However, in order to be eligible for the loss concessions, the taxpayer must be a standalone special purpose vehicle (SPV). That is, it cannot be a company or trust that is a member of a tax consolidated group.
Whilst the requirement for an SPV may reflect industry practice and may be suitable for joint venture investors, it may place impediments on large Australian groups from accessing the concessions if they enter into infrastructure projects as a sole investor.
The ED notes that if the entity was to carry on other activities, it would be necessary to quarantine the DIP business from other businesses within the entity or group and that this “would create a great deal of complexity…particularly if one project stopped being a DIP”. This ‘complexity’ and ‘risk’ however may not be very different from the issues faced by flow through trusts carrying on multiple ‘eligible investment businesses’.
Submissions on the ED are due by 30 April 2013.