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Section H: Debt deduction creation rules

Instructions to complete Section H: Debt deduction creation rules.

Published 2 June 2025

About debt deduction creation

Treasury Laws Amendment (Making Multinationals Pay Their Fair Share - Integrity and Transparency) Act 2024 (Amending Act) enacted the debt deduction creation rules (DDCR) in Subdivision 820-EAA of the ITAA 1997. The DDCR came into effect for debt deductions in income years starting on or after 1 July 2024.

Section H requires information about how the DDCR in Subdivision 820-EAA of the ITAA 1997 were applicable to you, including any restructuring by 2025 early balancing entities in light of anticipated future application of the DDCR.

Q52 Were the debt deduction creation rules applicable to you?

If the DDCR in Subdivision 820-EAA of the ITAA 1997 were applicable to you, print X in the Yes box at question 52 – label A, and go to question 53.

For the purposes of answering question 52, you treat the DDCR as applicable to you unless you fall into one of the following categories in Table: Reason why the DDCR are not applicable to you.

If your income year commences before 1 July 2024 and you aren't an entity covered by the below question 52 code table, print X in the Yes box at question 52 – label A and go to question 53. If you're an entity covered by the below question 52 code table, print X in the No box at question 52 – label A and provide the applicable code at question 52 – label B.

If you're an entity which has made, or is taken to have made, a choice to apply the third party debt test under subsection 820-46(4) or subsection 820-46(5) of the ITAA 1997 for your 2024–25 income year and are not covered by the below question 52 code table, you print X in the Yes box at question 52 – label A and then:

  • Go to question 53 about restructures.
  • Follow the specific instructions for questions 54 to 58 by printing X in the No box at label A of each of those questions.

For all entities:

  • If you aren't an entity covered by the below question 52 code table for your 2024–25 income year, you should print X in the Yes box at question 52 – label A and go to question 53.
  • If you're an entity covered by the below question 52 code table for your 2024–25 income year:
    • Print X in the No box at question 52 – label A
    • Print the applicable code at question 52 – label B selected from the table below (and also shown at Appendix 27).
Table: Reason why the DDCR are not applicable to you

Code

Reason why the DDCR were not applicable to you

1

You were neither a general class investor under subsection 820-46(2) nor an inward or outward investing financial entity (non-ADI) under subsections 820-85(2) or 820-185(2)

2

Together with your associate entities, you had $2 million or less of debt deductions for the income year

3

You were a securitisation vehicle within the meaning of subsection 820-942(2) of the ITAA 1997

4

You were a special purpose entity within the meaning of section 820-39 of the ITAA 1997

If you're an Australian plantation forestry entity to which the DDCR do not apply, write code 1 at question 52 – label B.

Where you're one of the following kinds of entities for the income year, you will not be subject to the DDCR and do not need to complete Section H for the income year:

  • an entity whose debt deductions, together with any associate entities, are $2 million or less for the income year per section 820-35 of the ITAA 1997;
  • certain special purpose entities under section 820-39 of the ITAA 1997 where all of the following conditions are satisfied:
    • the entity is established for the purposes of managing some or all of the economic risk associated with assets, liabilities or investments;
    • the total value of debt interests in the entity is at least 50% of the total value of the entity's assets; and
    • the entity is an insolvency remote special purpose entity according to the criteria of an internationally recognised rating agency that are applicable to the entity's circumstances. That entity does not have to have been rated by a rating agency.
  • an entity that is an (inward or outward) authorised deposit-taking institution (ADI)
  • an entity that is a securitisation vehicle under subsection 820-942(2) of the ITAA 1997 where all of the following conditions are satisfied:
    • it is established for the purposes of acquiring, funding and holding securitised assets
    • it has acquired the securitised assets from another entity (the originator)
    • the acquisition of the securitised assets is wholly funded by the issuing of debt interests by the entity
    • in issuing the debt interest, the entity does not receive any guarantee, security or other form of credit support from any of its associate entities, the originator or any associate entity of the originator
    • it has not issued debt interests for any purpose other than for the purpose of funding the acquisition of the securitised assets
    • there are no debt interests issued to the entity by any of the entity's associate entities, the originator or any associate entity of the originator; and
    • any arrangements the entity has with any of its associate entity, the originator or any associate entity of the originator are those that would reasonably be expected to have been entered into by parties dealing at arm's length with each other.
  • an Australian plantation forestry entity which solely or predominantly carries on a business of establishing and tending trees for felling in Australia.

For more information about the debt deduction creation rules, see Debt Deduction Creation Rules.

Q53 Restructuring in response to debt deduction creation rules

Did you restructure or replace an arrangement during the current or prior income year which would have satisfied the conditions in subsection 820-423A(2) or (5), if the arrangement was still in place and the debt deduction creation rules were applicable? Disregard paragraphs 820-423A(2)(g) and (5)(f) when answering this question.

Question 53 requires you to provide information if you restructured or replaced an arrangement during the current or prior income year which would have satisfied the conditions in subsections 820-423A(2) or 820-423A(5) of the ITAA 1997 if the arrangement hadn't been restructured or replaced and had remained in place after the DDCR applied to you.

If your 2025 income year commenced before 1 July 2024, you answer this question on the basis of whether the arrangement which you restructured or replaced in the current or prior income year would be subject to the DDCR if the arrangement had remained in place after commencement of your following income year starting after 30 June 2024.

The purpose of this question is to identify risks associated with restructuring in light of the debt deduction creation rules in Subdivision 820-EAA of the ITAA 1997 applying from income years starting on or after 1 July 2024.

This question only requires you to disclose where a restructure or replacement of an arrangement was undertaken or started to occur during the 2024–25 income year or the prior year. It doesn't require you to disclose arrangements where future debt deductions for the arrangement may be disallowed under Subdivision 820-EAA of the ITAA 1997 if the arrangement hasn't been restructured or replaced (or started to be restructured or replaced) during the 2024–25 income year or the prior year.

If you didn't restructure or replace (or start to restructure or replace) an arrangement during the 2024–25 income year or the prior year which would have satisfied the conditions in subsections 820-423A(2) or 820-423A(5) of the ITAA 1997 if the arrangement had remained in place after the commencement of your income year starting on or after 1 July 2024, print X in the No box at question 53 – label A then go to question 54.

If you did restructure or replace (or start to restructure or replace) an arrangement during the 2024–25 income year or the prior year which would have satisfied the conditions in subsections 820-423A(2) or 820-423A(5) of the ITAA 1997 if the arrangement had remained in place after the commencement of your income year starting on or after 1 July 2024, print X in the Yes box at question 53 – label A and complete label B of this question 53 as required below for each of the top three most material restructuring events.

At question 53 – labels B1a, B2a, and B3a, write a description, including the level of information set out below, of:

  • The arrangements that were restructured or replaced (prior arrangements), including how the DDCR applied to debt deductions arising in connection with the prior arrangements if they had remained in place until after the DDCR applied to you.
  • The steps involved in the restructure or replacement of the prior arrangements including the tax effect of the restructure or replacement.

The description you write at question 53 – labels B1a, B2a, and B3a should include the following information:

  • If the prior arrangements would have satisfied the conditions in subsection 820-423A(2), a description of the prior arrangements including:
    • The following information for the debt or other financial arrangement giving rise to the debt deductions within the meaning of paragraph 820-423A(2)(d):
      • the nature and terms of the debt or other financial arrangement, including type of financial arrangement, amount of the debt or other financial arrangement issued or obtained, amount and nature of the return payable or accruing for the debt or other financial arrangement in respect of which debt deductions arose, for example, interest at 6 per cent per annum payable quarterly in arrears
      • the parties to the debt or other financial arrangement
      • the date on which the debt interest or other financial arrangement was issued or entered into.
    • Details of all CGT assets or the legal or equitable obligations that were acquired within the meaning of paragraph 820-423A(2)(a) and the date(s) on which they were acquired.
    • Names and details (including tax residency) of the acquirer and associate disposers, including any relevant associate pairs of the acquirer or associate disposer, within the meaning of subsection 820-423A(2).
    • Whether you were the acquirer or another relevant entity within the meaning of paragraph 820-423A(2)(c).
    • The total estimated debt deductions for the income year starting on or after 1 July 2024 that would have been disallowed, for your first income year starting after 30 June 2024, under Subdivision 820-EAA of the ITAA 1997 if the prior arrangements had remained in place after commencement of that income year.
  • If the prior arrangements would have satisfied the conditions in subsection 820-423A(5), a description of the prior arrangements including:
    • The following information for the financial arrangement within the meaning of subsection 820-423A(5):
      • the nature of the financial arrangement including type of financial arrangement, amount of the debt or other financial arrangement issued or obtained, amount and nature of the return payable or accruing for the debt or other financial arrangement in respect of which debt deductions arose, for example, interest at 6 per cent per annum payable quarterly in arrears
      • the parties to the financial arrangement
      • the date on which the financial arrangement was issued or entered into.
    • How the payer used the financial arrangement to fund or facilitate the funding or one or more payments or distributions within the meaning of paragraph 820-423A(5)(b).
    • Details of the payments or distributions made to an associate pair of the payer covered by paragraph 820-423A(5)(b) including:
      • the date(s) on which the payments or distributions were made
      • the nature of the payments and distributions
      • the names and details (including tax residency) of the entities to which the payments were made.
    • Whether you were the payer or another relevant entity within the meaning of paragraph 820-423A(5)(c).
    • The total estimated debt deductions for the income year starting on or after 1 July 2024 that would have been disallowed, for your first income year starting after 30 June 2024, under Subdivision 820-EAA of the ITAA 1997 if the prior arrangements had remained been in place after commencement of that income year.
  • A high-level description of each of the steps in connection with the restructuring or replacement of the prior arrangements including:
    • The steps involved in terminating or otherwise ending, assigning or modifying the prior related party debt or financial arrangements in relation to the acquisition or holding of a CGT asset or a legal or equitable obligation within the meaning of subsection 820-423A(2).
    • The steps involved in terminating or otherwise ending, assigning or modifying the prior financial arrangements used to fund or facilitate the funding of the relevant payment or distribution within the meaning of subsection 820-423A(5).
    • The steps involved in entering into any new arrangement replacing, or in connection with restructuring, the prior arrangements.
    • The tax consequences of the restructure or replacement arrangements including whether Subdivision 820-EAA applies to the restructure or replacement arrangement.
  • Whether you received any tax advice, and who provided the tax advice, in relation to applying provisions in Subdivision 820-EAA of the ITAA 1997 to:
    • Your prior arrangements
    • The restructure or replacement of your prior arrangements.

At question 53 – labels B1b, B2b, and B3b, print X at the corresponding box indicating whether your taxable income remained the same, increased or decreased as a result of the restructure, if compared to the prior arrangement that was restructured or replaced.

Incorporating your short form local file disclosures at Q53, label B1

If you have disclosed a restructure in your short form local file for the income year that you're required to disclose at question 53 for the income year, in order to minimise reporting duplication, you can choose to incorporate by reference the disclosures that you have made in your short form local file about the restructure, by writing at question 53 – labels B1a, B2a or B3a:

  • You incorporate by reference the disclosures you have made in your short form local file for the income year for the question 53 restructuring event.
  • A sufficient description of the particular question 53 restructuring event to enable the restructure disclosures in your short form local file, that you're incorporating by reference, to be readily identified.

For the avoidance of doubt, incorporating your 2025 short form local file disclosures about a particular restructure does not reduce the need to provide any required information about the restructure at question 53 – labels B1a, B2a or B3a that has not been included in your short form local file disclosures. For example, information about who provided any tax advice in relation to applying provisions in Subdivision 820-EAA in connection with the prior arrangements.

Special transitional reporting rule for 2024–25 year

For the 2024–25 income year only, if you're disclosing a restructure in your short form local file for your 2024–25 income year that you're required to disclose at question 53 for the income year and you aren't lodging your 2024–25 short form local file at or before the time of lodgment of your 2025 tax return, you can choose to incorporate by reference the disclosures that you will be making in your 2024–25 short form local file about the restructure by writing, at question 53 – labels B1a, B2a or B3a:

  • You're not lodging your 2024–25 short form local file for the income year at or before the time of lodgment of your tax return for the income year.
  • You incorporate by reference the disclosures in your 2024–25 short form local file, that you will be lodging by its due date, for the question 53 restructuring event.
  • A sufficient description of the particular question 53 restructuring event to enable the restructure disclosures in your 2024–25 short form local file, that you're incorporating by reference, to be readily identified.

For the avoidance of doubt, incorporating your 2025 short form local file disclosures you will be making by the due date about a particular restructure does not reduce the need to provide any required information about the restructure at question 53 – labels B1a, B2a or B3a that will not be included in your 2024–25 short form local file disclosures, for example, information about who provided any tax advice in relation to applying provisions in Subdivision 820-EAA in connection with the prior arrangements.

Q54 Prior income year acquisition

Question 54 helps us to determine whether the DDCR may apply in connection with any prior year acquisitions of CGT asset(s), or legal or equitable obligation(s), from an associate pair.

If you have, in a prior income year, directly or indirectly acquired a CGT asset or legal or equitable obligation, from an associate pair, other than a CGT asset covered by section 820-423AA of the ITAA 1997, print X in the Yes box at question 54 – label A and then go to question 54 – label B.

If you have not, in a prior income year, directly or indirectly acquired a CGT asset or legal or equitable obligation, from an associate pair, other than a CGT asset covered by section 820-423AA of the ITAA 1997, print X in the No box at question 54 – label A and then go to question 55.

Special reporting rule for entities treated as choosing the third party debt test for the income year

If you're an entity which has made, or is taken to have made, a choice to apply the third party debt test under subsection 820-46(4) or subsection 820-46(5) of the ITAA 1997 for your 2024–25 income year, print X in the No box at question 54 – label A and then go to question 55.

Special transitional reporting rule for 2024–25 year

For the 2024–25 income year only, if you're a 2025 early balancer with an income year starting before 1 July 2024, print X in the No box at question 54 – label A and then go to question 55.

Debt deductions

If any of your debt deductions for the 2024–25 income year were, wholly or partly, in relation to the acquisition or holding of the CGT asset(s), or legal or equitable obligation(s), acquired in a prior income year, print X in the Yes box at question 54 – label B and then go to question 54 – label C.

If none of your debt deductions for the 2024–25 income year were, wholly or partly, in relation to the acquisition or holding of the CGT asset(s), or legal or equitable obligation(s), acquired in a prior income year, print X in the No box at question 54 – label B and then go to question 55.

For more information about the meaning of debt deductions, see Debt Deduction.

Debt deductions for amounts payable to associate pair

If any of these debt deductions are referable to an amount paid or payable, either directly or indirectly, to an associate pair covered by paragraph 820-423A(2)(e), print X in the Yes box at question 54 – label C and then go to question 54 – label D.

If none of these debt deductions are referable to an amount paid or payable, either directly or indirectly, to an associate pair covered by paragraph 820-423A(2)(e), print X in the No box at question 54 – label C and then go to question 55.

Debt deductions disallowed in connection with prior year acquisitions

At question 54 – label D, write the total amount of these debt deductions disallowed due to the operation of subsection 820-423A(2) and then go to question 54 – label E.

Top 3 most material arrangements

At question 54 – label E, provide the following information in relation to the top 3 most material arrangements for which these debt deductions are disallowed due to subsection 820-423A(2).

  • At question 54 – labels E1a, E2a and E3a, write the value of the prior year acquisition.
  • At question 54 – labels E1b, E2b and E3b, write the amount of debt deductions disallowed in connection with the corresponding prior year acquisition.
  • At question 54 – labels E1c, E2c and E3c, provide a description of the corresponding prior year acquisition including:
    • Whether the arrangement is still in place
    • The nature of the CGT asset(s), or legal or equitable obligation(s), that were acquired
    • Details of the counterparty and/or associate pair(s)
    • The tracing/apportionment method used to calculate the debt deductions.

Q55 Prior income year payments or distribution

Question 55 helps us to determine whether the DDCR may apply in connection with any prior year payments or distributions made to an associate pair.

If you have, in a prior income year, directly or indirectly made one or more payments or distributions covered by subsection 820-423A(5A) to an associate pair, print X in the Yes box at question 55 – label A and then go to question 55 – label B.

If you have not, in a prior income year, directly or indirectly made one or more payments or distributions covered by subsection 820-423A(5A) to an associate pair, print X in the No box at question 55 – label A and then go to question 56.

Special reporting rule for entities treated as choosing the third party debt test for the income year

If you're an entity which has made, or is taken to have made, a choice to apply the third party debt test under subsection 820-46(4) or subsection 820-46(5) of the ITAA 1997 for your 2024–25 income year, print X in the No box at question 55 – label A and then go to question 56.

Special transitional reporting rule for 2024–25 year

For the 2024–25 income year only, if you're a 2025 early balancer with an income year starting before 1 July 2024, print X in the No box at question 55 – label A and then go to question 56.

Financial arrangement

If you have used a financial arrangement to fund or facilitate the funding of any of those prior year payments or distributions covered by subsection 820-423A(5A), print X in the Yes box at question 55 – label B and then go to question 55 – label C.

If you have not used a financial arrangement to fund or facilitate the funding of any of those prior year payments or distributions covered by subsection 820-423A(5A), print X in the No box at question 55 – label B and then go to question 56.

Debt deductions

If any of your debt deductions for the 2024–25 income year were, wholly or partly, in relation to those financial arrangements, print X in the Yes box at question 55 – label C and then go to question 55 – label D.

If none of your debt deductions for the 2024–25 income year were, wholly or partly, in relation to those financial arrangements, print X in the No box at question 55 – label C and then go to question 56.

Debt deductions for amounts payable to associate pair

If any of these debt deductions are referable to an amount paid or payable, either directly or indirectly, to an associate pair covered by paragraph 820-423A(5)(e), print X in the Yes box at question 55 – label D and then go to question 55 – label E.

If none of these debt deductions are referable to an amount paid or payable, either directly or indirectly, to an associate pair covered by paragraph 820-423A(5)(e), print X in the No box at question 55 – label D and then go to question 56.

Debt deductions disallowed in connection with prior year prescribed payments

At question 55 – labels E, write the total amount of these debt deductions disallowed due to the operation of subsection 820-423A(5), and then go to question 55 – label F.

Top 3 most material arrangements

At question 55 – label F, provide the following information in relation to the top 3 most material arrangements for which these debt deductions are disallowed due to subsection 820-423A(5).

  • At question 55 – labels F1a, F2a and F3a, write the value of the prior year payments or distributions.
  • At question 55 – labels F1b, F2b and F3b, write the amount of debt deductions disallowed in connection with the corresponding prior year payments or distributions.
  • At question 55 – labels F1c, F2c and F3c, provide a description of the corresponding prior year payments or distributions including:
    • Whether the arrangement is still in place
    • The nature of the payments or distributions
    • Details of the counterparty and/or associate pair(s)
    • The tracing/apportionment method used to calculate the debt deductions.

Q56 Current income year acquisition

Question 56 helps us to determine whether the DDCR may apply in connection with any current year acquisitions of CGT asset(s), or legal or equitable obligation(s), from an associate pair.

If you have, in the 2024–25income year, directly or indirectly acquired a CGT asset, or legal or equitable obligation, from an associate pair, print X in the Yes box at question 56 – label A and write the total value of associate pair acquisition(s) for the 2024–25 income year at question 56 – label B, and then go to question 56 – label C.

If you did not, in the 2024–25income year, directly or indirectly acquire a CGT asset, or legal or equitable obligation, from an associate pair, print X in the No box at question 56 – label A and then go to question 57.

Special reporting rule for entities treated as choosing the third party debt test for the income year

If you're an entity which has made, or is taken to have made, a choice to apply the third party debt test under subsection 820-46(4) or subsection 820-46(5) of the ITAA 1997 for your 2024–25 income year, print X in the No box at question 56 – label A and then go to question 57.

Special transitional reporting rule for 2024–25 year

For the 2024–25 income year only, if you're a 2025 early balancer with an income year starting before 1 July 2024, print X in the No box at question 56 – label A, and then go to question 57.

Exceptions for acquisition of certain CGT assets  

If none of the exceptions in section 820-423AA applied to the current year acquisitions, print X in the No box at question 56 – label C and then go to question 56 – label E.

If any of the exceptions in the section 820-423AA apply to the current year acquisitions:

  • Print X in the Yes box at question 56 – label C
  • Write the applicable code, at question 56 – label D, selected from the table below (and also shown at Appendix 28) for the primary type of exception which is applicable to the acquisitions, then go to question 56 – label E.
Table: Exception for CGT asset acquisition

Code

Exception

1

Acquisition of new membership interests covered by subsection 820-423AA(1)

2

Acquisition of certain new depreciating assets covered by subsection 820-423AA(2)

3

Acquisition of certain debt interests covered by subsection 820-423AA(3)

Debt deductions

If any of your debt deductions for the 2024–25 income year were, wholly or partly, in relation to the acquisition or holding of the CGT asset(s), or legal or equitable obligation(s), acquired in the current income year, print X in the Yes box at question 56 – label E and then go to question 56 – label F.

If none of your debt deductions for the 2024–25 income year were, wholly or partly, in relation to the acquisition or holding of the CGT asset(s), or legal or equitable obligation(s), acquired in the current income year, print X in the No box at question 56 – label E and then go to question 57.

Debt deductions for amounts payable to associate pair

If any of these debt deductions are referable to an amount paid or payable, either directly or indirectly, to an associate pair covered by paragraph 820-423A(2)(e), print X in the Yes box at question 56 – label F and then go to the question 56 – label G.

If none of these debt deductions are referable to an amount paid or payable, either directly or indirectly, to an associate pair covered by paragraph 820-423A(2)(e), print X in the No box at question 56 – label F and then go to the question 57.

Debt deductions disallowed in connection with current year acquisitions

At question 56 – label G, write the total amount of these debt deductions disallowed due to the operation of subsection 820-423A(2) and then go to question 56 – label H.

Top 3 most material arrangements

At question 56 – label H, provide the following information in relation to the top 3 most material arrangements for which these debt deductions are disallowed due to subsection 820-423A(2).

  • At question 56 – labels H1a, H2a and H3a, write the value of the current year acquisition.
  • At question 56 – labels H1b, H2b and H3b, write the amount of debt deductions disallowed in connection with the corresponding current year acquisition.
  • At question 56 – labels H1c, H2c and H3c, write the applicable code, selected from the table below (and also shown at Appendix 29) for the type of corresponding current year acquisition.
Table: Type of acquisition

Code

Type of acquisition

1

Shares and other membership interests (excluding membership interests acquired for trading or otherwise on revenue account)

2

Real property

3

Tangible property of a revenue nature (not real property)

4

Tangible property of a capital (non-revenue) nature (not real property)

5

Debt interests of a revenue nature

6

Debt interests of a capital (non-revenue) nature

7

Other intangible property of a revenue nature

8

Other intangible property of a capital (non-revenue) nature

9

Any other CGT asset, or legal or equitable obligation
  • At question 56 – labels H1d, H2d and H3d, provide a description of the corresponding acquisition including:
    • A description of the CGT asset(s), or legal or equitable obligation(s), that were acquired
    • Details of the counterparty and/or associate pair(s)
    • The tracing/apportionment method used to calculate the debt deductions.

Q57 Current income year payments or distribution

Question 57 helps us to determine whether the DDCR may apply in connection with any current income year payments or distributions made to an associate pair.

If you have, in the 2024–25 income year, directly or indirectly, made one or more payments or distributions covered by subsection 820-423A(5A) to an associate pairprint X in the Yes box at question 57 – label A and write the total value of payments or distributions covered by subsection 820-423A(5A) for the 2024–25 income year at question 57 – label B.

If you have not, in the 2024–25 income year, directly or indirectly, made one or more payments or distributions covered by subsection 820-423A(5A) to an associate pair, print X in the No box at question 57 – label A and then go to question 58.

Special reporting rule for entities treated as choosing the third party debt test for the income year

If you're an entity which has made, or is taken to have made, a choice to apply the third party debt test under subsection 820-46(4) or subsection 820-46(5) of the ITAA 1997 for your 2024–25 income year, print X in the No box at question 57 – label A and then go to question 58.

Special transitional reporting rule for 2024–25 year

For the 2024–25 income year only, if you're a 2025 early balancer with an income year starting before 1 July 2024, print X in the No box at question 57 – label A, and then go to question 58.

Financial arrangement

If you have used a financial arrangement to fund or facilitate the funding of any of those current year payments or distributions covered by subsection 820-423A(5A), print X in the Yes box at question 57 – label C and then go to question 57 – label D.

If you have not used a financial arrangement to fund or facilitate the funding of any of those current year payments or distributions covered by subsection 820-423A(5A), print X in the No box at question 57 – label C and then go to question 58.

Debt deductions

If any of your debt deductions for the 2024–25 income year were, wholly or partly, in relation to those financial arrangements, print X in the Yes box at question 57 – label D, and then go to question 57 – label E.

If none of your debt deductions for the 2024–25 income year were, wholly or partly, in relation to those financial arrangements, print X in the No box at question 57 – label D, and then go to question 58.

Debt deductions for amounts payable to associate pair

If any of these debt deductions are referable to an amount paid or payable, either directly or indirectly, to an associate pair covered by paragraph 820-423A(5)(e), print X in the Yes box at question 57 – label E and then go to the question 57 – label F.

If none of these debt deductions are referable to an amount paid or payable, either directly or indirectly, to an associate pair covered by paragraph 820-423A(5)(e), print X in the No box at question 57 – label E and then go to the question 58.

Debt deductions disallowed in connection with current year prescribed payments

At question 57 – labels F, write the total amount of these debt deductions disallowed due to the operation of subsection 820-423A(5) then go to question 57 – label G.

Top 3 most material arrangements

At question 57 – label G, provide the following information in relation to the top 3 most material arrangements for which these debt deductions are disallowed due to subsection 820-423A(5).

  • At question 57 – labels G1a, G2a and G3a, write the value of the current year payments or distributions.
  • At question 57 – labels G1b, G2b and G3b, write the amount of debt deductions disallowed in connection with the corresponding current year payments or distributions.
  • At question 57 – labels G1c, G2c and G3c, write the applicable code, selected from the table below (and also shown at Appendix 30) for the type of corresponding current year payments or distributions.
Table: Type of payments or distribution

Code

Type of payments or distributions

1

A dividend, distribution or non-share distribution

2

A distribution by a trustee or partnership

3

A return of capital, including a return of capital made by a distribution or payment made by a trustee or partnership

4

A payment or distribution in respect of the cancellation or redemption of a membership interest in an entity

5

A royalty, or a similar payment or distribution for the use of, or right to use, an asset

6

A payment or distribution that is wholly or partly referable to the repayment of principal under a debt interest if the debt interest is issued by the payer and the debt interest is a financial arrangement per paragraphs 820-423A(5)(a), (b) and (c).

7

A payment or distribution of a kind similar to a payment or distribution mentioned in the above codes

8

A payment or distribution prescribed by the regulations.
  • At question 57 – labels G1d, G2d and G3d, provide a description of the corresponding payments or distributions including:
    • A description of the payments or distributions
    • Details of the counterparty and/or associate pair(s)
    • The tracing/apportionment method used to calculate the debt deductions.

Q58 Disallowed debt deductions as associate

Question 58 requires you to disclose information regarding debt deductions in the 2024–25 income year income year disallowed by subsection 820-423A(1) because you were either:

  • An associate pair of an acquirer or of an associate disposer in relation an acquisition by another entity, or
  • An associate pair of the payer or associate recipient in relation to a payment or distribution by another entity.

If you have debt deductions in the 2024–25 income year disallowed by subsection 820-423A(1) because you were either:

  • An associate pair of an acquirer or of an associate disposer for an acquisition covered by subsection 820-423A(2), or
  • An associate pair of the payer or of an associate recipient for a payment or distribution covered by subsection 820-423A(5)

print X in the Yes box at question 58 – label A and write the total value of the debt deductions disallowed at question 58 – label B, and then go to question 58 – label C.

If none of your debt deductions in the 2024–25 income year are disallowed by subsection 820-423A(1) because you were either:

  • An associate pair of an acquirer or of an associate disposer for an acquisition covered by subsection 820-423A(2), or
  • An associate pair of the payer or of an associate recipient for a payment or distribution covered by subsection 820-423A(5)

print X in the No box at question 58 – label A and then go to the Section I.

Special reporting rule for entities treated as choosing the third party debt test for the income year

If you're an entity which has made, or is taken to have made, a choice to apply the third party debt test under subsection 820-46(4) or subsection 820-46(5) of the ITAA 1997 for your 2024–25 income year, print X in the No box at question 58 – label A and then go to Section I.

Special transitional reporting rule for 2024–25 year

For the 2024–25 income year only, if you're a 2025 early balancer with an income year starting before 1 July 2024, print X in the No box at question 58 – label A, and then go to Section I.

Top 3 most material arrangements

At question 58 – label C, provide the following information for the top 3 most material arrangements for which these debt deductions are disallowed by subsection 820-423A(1) in relation to the acquisition or payment by another entity.

  • At question 58 – labels C1a, C2a and C3a, write the name of the acquirer/disposer or payer/recipient (as relevant) of which you were an associate pair.
  • At question 58 – labels C1b, C2b and C3b, write the Appendix 2 jurisdiction code for the tax residency jurisdiction of the corresponding acquirer/disposer or the payer/recipient of which you were an associate pair (as relevant).
  • At question 58 – labels C1c, C2c and C3c, write the ABN of the corresponding acquirer/disposer or payer/recipient of which you were an associate pair (as relevant).
  • At question 58 – labels C1d, C2d and C3d, write the value of the corresponding acquisition or payments/distributions.
 
Continue to: Section I: Taxpayer's declaration

 

Return to: Instructions to complete the international dealings schedule

QC104824