Work out if the thin capitalisation rules apply to:
Australian entities
- Do any of the following apply?
- The entity has an overseas permanent establishment
- The entity is an Australian controller of a foreign entity
- The entity is an associate of an Australian controller of a foreign entity
- The entity is foreign controlled
- Yes – see question 2
- No – the thin capitalisation rules do not apply
- Does the entity have any debt deductions against the assessable income in the income year?
- Yes – see question 3
- No – the thin capitalisation rules do not apply
- Do the combined debt deductions of the entity and its associate entities exceed $2 million in the income year?
- Yes – see question 4
- No – the thin capitalisation rules do not apply
- Is the entity foreign controlled?
- Yes – see question 6
- No – see question 5
- Is the combined value of the entity's average Australian assets of its associates less than 90% of the entity's average total assets and the average total assets of is associates in the income year?
- Yes – see question 6
- No – the thin capitalisation rules do not apply
- Is the entity a special purpose entity that meets the tests in section 820-39 of the ITAA 1997?
- Yes – the thin capitalisation rules do not apply
- No – the thin capitalisation rules apply
Foreign entities
- Does the entity have any assets in Australia that are capable of producing Australian assessable income?
- Yes – see question 2
- No – the thin capitalisation rules do not apply
- Does the entity have any debt deductions against the assessable income in the income year?
- Yes – see question 3
- No – the thin capitalisation rules do not apply
- Do the combined debt deductions of the entity and its associate entities exceed $2 million in the income year?
- Yes – see question 4
- No – the thin capitalisation rules do not apply
- Is the entity a special purpose entity that meets the tests in section 820-39 of the ITAA 1997?
- Yes – the thin capitalisation rules do not apply
- No – the thin capitalisation rules apply