• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/11/2014

Australia - Hybrid CIVs, mining rights, employment tax, financial arrangements 

June 11:  The KPMG member firm in Australia prepared reports on the following developments (read the June 2014 reports by clicking on the hyperlinks provided below):
  • Hybrid CIVs and the need for tax reform - The OECD in April 2010 and then the OECD and G20 in September 2013 published reports for governments to encourage investment from long-term institutional investors. Australia's handling of collective investment vehicles contrasts with principles advanced by the OECD.

    Read a June 2014 report.

  • Tax Counsel appointments - A new Chief Tax Counsel, Jeremy Hirschhorn (a KPMG partner), and Deputy Chief Tax Counsel, Kirsten Fish, have been appointed.

    Read a June 2014 report.

  • Proposed repeal of immediate deduction for mining rights - The government released draft legislation to give effect to the former government’s measure, introduced in the 2013/14 Budget, to limit immediate deductibility of expenditure on acquiring mining rights and information. As a result, the acquisition costs of mining rights and information generally would have a default effective life of 15 years.

    Read a June 2014 report.

  • Employment tax - With the financial year-end rapidly approaching, it is time to plan for various employment tax obligations and opportunities. The 2014 annual reconciliation is due in July.

    Read a June 2014 report.

  • Value chain management in the digital economy - There is consensus among tax professionals that the “digitalization” of the global economy has outgrown tax frameworks globally, which were largely built around trade of tangible goods. As part of the BEPS initiative, the Organisation for Economic Co-operation and Development (OECD) is in the process of addressing the apparent “gaps” that exist in global tax frameworks, and has dedicated an entire working group to deal exclusively with the challenges posed by the digital economy.

    Read a June 2014 report.

  • ATO’s view on TOFA-compliant financial reports - Since implementation of the taxation of financial arrangements (TOFA) regime, certain taxpayers have encountered practical issues in complying with the regime. To follow the accounting treatment in relation to financial arrangements for tax purposes, the taxpayer must have certain types of financial reports. In May 2014, the Australian Taxation Office (ATO) issued guidance providing that a financial report must be prepared in accordance with accounting standards and authoritative pronouncements of the Australian Accounting Standards Board (AASB), as relevant to financial arrangements and capable of being applied in respect of the affairs of the entity whose financial position and performance is being reported.

    Read a June 2014 report.

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