The Australian Taxation Office’s draft Practical Compliance Guideline PCG 2025/D2 explains how the ATO assesses the tax risk of inbound cross-border related-party financing arrangements and the factors it takes into account. It also sets out the compliance framework the ATO follows when determining the appropriate interest rate or other pricing for such arrangements.
Because the document is still in draft form, it has no effect until it is finalised. When issued, it will apply exclusively to inbound cross-border related-party financing arrangements.