• Service: Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 1/29/2014

Australia - Cross-border employees, share capital reductions, mining exploration, depreciation 

January 29: The KPMG member firm in Australia prepared reports on the following developments (read the 2014 reports by clicking on the hyperlinks provided below):
  • Superannuation – when tax in unit pricing may go wrong - When superannuation funds offer more than one investment option to their members, systems are required to allocate both current and deferred tax within unit pricing or crediting rate procedures. Funds have made great strides in the quality of these systems over the last three to five years, with many lessons learnt during the global financial crisis and the market volatility that followed.

    Read a January 2014 report

  • Tax policy in Australia - The Committee of Economic Development of Australia (CEDA) launched a publication in November 2013 comprising a series of essays from leading policy thinkers on how Australian can best deliver on the next stage of economic growth. In an excellent essay, Professor Greg Smith, former head of Treasury Revenue Group division and panel member of the Henry Tax Review, describes the twin goals needed to increase efficiency and competitiveness of the Australian tax system—goals that firstly, contribute to revenue adequacy and secondly, do not unduly harm economic growth.

    Read a January 2014 report

  • Getting cross-border reporting for employees right - Over the last 12 months, there has been a significant increase in the use of information sharing and data matching activity by the Australian Taxation Office (ATO) targeting individual taxpayers with cross-border activities. To identify undeclared foreign income, the ATO has previously used financial intelligence collected by the Australian Transaction Reports and Analysis Centre (AUSTRAC) as well as information shared by foreign banks and financial institutions. However, foreign employment income reviews are now becoming common-place, with the ATO seeking to check the extent to which employment income is reported in a foreign jurisdiction and declared in the individual’s Australian tax return.

    Read a January 2014 report

  • What could s258F share capital reductions mean for dividends? - With the recognition of impairment charges increasing in the current economic environment, a company that has implemented or is contemplating a share capital reduction under section 258F of the Corporations Act 2001 to recognise a consequential permanent loss of share capital needs to consider the potential consequences for its ability to pay franked dividends or dividends attaching Conduit Foreign Income (CFI).

    Read a January 2014 report

  • Non-cash consideration in mining exploration transactions - The Australian Taxation Office (ATO) 2012 release of tax rulings on mining exploration “farm-in” arrangements has placed more emphasis on the tax treatment of non-cash consideration provided as part of an exploration transaction (e.g., the non-cash value of an agreement to incur exploration costs on behalf of another joint venture party).

    Read a January 2014 report

  • Division 40: prime cost methodology – depreciating second element costs - Depreciation of plant and equipment is normally a dry affair with depreciation rates typically determined at the time the asset is purchased or, in some organisations, set by a detailed fixed asset capitalisation policy that may be years old. What do you do if you have an upgrade to an existing asset you hold and the cost of the upgrade is properly characterised as a second element cost and not a separate depreciable asset in its own right?

    Read a January 2014 report

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