The Australian Taxation Office (ATO) issued further draft guidance (in the form of a Law Companion Ruling (LCR) and a Practical Compliance Guideline (PCG)) on the application of the hybrid mismatch rules, this time specifically dealing with the scope of the rules in relation to certain payments that are made between related or unrelated parties under a “structured arrangement”.
A critical aspect of this guidance is that it clarifies the ATO’s views on when an imported mismatch may be considered to be “structured”. This impacts the start date for the application of the imported mismatch rules in respect of a particular arrangement. The imported hybrid mismatch rules generally have a deferred start date of no earlier than 1 January 2020, but only if the imported mismatch is a “nonstructured” arrangement (otherwise the earlier start date of 1 January 2019 applies).
With the hybrid mismatch rules applying from 1 January 2019 for December balancing taxpayers, time is definitely fast running out to not only identify potential hybrid mismatch structures, but also to assess and appropriately respond to existing arrangements in place.
For queries, please speak to your usual PwC adviser.
