• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/27/2013

Australia - Taxation of foreign exchange gains and losses 

June 27: In Australia, the taxation of foreign exchange gains and losses in relation to tangible assets is governed by Division 775, which has complexities that present advantages and disadvantages that taxpayers may want to consider.

In applying Division 775, taxpayers are provided a number of elections and opportunities such as:

  • The integration of certain foreign exchange gains and losses into capital gains tax calculation or the calculation of the depreciable cost base of an asset
  • Compliance savings through the use of certain qualifying foreign exchange accounts

Concerning large capital acquisitions, taxpayers need to determine that the foreign exchange treatment is correct—especially in relation to trading stock and depreciable assets, which may not always produce the correct economic result.

Read a June 2013 report prepared by the KPMG member firm in Australia: Foreign exchange gains and losses

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