• Service: Tax, Global Indirect Tax, Mergers & Acquisitions, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/27/2014

Australia - Guidance on R&D recordkeeping, cloud computing, offshore banking 

August 27: The KPMG member firm in Australia has prepared the following reports.
  • Project pool provisions - With the recent re-emergence of mergers and acquisitions activity in the resources sector, an issue that may require careful consideration is when a taxpayer acquires, or is considering the acquisition of, a project that includes historical mining capital expenditure (MCE) or transport capital expenditure (TCE) under the project pool provisions.

    Read an August 2014 report

  • What are “services” and “work”? - In a recent decision, Obeid v ACCC [2014] FCA 839, the Federal Court gave extensive consideration to the definition of “services” in the Competition and Consumer Act 2010 and to the ordinary meaning of the word. The court held the definition extended the ordinary meaning of services, particularly through the contracts (agreements) extension and the rights extension.

    Read an August 2014 report

  • Bitcoin guidance - The Australian Taxation Office (ATO) released guidance on the tax treatment and goods and services tax (GST) implications of Bitcoin.

    Read an August 2014 report and a second August 2014 report

  • Payroll tax audit activity - With the substantial increase in information sharing between jurisdictions, and between the Australian Taxation Office (ATO) and state revenue authorities, there is a rise in payroll tax audit activity.

    Read an August 2014 report

  • Cloud computing tax issues - Generally, no one-size-fits-all tax conclusions can be made with regard to cloud computing transactions. The cloud can cause a disaggregation of the end-to-end business process, and as such, each element of the transactions must be analysed and understood from both a commercial and tax perspective. Users will need to consider both Australian and foreign tax issues that can arise whenall or part of the business is relocated to the cloud involving offshore elements. Such issues include royalty withholding tax, permanent establishment, goods and services tax (GST) and transfer pricing.

    Read an August 2014 report

  • Offshore banking unit reforms - The 10% concessional tax rate for eligible offshore banking unit (OBU) activities is one of the very few favourable permanent differences still available for accounting purposes; and the interest withholding tax exemption for eligible OBU borrowings is also one of very few withholding tax exemptions. For certain inbound financial institutions, OBU borrowing and lending can also be excluded from the thin capitalisation calculation.

    Read an August 2014 report

  • Tax treatment of trading stock - Taxpayers can elect to value trading stock on hand at year-end at the lower of cost, market selling value, or replacement value. Taxpayers typically value their trading stock at cost. However, when the value of trading stock is less than cost (e.g., as a result of a decrease in commodity prices), taxpayers may find it beneficial to consider the alternative valuation options in order to realise tax deductions now, rather than when the stock is sold in a later period.

    Read an August 2014 report

  • R&D records - A decision from the Administrative Appeals Tribunal includes information with respect to records for the research and development (R&D) tax incentive.

    Read an August 2014 report

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