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Australia: International dealings schedule disclosures for hybrid mismatches (2019)

Australia: International dealings schedule disclosures

Changes to the 2019 international dealings schedule relating to the hybrid mismatch rules (and instructions) have been released.

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For the first time, the international dealings schedule includes a number of questions in section G—questions that are intended to capture information relating to the new hybrid mismatch rules as well as a number of new questions in section C seeking further information relating to interests in foreign entities. There are a number of other changes.

As expected, the questions require specific disclosures regarding the application of the hybrid mismatch rules, as well as quantification of amounts of deductions denied or inclusions in income as a result of the rules. The new international dealings schedule also requires detailed disclosures by taxpayers that have restructured or replaced arrangements that would fall within the hybrid mismatch rules. This is aligned with question 22 of the Reportable Tax Position Schedule, Category C.

The hybrid mismatch rules are broadly applicable for years of assessment commencing on or after 1 January 2019. As such, the rules are effective and can affect the deductibility or assessability of amounts incurred or received by Australian taxpayers in respect of arrangements currently in place.

KPMG observation

Given the timing of the introduction of the rules, taxpayers need to consider to what extent the new international dealings schedule disclosures could affect their income tax returns for income years ending between December 2018 and November 2019 (years during which the hybrid mismatch rules are not yet applicable).


Read a June 2019 report prepared by the KPMG member firm in Australia

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