We've released a discussion paper that addresses the attribution of risk weighted assets (RWA) to the Australian branch of a foreign bank for the purposes of applying the thin capitalisation rules for inward investing entities.
The paper provides our initial view on the topic to deliver certainty and a consistent industry approach.
Key issues addressed in the paper include:
- a suggested approach to attribution of RWA to the Australian branch for thin capitalisation purposes
- our expectations on the maintenance of appropriate documentation to evidence that RWA has been appropriately attributed to the Australian branch.
We're seeking feedback on the discussion paper by 31 May. To provide your feedback, email PGIBankingandFinanceStrategy@ato.gov.au.