Key: ++ much better than the status quo + better than the status quo 0 about the same as the status quo - worse than the status quo - - much worse than the status quo Allowable debt levels Option 1 Option 2 Status (non-debt (adjustment quo liability with no adjustment) deferred tax) 0 Efficiency and + + neutrality Option 1 will Option 2 will reduce the reduce the allowable allowable debt levels debt levels for taxpayers for taxpayers with little with little equity (and equity (and high levels high levels of non-debt of non-debt liabilities). liabilities). This will help This will help ensure ensure taxpayers taxpayers have a more have a more commercial commercial level of debt. level of debt. It will also It will also equalise the equalise the thin thin capitalisation capitalisation outcomes for outcomes for taxpayers in taxpayers in otherwise otherwise similar similar situations. situations.
Key: ++ much better than the status quo + better than the status quo 0 about the same as the status quo - worse than the status quo - - much worse than the status quo Allowable debt levels Option 1 (non-debt liability adjustment) Option 2 (adjustment with no deferred tax) Status quo Efficiency and neutrality + Option 1 will reduce the allowable debt levels for taxpayers with little equity (and high levels of non-debt liabilities). This will help ensure taxpayers have a more commercial level of debt. It will also equalise the thin capitalisation outcomes for taxpayers in otherwise similar situations. + Option 2 will reduce the allowable debt levels for taxpayers with little equity (and high levels of non-debt liabilities). This will help ensure taxpayers have a more commercial level of debt. It will also equalise the thin capitalisation outcomes for taxpayers in otherwise similar situations. 0
2017-other-beps-16-ria-interest-july-2017.docx