• Service: Tax, Mergers & Acquisitions, International Tax
  • Type: Regulatory update
  • Date: 8/5/2014

Australia - No tax deduction for consolidated group’s inherited liabilities 

August 5: The KPMG member firm in Australia has prepared the following reports.
  • When is a deductible liability not deductible? As proposed, retroactively effective from 14 May 2013, the tax consolidation law would be amended so that tax consolidated groups acquiring subsidiary members would be required to include, in their taxable income, amounts equivalent to deductible liabilities recorded by the subsidiary members at the joining time. The time at which the amounts are included in taxable income would depend on the nature of the liability. The net effect of the proposed changes would be that the acquiring consolidated group would get no net tax deduction for the inherited liabilities.

    Read a July 2014 report.

  • Fixed asset register “health check” – Effective management of capital projects in Australia—and the related trucks, tractors, crushers, conveyors, and all manner of other assets to be identified, classified, costed, and tracked for tax purposes—can help address and prevent significant tax issues. Also, periodic fixed asset register “health checks” can help uncover missed deductions that can be recouped by amending income tax returns.

    Read an August 2014 report.

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