• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/6/2013

Australia - Tax consolidation regime’s asset cost-setting process 

August 6: Australia's "tax consolidation regime" includes an asset cost-setting process, generally reflecting that a purchaser would be indifferent―from an income tax perspective―as to buying the shares in a company versus purchasing the assets of that company.

The asset cost-setting process is complex, with the allocable cost amount calculation involving eight main steps, many sub-steps, asset categorisation issues, as well as a raft of special rules.

However, despite the complexity, the ultimate outcomes turn out to be intuitive and are able to be determined at the outset. For example, in a 100% share acquisition, the expectation is that the assets will be “reset” equal to their market value. If the model produces a different result, the difference must be understood and explained.

Read an August 2013 report prepared by the KPMG member firm in Australia: Understanding your Tax Consolidation asset outcomes

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