[World Tax News] Australia considering new rules on subsidiary disclosure & thin capitalisation and More
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- 2 Min Read
- By Taxmann
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- Last Updated on 2 July, 2023
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Editorial Team – [2023] 151 taxmann.com 551 (Article)
World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.
1. Australia is considering new rules on subsidiary disclosure and thin capitalisation
A bill introduced in the Australian House of Representatives includes new rules on subsidiary disclosure and interest deduction limitation (thin capitalisation) with effect from July 1 2023.
The new rules are explained in the explanatory memorandum as follows:
(a) Disclosure of subsidiaries
Starting from July 1 2023, Australian public companies (listed and unlisted) must disclose information about subsidiaries in their annual financial reports.
Australian public companies must include a ‘consolidated entity disclosure statement’ in their annual financial reports as required by Chapter 2M.
(b) Thin capitalisation
Schedule 2 to the Bill limits the amount of debt deductions multinational entities can claim in an income year. The new thin capitalisation rules seek to align with the OECD’s earnings-based best practice model, which allows an entity to deduct net interest expense up to a benchmark earnings ratio.
2. Denmark enacts Law terminating tax treaty with Russia
Denmark published Law No. 712, to terminate the 1996 tax treaty with Russia. Additionally, Russia has been included in Denmark’s list of jurisdictions subject to defensive measures for non-cooperative jurisdictions.
Denmark is considering ending its tax treaty with Russia due to Russia’s inclusion in the EU’s non-cooperative jurisdictions list. Defensive measures tied to the EU list might be compromised if the tax treaty remains. Another consideration for terminating the treaty is Russia’s military invasion of Ukraine, which has reduced Danish business interests in Russia.
If the necessary notifications are made by 30th June 2023, the termination of the treaty will be effective from 1st January 2024.
Source: Law No. 712
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