Supplementary Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)
General outline and financial impact
This amendment is a consequential amendment resulting from amendments moved in the House of Representatives.
The amendments moved in the House of Representatives ensure that foreign partners, beneficiaries and trustees of Australian partnerships and trusts will be subject to the thin capitalisation gearing ratio.
A consequential amendment is required to the definition of 'foreign debt' for 'foreign investors'. The amendment will ensure that the thin capitalisation provisions operate as intended.
Date of effect: The amendment will apply from the 1997-98 income year.
Amendment announced: Not previously announced.
Financial impact: The amendment will prevent revenue leakages although the revenue implications are not able to be reliably measured.
Compliance cost impact: There are no compliance cost implications.