International Newsletter April 2015

SIMPLIFYING TRANSFER PRICING RECORD KEEPING

Taxation Office has released administrative guidance providing small businesses some relief from the complex and costly task of  preparing transfer pricing documentation.

The entities that might qualify for simplified record keeping requirements:

  • Small businesses with a turnover of less than $25 million
  • Distributors with turnover of less than $50 million provided they have a profit before tax ratio of at least 3%
  • Entities with intra-group services of $1 million or less or representing less than 15% of total revenue or expenses of the Australian economic group
  • Entities with inbound loans with a balance of less than $50 million throughout the year

Click here for further information, and to see if you qualify.

CGT RULES FOR NON-RESIDENTS

Non-residents are only subject to Australian CGT on Taxable Australian Property (TAP).

TAP includes:

  • direct and indirect interests in real property situated in Australia
  • business assets used in an Australian branch
  • an option to acquire any of the above
  • a CGT asset elected by an individual to continue to be subject to Australian CGT after they cease to be an Australian tax resident

Shares in Australian resident companies are not TAP (unless the company holds real property).  Accordingly, a non-resident does not generally pay capital gains tax in Australia on the disposal of shares.

Click here to find out more about these rules.

IN THE NEWS

The Re:think tax discussion paper was released by the Australian government last month, aiming to stimulate discussion on the future of our tax system. A key issue raised in the discussion paper is the challenge the tax system faces from changes in the global economy. Chapter 5 discusses Australia’s relatively high corporate tax rate and the fact that our dividend imputation system does nothing to attract foreign investment to Australia. The opportunities that digitisation and globalisation create for multinationals to legally divert profit to lower taxed jurisdictions is also discussed in the paper.

Please click here to read more about the findings and issues raised in the report.

DOING BUSINESS IN AUSTRALIA

For general information on tax and other regulatory issues facing foreign business looking to trade in Australia, we have prepared a “Doing Business in Australia” document.
We hope that it is helpful, and would welcome any queries or feedback you may have. Click here if you’d like to read it.

A NOTE FROM OUR PARTNERS

We have written this newsletter specifically for overseas advisers, with the aim of keeping you abreast of specific developments and changes that are occurring in Australia. These changes might effect your business, and some of your clients, so we hope that you find the articles interesting and useful.

If you would like further information about anything within this newsletter, please feel free to get in touch with Darren or Michael – their contact details are below.

MICHAEL GOODRICK

I am happy to help you if there is anything from this newsletter that you need clarification on. Feel free to contact me me via email by clicking here.

DARREN O’MALLEY

As Stanley & Williamson’s Master of Tax, please feel free to contact me to discuss anything raised in this newsletter. You can send me an email by clicking here.