PCG 2019/D3 – Thin cap: ATO ‘practical compliance guide’ to using the ‘arm’s length debt test’ – what is the ‘low risk’ approach to this high risk Div 820 approach?

On 28.8.19, the ATO has issued Draft Practical Compliance Guideline PCG 2019/D3 to provide detailed guidance and a risk assessment framework on applying the the arm’s length debt test in the thin capitalisation rules. This followed the earlier release of Draft Ruling TR 2019/D2 on this test (titled: Income tax: thin capitalisation – the arm’s length debt test – on 5.4.19).

See below for further detail about this draft PCG.

FJM 30.8.19

[Tax Month – August 2019]