• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 4/25/2014

Australia - Pension assets, debt-equity considerations, transactions with shareholders 

April 25:  The KPMG member firm in Australia prepared reports on the following developments (read the April 2014 reports by clicking on the hyperlinks provided below):
  • ATO segregates current pension assets - The Australian Taxation Office (ATO) now accepts that sub-accounts maintained for the “sole purpose test” may be a segregated current pension asset, even if other sub-accounts are not held for that purpose. Additionally, the ATO also accepts that this interpretation can apply to informal, or notional, sub-accounts when proper accounting records are maintained by the super fund.

    Read an April 2014 report.

  • Debt-equity considerations - The Board of Taxation released a discussion paper relating to its review into the debt and equity provisions, including whether there can be improved arrangements within the Australian tax system to address any inconsistencies between Australia’s and other jurisdictions’ debt and equity rules that could give rise to tax arbitrage opportunities.

    Read an April 2014 report.

  • Division 7A reform - Division 7A (as introduced in 1998) treats certain transactions between private companies and shareholders or their associates as unfranked dividends on the basis that the transactions were inappropriate distributions of profits. The Board of Taxation has proposed to reform Division 7A.

    Read an April 2014 report.

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