Supplementary Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Competition, Charities and Treasury, the Hon Dr Andrew Leigh MP)Chapter 2: Statement of Compatibility with Human Rights
Thin capitalisation – Parliamentary amendments
Overview
2.1 The Parliamentary amendments are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
2.2 The Parliamentary amendments amend Schedule 2 to the Bill to ensure the new thin capitalisation rules are appropriately targeted. Broadly, the thin capitalisation rules limit the tax deductibility of financing expenses for certain multinational entities.
2.3 The amendments relate to the following matters:
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- Choices under Subdivision 820-AA.
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- The meaning of 'obligor group'.
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- The meaning of 'tax EBITDA'.
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- The third party debt test.
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- The debt deduction creation rules.
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- Other matters.
Human rights implications
2.4 The Parliamentary amendments does not engage any of the applicable rights or freedoms.
Conclusion
2.5 This Parliamentary amendment are compatible with human rights as it does not raise any human rights issues.
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