had been offered up as a way to make it easier for certain taxpayers like those in the capital-intensive infrastructure and property industries to take such deductions, but A&M experts Shahzeb Panhwar and Joanna Black warn Bloomberg Tax readers that the ATO’s interpretation may make the test “inaccessible and unworkable for many of those taxpayers at whom it is directed.” 

Hear more from their perspective: 

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