The Australian Taxation Office (ATO) on December 11 announced that it intends to add two draft schedules to Practical Compliance Guideline( PCG 2017/4), which sets out the ATO’s compliance approach to cross-border related party financing arrangements and similar transactions.
The ATO said that it is working on a draft schedule that will address the principles for determining whether interest free loans made between related parties should be characterized as debt or equity in identifying arm’s length conditions. The project is slated for completion by March 30, 2018, the ATO said.
The second draft schedule will set out the risk indicators associated with a financing arrangement, related transaction, or contract entered into with cross-border related parties involving derivatives. This project is expected to be complete by March 2, 2018. the ATO said.
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