The Australian Taxation Office Nov. 4 issued guidance clarifying the country’s hybrid mismatch rules, largely aligned with the OECD’s base erosion and profit shifting (BEPS) Action 2. Topics covered include: 1) the scope of payments subject to hybrid mismatch outcomes, including deduction or non-inclusion mismatches (D/NI), deduction or deduction mismatches (D/D), and imported hybrid mismatches; 2) the application to related parties, control group members, and parties under structured arrangements; 3) the lack of a de minimis or materiality threshold, and the neutralization of hybrid mismatches by cancelling deductions or including income; 4) franked distributions on additional tier 1 (AT1) capital ...