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Thin capitalisation and transfer pricing

01 December 2010


Ian Farmer

On October 27, the Australian Commissioner of Taxation's issued the long-awaited Taxation Ruling (TR 2010/7) on how the thin capitalisation provisions interact with the transfer pricing provisions. TR 2010/7 formalises and expands on the views that the Australian Taxation Office (ATO) had put forward in its previous draft ruling, TR 2009/D6.

Key issues The transfer pricing provisions apply independently of Australia's thin capitalisation provisions in determining the allowable deduction for a taxpayer's related party debt. The transfer pricing provisions are to...



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