• Service: Tax, Mergers & Acquisitions, Global Mobility Services, International Tax
  • Type: Regulatory update
  • Date: 3/26/2014

Australia - M&A in resources sector; changes for foreign multinationals 

March 26:  The KPMG member firm in Australia prepared reports on the following developments (read the March 2014 reports by clicking on the hyperlinks provided below):
  • Tax tips for acquisitions in the resources sector - Concerning mergers and acquisition activity in the resources sector, practical tax tips to consider include: (1) will the acquisition be undertaken as a share or asset acquisition (which could affect the future tax deductibility of exploration and mining rights acquired)? (2) what, for non-resident investors, would be the capital gains tax on the future sale of companies holding Australian mining rights and other property?

    Read a March 2014 report.

  • Closing loopholes or creating trouble for foreign multinationals - Multiple entry consolidated (MEC) groups allow multinationals that have multiple entry points into Australia access to the same tax concessions that are available to Australian consolidated groups. The government announced that it will amend the law, effective 1 July 2014, so that the tax treatment of MEC groups is the same as consolidated groups.

    Read a March 2014 report.

  • Off-market share buybacks - With improved corporate earnings and balance sheet positions, there has been increased media focus on capital management strategies of listed companies, including mounting speculation of possible share buybacks being undertaken in the coming months. Proposed changes would include the denial of “notional losses” by deeming an increased amount of consideration to have been received by the investor for the disposal of shares under a listed company off-market buyback. In some instances, a capital (or revenue) loss that otherwise would have been made for tax purposes would be reduced to nil.

    Read a March 2014 report.

  • Options for amending tax assessment - Section 170 of the Income Tax Assessment Act 1936 stipulates the time limits for amending an assessment. Different time limits apply for different taxes, but in general, the time limit for a company is within four years from the Notice of Assessment. Taxpayers may decide whether to follow the more informal request for an Amended Assessment under Section 170 or follow the more formal objection requirements under Section 175A (generally preferred when the taxpayer seeks to preserve the rights of appeal).

    Read a March 2014 report.

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