The ATO has released draft Practical Compliance Guideline PCG 2017/D4  (Guidelines) which apply from 1 July 2017 to new and existing cross-border financing arrangements between related parties.  The Guidelines allow taxpayers to self-assess the risk level of their financing arrangements to determine the likelihood of an ATO review.  As part of the Guideline, the ATO has offered a limited-period amnesty for taxpayers looking to de-risk their financing arrangements without penalties and interest.

For further details, see New ATO guidance on related party cross-border financing arrangements: new amnesty announced dated 24 May 2017.

Taxing share buybacks and RPS redemptions

When is a share capital account not a share capital account for tax purposes?  Why, when it is an equity account, of course!  So said the Full Federal Court recently in Cable & Wireless Australia & Pacific Holding BV (in liquidatie) v FCT in the context of share buybacks.  And on this topic, it is worth revisiting some basics on the buyback of redeemable preference shares.

For further details, see Taxing share buybacks and RPS redemptions dated May 2017.

Tax Ruling on Renounceable Entitlement Offers

The ATO has recently released draft Tax Ruling TR 2017/D3 dealing with rights and retail premiums under a renounceable rights offer for shares.  It complements Taxation Ruling TR 2012/1 released 5 years ago on non-renounceable rights.

For further details, see Tax Ruling on Renounceable Entitlement Offers dated 29 May 2017

Extension of review of Stapled Structures

The Government has announced an extension of its timeline for the review of the tax treatment of stapled structures to the end of July 2017.  For further details, see Treasury media release dated 2 May 2017.


Expertise Area