Australia’s New Form Lets Firms Ask to Revoke Debt Test Choice

Sept. 16, 2025, 3:22 PM UTC

Australia issued Tuesday a new form for companies looking to revoke their chosen method for determining the amount of claimable debt deductions on their income taxes.

Australia issued final guidance last month on the so-called thin capitalization rules that limit the debt deductions companies can claim. The rules detail what could result in deductions being disallowed, including deductions arising on some related-party arrangements—called debt deduction creation rules.

  • For companies that have previously chosen to apply the group ratio test or third party debt test, the thin capitalization rules apply based on the choice the company made.
  • Companies that ...

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