• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/8/2014

Australia - GST compliance; treatment of goodwill and restructuring costs 

July 8:  The KPMG member firm in Australia prepared reports on the following developments (read the reports by clicking on the hyperlinks provided below):
  • Recovering from GST errors - Correctly determining goods and services tax (GST) is difficult to achieve. In a transaction-based tax like GST, errors will happen. The GST regime in Australia encourages voluntary compliance, including making voluntary disclosures when an error is discovered, and a recent change of focus is to a self-assurance model for indirect tax.

    Read a July 2014 report

  • Update on Australian CFC reform - The 2009-10 Federal Budget included an announcement that Australia’s controlled foreign company (CFC) rules would be reformed as part of broader reforms to Australia’s foreign source income anti-tax-deferral rules. Consultation papers on the CFC rules were released in January 2010 and July 2010. This was followed by Exposure Draft legislation in 2011 and a further round of submissions. It then went very quiet.

    Read a July 2014 report

  • ATO solution to LIBOR - The Australian Taxation Office released an “administrative solution” to address the problems created when the British Bankers’ Association decided to cease quotation of AUD LIBOR (London Interbank Offered Rate) last year. For more than 12 months, foreign bank branches (whose interest deductions on intra-branch borrowings are limited to LIBOR) were left without certainty (or more correctly perhaps without a cap) on those deductions or on the amount of interest subject to 5% withholding tax.

    Read a July 2014 report

  • Goodwill assets – aligning commercial, accounting and tax treatment - Goodwill, as an asset, is often bought and sold as part of a parcel of assets that are used to carry on a specific business activity from or at a specific location. A mismatch of treatments of goodwill can often lead to surprising tax outcomes.

    Read a July 2014 report

  • Restructuring costs – As another financial year closes, businesses continue to focus on their core business and changes that may involve selling parts of business, closing unprofitable businesses, increasing efficiency and commencing or acquiring new businesses. Concerning costs involved in these decisions—are they revenue or capital? If they are capital, do they form part of the cost base of a capital gains tax (CGT) asset, part of the cost of a depreciable asset, or are they deductible over time.

    Read a June 2014 report

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