This paper covers:
- Fundamentals of Interest Deductibility
- what is interest? (BHP Co and the debt/equity provisions)
- is it too soon? (Steele's case)
- is it too late? (Brown's case)
- purpose/use (Macquarie Finance and St George cases)
- refinancing (Smith & Roberts case)
- derivation of income (Total Holdings and Spassked)
- interest withholding tax
- thin capitalisation.
- Debt/equity
- how do the Debt/Equity rules impact interest deductibility?
- key issues
- effective non-contingent obligations
- timing
- related schemes
- limited recourse debt
- convertible notes/hybrids
- impact of recent cases including St George.
- Debt pricing
- transfer pricing and interest
- guarantee fees and intra-group loans
- an examination of the ATO's recent discussion paper.