Thin capitalisation schedule 2011

Transcription

1 Instructions for companies, superannuation funds, partnerships and trusts Thin capitalisation schedule 2011 Schedule and instructions for 1 July June 2011 or more information go to NAT

2 instructions for completing the Thin capitalisation schedule If you are an entity and you are not specifically excluded from the thin capitalisation provisions in Division 820 of the Income Tax Assessment Act 1997 (ITAA 1997), you must complete this schedule when preparing your tax return. The Thin capitalisation schedule 2011 is available through the electronic lodgment service (ELS) for both companies and funds. Alternatively, companies, funds or other entities can complete and lodge the paper schedule. You may be excluded from the requirement to apply the thin capitalisation provisions and do not need to complete this schedule if: n you and your relevant associates have total debt deductions of $250,000 or less (see section of the ITAA 1997), or n you satisfy section of the ITAA urther information about the thin capitalisation rules can be found in the thin capitalisation guides available on our website at NOTE If you are a financial service provider you may need to complete the International dealings schedule financial services 2011 instead of the Thin capitalisation schedule To determine whether you are required to complete the International dealings schedule financial services 2011, see International dealings schedule financial services instructions 2011 available on our website at Item 1 At C write the code for your type of thin capitalisation entity at the end of the income year or relevant period. If your type of thin capitalisation entity changed during the year, you need to complete only one Thin capitalisation schedule 2011 for the type of thin capitalisation entity you were at the end of the income year or relevant period. The acronym ADI stands for authorised deposit-taking institution. NON-ADI Code Type 1 Outward investor (general) under subsections (2) and (2) 2 Outward investor (financial) under subsections (2) and (3) 3 Inward investment vehicle (general) under subsections (2) and (5) 4 Inward investment vehicle (financial) under subsections (2), (6) and (6) 5 Inward investor (general) under subsection (2)) 6 Inward investor (financial) under subsection (2) ADI Code Type 7 Outward investing entity (ADI) under subsections (2), (7), and Inward investing entity (ADI) under subsections (2) and (4) Item 3a At E write the applicable code for the type of averaging method that you used for calculating average values. or general information about averaging methods, refer to the thin capitalisation guides and the ITAA Code Averaging method used 1 Opening-closing balances method under section Three measurement days method under section requent measurement (quarterly) method under subsection (2) 4 requent measurement (regular intervals) method under subsection (4) ITEM 3b If you have used Australian generally accepted accounting principles (AGAAP) as they existed on 31 December 2004 to work out your thin capitalisation position in any of the previous four years, you must complete A item 3b. There are transitional provisions that allowed you to do calculations for thin capitalisation purposes using AGAAP as they existed at 31 December The last year these transitional provisions applied was the 2009 income year. or income years commencing on or after 1 January 2009 you need to do your calculations for thin capitalisation purposes using the Australian equivalents to the International inancial Reporting Standards (AIRS) subject to the modifications in subsections (2) to (3), section , section and section of the ITAA Item 4 If you are subject to thin capitalisation, you must complete item 4. You must complete all entries in item 4 (except H and K if you have written code 7 or 8 (ADI) at C item 1). At item 4, write the total amount of your debt deductions that are allowable before applying the thin capitalisation provisions in Division 820 of the ITAA At L item 4, write the amount of your debt deductions that were deductible under section ITAA 1997 (costs in relation to a debt interest incurred in deriving non-assessable non-exempt income under section 23AI, 23AJ or 23AK of the Income Tax Assessment Act 1936). If none of the debt deductions shown at item 4 were deductible under section 25-90, write 0 (zero) at L.

3 At M item 4, write the amount of your debt deductions for any debt interest held or ultimately funded (via a back to back arrangement) by a non-resident person who: n is a controller or majority owner of you, or n is controlled or majority-owned by the same persons as you (this includes majority ownership through other companies, partnerships or trusts). If none of the debt deductions shown at item 4 were for debt interests held or ultimately funded by such non resident entities, write 0 (zero) at M. At G item 4, write the amount of your debt deductions that are disallowed under the following sections if you have n code 1 or 2 at C item 1, the amount disallowed under sections and n code 3, 4, 5 or 6 at C item 1, the amount disallowed under sections and n code 7 at C item 1, the amount disallowed under sections and n code 8 at C item 1, the amount disallowed under sections and At H item 4, write the amount of your adjusted average debt determined under the following sections if you have n code 1 or 2 at C item 1, under subsection (3) n code 3, 4, 5 or 6 at C item 1, under subsection (3). At I item 4, write the total amount by which your assets have been revalued for thin capitalisation purposes (this is to be included in the amount you write at K item 4). At J item 4, write the following amount if you have n code 1, 2, 3, 4, 5 or 6 at C item 1, the amount by which your adjusted average debt a H item 4 exceeds your maximum allowable debt at B item 4 n code 7 at C item 1, the amount by which your minimum capital amount at B item 4 exceeds the amount of your adjusted average equity capital at L item 5a n code 8 at C item 1, the amount by which your minimum capital amount at B item 4 exceeds the amount of your average equity capital at L item 5a. At K item 4, write the amount of the average value of your assets required to be included in step 1 under the following sections if you have n code 1 at C item 1, under section n code 2 at C item 1, under section n code 3 at C item 1, under section n code 4 at C item 1, under section n code 5 at C item 1, under section n code 6 at C item 1, under section At B item 4, write the following amount if you have n code 1 or 2 at C item 1, your maximum allowable debt determined under section n code 3, 4, 5 or 6 at C item 1, your maximum allowable debt determined under section n code 7 at C item 1, your minimum capital amount determined under section n code 8 at C item 1, your minimum capital amount determined under section Item 5 If you have written code 1, 2, 3, 4, 5 or 6 (non-adi) at C item 1 for your type of thin capitalisation entity, you do not need to complete item 5. At L item 5a, write the following amount if you have n code 7 at C item 1, the amount of your adjusted average equity capital determined under subsection (3) n code 8 at C item 1, the amount of your average equity capital determined under subsection (3). If you have written code 7 (outward investing entity (ADI)) at C item 1, you must complete M, N, O and P item 5. At M item 5a, if you have written code 7 at C item 1, write the average value of all your risk-weighted assets that you are required to include in step 1 in section (after excluding the value of risk-weighted assets attributable to the assets specified in paragraphs (a), (b) and (c) of step 1 in section ). At N item 5b, if you have written code 7 at C item 1, write the amount of your ADI equity capital attributable to your overseas permanent establishments that you were required, under paragraph (3)(a), to subtract in determining the amount of your adjusted average equity capital you had to write at L item 5a. At O item 5b, if you have written code 7 at C item 1, write the amount of the average value of all your controlled foreign entity equity, within the meaning of section , that you were required, under paragraph (3)(b), to subtract in determining the amount of your adjusted average equity capital you had to write at L item 5a. At P item 5b, if you have written code 7 at C item 1, write the amount of the tier 1 prudential capital deductions that you are required to include in step 3 in section If you have written code 8 (inward investing entity (ADI)) at C item 1, you must complete Q and R item 5. At Q item 5c, if you have written code 8 at C item 1, write the average value of all your risk-weighted assets attributable to your Australian permanent establishments (but after excluding those assets that are attributable to offshore banking activities) that you are required to include in step 1 of section At R item 5c, if you have written code 8 at C item 1, write the average value of the total amounts you have made available to your Australian permanent establishments, that will never give rise to any debt deductions, that you are entitled to include, under paragraph (3)(b), in determining the amount of your average equity capital you had to write at L item 5a.

4 Item 6 If you have used code 7 or 8 (ADI) at C item 1 for your type of thin capitalisation entity, you do not need to complete item 6. At A item 6a, write the amount of the average value of your non-debt liabilities, as defined in subsection 995-1(1), which you are required to subtract in determining your safe harbour debt amount as follows if you have n code 1 at C item 1, subtracted in step 6 of section n code 2 at C item 1, subtracted in step 6 of subsection n code 3 at C item 1, subtracted in step 4 of section n code 4 at C item 1, subtracted in step 4 of subsection n code 5 at C item 1, subtracted in step 4 of section n code 6 at C item 1, subtracted in step 4 of subsection At B item 6a, write the amount of the average value of your associate entity debt, within the meaning of section , which you are required to subtract in determining your safe harbour debt amount as follows if you have n code 1 at C item 1, subtracted in step 2 of section n code 2 at C item 1, subtracted in step 2 of subsection n code 3 at C item 1, subtracted in step 2 of section n code 4 at C item 1, subtracted in step 2 of subsection n code 5 at C item 1, subtracted in step 2 of section n code 6 at C item 1, subtracted in step 2 of subsection At C item 6a, write the amount of the average value of your associate entity equity, within the meaning of section , which you are required to subtract in determining your safe harbour debt amount as follows if you have n code 1 at C item 1, subtracted in step 3 of section n code 2 at C item 1, subtracted in step 3 of subsection n code 3 at C item 1, subtracted in step 3 of section n code 4 at C item 1, subtracted in step 3 of subsection n code 5 at C item 1, subtracted in step 3 of section n code 6 at C item 1, subtracted in step 3 of subsection At D item 6a, write the amount of the average value of your associate entity excess amount, within the meaning of section , which you are required to add in determining your safe harbour debt amount as follows if you have n code 1 at C item 1, added in step 8 of section n code 2 at C item 1, added in step 10 of subsection n code 3 at C item 1, added in step 6 of section n code 4 at C item 1, added in step 8 of subsection n code 5 at C item 1, added in step 6 of section n code 6 at C item 1, added in step 8 of subsection If you have written code 2, 4 or 6 (financial) at C item 1, you must complete E and item 6b. At E item 6b, write the average value of your zero capital amount, within the meaning of section , which you are required to subtract in determining your safe harbour debt amount as follows if you have n code 2 at C item 1, subtracted in step 7 of subsection n code 4 at C item 1, subtracted in step 5 of subsection n code 6 at C item 1, subtracted in step 5 of subsection At item 6b, write the average value of your on-lent amount, as defined in subsection 995-1(1), which you are required to subtract in determining your safe harbour debt amount as follows if you have n code 2 at C item 1, subtracted in step 6 of subsection (3) n code 4 at C item 1, subtracted in step 4 of subsection (3) n code 6 at C item 1, subtracted in step 4 of subsection (3). If you have written code 1 or 2 (outward investor) at C item 1, you must complete G and H item 6c. At G item 6c, write the average value of all your controlled foreign entity equity, within the meaning of section , which you are required to subtract in determining your safe harbour debt amount as follows if you have n code 1 at C item 1, subtracted in step 5 of section n code 2 at C item 1, subtracted in step 5 of subsection. At H item 6c, write the average value of all your controlled foreign entity debt, within the meaning of section , which you are required to subtract in determining your safe harbour debt amount as follows if you have n code 1 at C item 1, subtracted in step 4 of section n code 2 at C item 1, subtracted in step 4 of subsection.

5 Item 7 If you rely on the arm s length amount as calculated in sections , , or , you must complete item 7. At I item 7, write the following amounts if you have n code 1 or 2 at C item 1, the arm s length debt amount determined in accordance with section n code 3, 4, 5 or 6 at C item 1, the arm s length debt amount determined in accordance with section n code 7 at C item 1, the arm s length capital amount determined in accordance with section n code 8 at C item 1, the arm s length capital amount determined in accordance with section Item 8 You must complete item 8 if you have n codes 1 or 2 at C item 1 and you rely on the worldwide gearing debt amount as calculated in section , or n code 7 at C item 1 and you rely on the worldwide capital amount as calculated in section If you have used codes 3, 4, 5, 6 or 8 at C item 1 you do not need to complete item 8. At J item 8, if you have written code 7 at C item 1 write the worldwide group capital ratio determined in accordance with subsection (3). or example, if the amount determined under step 1 of the method statement in subsection (3) is 5.42% of the amount determined under step 2, the fractional whole number you must write at J item 8 is At L item 8, if you have written code 7 at C item 1 write your worldwide capital amount determined under subsection (2). At K item 8, if you have written code 1 or 2 at C item 1 write the amount of your worldwide debt, as defined in subsection 995-1(1), used to calculate the result of step 1 in the following subsections if you have n code 1 at C item 1, step 1 in subsection (1) n code 2 at C item 1, step 1 in subsection (2). At M item 8, if you have written code 1 or 2 at C item 1 write the amount of your worldwide equity, as defined in subsection 995-1(1), used to calculate the result of step 1 in the following subsections if you have n code 1 at C item 1, step 1 in subsection (1) n code 2 at C item 1, step 1 in subsection (2). At N item 8, if you have written code 1 or 2 at C item 1 write your worldwide gearing debt amount determined under the following subsections if you have n code 1 at C item 1, under subsection (1) n code 2 at C item 1, under subsection (2). Taxpayer s declaration If you do not lodge the schedule with the tax return, you must sign and date the schedule.

6 Thin capitalisation schedule Print neatly in BLOCK LETTERS with a black or blue ballpoint pen only. Print one letter or number in each box. Do not use correction fluid or tape Tax file number (TN) Australian business number (ABN) This schedule forms part of the tax return of (name of entity): or information on completing this schedule go to and see Thin capitalisation schedule and instructions The Guide to thin capitalisation is also available on 1 Show your entity type at the end of the income year. C CODE 2 Have you changed status from general to financial during the income year? 3 Calculation methods 3a Show the method used for calculating average values. 3b Have you chosen to use the thin capitalisation transitional provision for your thin capitalisation calculations? D E A Yes CODE No Print X in the box 4 General information You must complete all labels (except for K if you are an ADI). Debt deductions Debt deductions in earning exempt foreign income (s25-90) L Debt deductions on debt from related non-residents M Amount of debt deduction disallowed Adjusted average debt Asset revaluation amount for thin capitalisation purposes Excess debt (non-adi)/ capital shortfall (ADI) Average value of assets (non-adi only) Maximum allowable debt (non-adi)/ minimum capital amount (ADI) G H I J K B Print X in the appropriate box 5 ADI Complete as applicable 5a 5b Outward investing entity 5c Inward investing entity (Adjusted) average equity capital Average value of risk weighted assets Equity capital attributable to overseas permanent establishment(s) Average value of controlled foreign entity equity Tier 1 prudential capital deductions Average of risk weighted assets attributable to Australian permanent establishment(s) Average value of dotation capital L M N O P Q R NAT IN CONIDENCE when completed PAGE 1

7 6 Non-ADI Complete as applicable 6a 6b inancial entity 6c Outward investing entity Average value of non-debt liabilities Average value of associate entity debt Average value of associate entity equity Average value of associate entity excess amount Average zero capital amount Average on-lent amount Average value of controlled foreign entity equity Average value of controlled foreign entity debt A B C D E G H 7 Arm s length tests If relying on this test show: Arm s length debt (non-adi) or capital (ADI) amount I 8 Worldwide gearing debt/capital test If relying on this test show: Worldwide group capital ratio Worldwide capital amount Worldwide debt Worldwide equity Worldwide gearing debt amount ADI J L Non-ADI K M N If the schedule is not lodged with the income tax return you are required to sign and date the schedule. Important Before making this declaration check to ensure that all the information required has been provided on this form and any attachments to this form, and that the information provided is true and correct in every detail. If you are in doubt about any aspect of the tax return, place all the facts before the ATO. The income tax law imposes heavy penalties for false or misleading statements. TAXPAYER S DECLARATION I declare that the information on this form is true and correct. Signature Contact person Date Day Month Year Daytime contact number (include area code) PAGE 2 IN CONIDENCE when completed