• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 3/5/2014

Australia - R&D “at risk” requirement, debt-equity rules  

March 5:  The KPMG member firm in Australia prepared reports on the following developments (read the February and March 2014 reports by clicking on the hyperlinks provided below):
  • Super funds: tax treatment of payments to regulators and administrators - Many of the large superannuation funds that are rated “key taxpayers” or “Q2” under the Australian Taxation Office (ATO) risk differentiation framework have been participating in their 2013 compliance review meetings with the ATO’s Public Groups and International superannuation cell.

    Read a March 2014 report.

  • No risk, no reward – R&D tax offset eligibility - Under the research and development (R&D) tax incentive, a number of integrity rules exist, including that relating to expenditure not at risk. This issue can be easily overlooked by companies seeking to claim an R&D tax offset. If an R&D entity (or its associates) received, or could be reasonably expected to receive, consideration for the expenditure being incurred, regardless of the outcome of the R&D activities, the expenditure relating to those R&D activities is not at risk. Expenditures that are not considered at risk are not eligible under the R&D tax incentive provisions.

    Read a March 2014 report.

  • What is a financing arrangement? - In a recent case, the court considered the application of Australia’s debt-equity rules to a deferred compensation plan, whereby the employee was issued both profit sharing certificates in his employer company and shares in the employer’s holding company. The court held that no financing arrangement existed because this plan did not have the purpose of raising finance—notwithstanding that capital was raised and shares were issued.

    Read a February 2014 report.

  • Infrastructure – can we afford it? - An article discusses the global infrastructure-funding deficit, and highlights the G20 focus on infrastructure and the economic stimulus that the resulting “construction boom” will bring.

    Read a March 2014 report.

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