This should This should improve improve efficiency. efficiency. However, However, submitters this option have argued carves out that in some all types of instances deferred tax deferred tax yet, in – (a type of many non-debt instances, liability) does deferred tax not will represent represent a real future tax liabilities; to payment a the extent taxpayer will this is be required correct, to make. To reducing the extent allowable this is the debt levels case, this in relation to option would these allow some liabilities taxpayers to could have too hamper high a debt efficiency. level. 0 Fairness and + + equity Taxpayers Taxpayers with the with the same level same level of of accounting accounting profit will profit will have the have the same thin same thin capitalisation capitalisation outcomes. outcomes. This option This option therefore therefore
This should improve efficiency. However, submitters have argued that in some instances deferred tax (a type of non-debt liability) does not represent real liabilities; to the extent this is correct, reducing allowable debt levels in relation to these liabilities could hamper efficiency. This should improve efficiency. However, this option carves out all types of deferred tax – yet, in many instances, deferred tax will represent a future tax payment a taxpayer will be required to make. To the extent this is the case, this option would allow some taxpayers to have too high a debt level. Fairness and equity + Taxpayers with the same level of accounting profit will have the same thin capitalisation outcomes. This option therefore + Taxpayers with the same level of accounting profit will have the same thin capitalisation outcomes. This option therefore 0
2017-other-beps-16-ria-interest-july-2017.docx