• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/16/2013

Australia - Substance-over-form consideration for transactions 

August 16: Taxpayers in Australia generally need to avoid assumptions that tax will follow the legal form of a transaction. Unless a transaction (or return item) is completely straightforward, it may be useful to consider how the transaction might otherwise be treated on the basis of what is really happening economically—and not just its legal form.

Some examples of transactions being deemed to be something other than their legal form include:

  • The "holding" of a plant that shifts the depreciation claim away from the legal owner
  • A loan to a shareholder considered to be a dividend under Division 7A
  • A return of capital considered to be a dividend
  • Income derived when not received, e.g., as in discount
  • Taxation of financial arrangements
  • Thin capitalisation

Read an August 2013 report prepared by the KPMG member firm in Australia: Fair is foul, and foul is fair

©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now