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

Responding

You can submit responses to this consultation up until 5 August 2025. Interested parties are invited to comment on this consultation.

While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment.

Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

View our submission guidelines for further information.

Response methods

Online (preferred method)

Make a submission

Email

BailinBonds@treasury.gov.au

Post

International Tax Unit
International Tax Branch
Corporate and International Tax Division
Treasury
Langton Cres
Parkes ACT 2600

Enquiries

BailinBonds@treasury.gov.au