• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/16/2014

Australia - Foreign income tax offsets; evaluating state tax impact 

May 16: The KPMG member firm in Australia prepared reports on the following developments (read the May 2014 reports by clicking on the hyperlinks provided below):
  • Foreign income tax offsets - The release of highly anticipated Draft Taxation Ruling TR 2014/D2—addressing the application of the foreign income tax offset (FITO) limit to foreign currency hedging transactions—has been viewed as disappointing from the perspective of the superannuation industry. In particular, complying with TR 2014/D2 (in its current form) presents significant practical challenges for superannuation funds seeking to change their present hedging arrangements in order to reduce the risk of loss of FITO entitlement.

    Read a May 2014 report.

  • What is the best state in which to do business from a state tax perspective? Various organisations comment on the impact of state taxes on business, and typically, pick a reference model for a notional business and then calculate the state tax impact for that model. From the perspective of payroll tax, the states are much of a “muchness.” The provisions are largely harmonised across the country, and there is relatively little difference between the rates in the major jurisdictions (even with Victoria dropping its rate by 0.05% last week). By contrast, land tax is much less harmonised. The differences in stamp duty implications are even greater.

    Read a May 2014 report.

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