Australian tax office issues guidance on targeted integrity rules for hybrid mismatches

The Australian Taxation Office (ATO) on April 5 issued a draft law companion ruling (LCR 2019/D1) for public comment addressing Australia’s hybrid mismatch targeted integrity rules.

Australia’s targeted integrity rules, contained in Subdivision 832-J of the Income Tax Assessment Act 1997, aim to prevent circumvention of the hybrid mismatch rule to further clamp down on MNE tax avoidance.

These rules, which would be effective January 1, 2019, address schemes that circumvent the hybrid mismatch rules through routing investments or financing into Australia through an entity located in a no or low tax (10% or less) jurisdiction.

Feedback is requested on the ATO draft by May 10.


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