Australia Releases Draft Thin Capitalization Rules for Public Comment

On May 8th 2014, the Australian Treasury released draft legislation for public comment relating to changes to Australia's thin capitalization rules. The legislation provides for the following changes:

• A reduction in the safe harbor debt to equity ratio from 3:1 to 1.5:1 for general entities, and from 20:1 to 15:1 for non-bank financial entities
• A reduction in the worldwide gearing ratio test for outbound investment from 120% to 100%
• An increase from 80% to 100% for the worldwide capital rat…