Consultation period: 10 July to 5 August 2025
We invite feedback on draft legislation clarifying foreign bail‑in bonds' tax treatment.
The draft legislation allows these types of bonds to be treated as debt for tax purposes. The bonds must still meet the other requirements of the debt instrument test.
This makes interest payments related to the bonds tax‑deductible. This aligns with the treatment for bail‑in bonds issued by Australian banks.
Bail‑in bonds are financial instruments. A prudential regulator places conditions on them. These conditions allow the regulator to convert the instrument into equity during financial distress.
Documents
- Exposure draft [PDF 657 kB Exposure draft | DOCX 144 kB Exposure draft]
- Explanatory statement [PDF 574 kB Explanatory statement | DOCX 31 kB Explanatory statement]
