Australia

Details

  • Service: Tax
  • Industry: Energy & Natural Resources
  • Type: Regulatory update
  • Date: 26/03/2014

Tax Insights

KPMG's analysis of tax issues and developments.

Rod Henderson

Rod Henderson
Partner, Tax

+61 2 9335 8787

rbhenderson@kpmg.com.au

Tax tips for acquisitions in the resources sector 

by Rod Henderson, Tax Partner - Energy & Natural Resources

With a pick-up of mergers and acquisition activity in the resources sector, it’s a good time to consider a number of practical tax tips to build into acquisition planning.
  • will the acquisition be undertaken as a share or asset acquisition? For example, this may impact the future tax deductibility of exploration and mining rights acquired
  • non-resident investors will need to consider capital gains tax on the future sale of companies holding Australian mining rights and other property
  • a company acquisition will involve confirmation of a 'clear exit' from the vendor’s tax consolidated group to ensure the vendor’s tax liabilities are not inherited
  • it is important to identify the deductible component of the purchase price for a purchaser to determine assumptions for the purchase price valuation modelling
  • a 100 percent corporate acquisition can give the ability to form a tax consolidated group and push down the purchase price to deductible / depreciable items
  • stamp duty is a significant cost to the purchaser in Australian mining transactions and can apply to the acquisition of publicly listed resources companies
  • work with the vendor to determine whether the transaction will be an exempt goods and services tax (GST) supply of going concern as this will have cash flow impacts.
 

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