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The Australian Government enacted a Multinational Anti-Avoidance Law in December 2015, and the recent Federal Budget on 3 May 2016 proposed that a Diverted Profits Tax also be enacted. Both provisions impact upon large multinationals and their potential impact should be risk assessed by Boards.
On 12 May 2016, ASX issued a consultation paper which sets out the proposed changes to admission requirements to ensure that the ASX market continues to be a market of quality and integrity and remains internationally competitive. Simultaneously, ASIC has issued its own consultation paper aimed at improving the disclosure of historical financial information in prospectuses.
Shareholder intention statements are an established but complex feature of public M&A transactions. They are typically sought by a bidder and/or target to provide a public indication of support for a 'friendly' control transaction (whether by takeover bid or scheme of arrangement).
On 20 April 2016, the first judgment in Australia to accept what is known as the 'indirect market based theory of causation' was handed down by a single judge of the NSW Supreme Court. The case has important implications for numerous ASX-listed companies, particularly those involved in shareholder class actions, where the issue of how to prove causation has been the subject of significant debate.
On 3 May 2016, the Treasurer Scott Morrison delivered the 2016/17 Federal Budget. On 3 May 2016, the Treasurer Scott Morrison delivered the 2016/17 Federal Budget. The tax announcements in the Budget reflect a continuation of the major themes on taxation from the 2015/16 Budget, focussing on small business as a way to grow the economy, and on multinational tax avoidance.
The Government has announced the introduction of two new types of collective investment vehicles (CIVs) as a tax-effective alternative to current Australian pooled investment trusts. The availability of these new CIVs is expected to significantly enhance the ability of Australian fund managers to offer their products to international investors.
The Senate Economics References Committee has released 'Bitter Harvest', a comprehensive report on agribusiness managed investment schemes (Agribusiness Schemes). The report has been prepared in response to the recent collapse of a number of major Agribusiness Schemes and is primarily concerned with the significant and widespread financial losses incurred by the retail investors of those schemes.
The recent Western Australian State Administrative Tribunal decision in the Alacer stamp duty case marks a departure from the generally accepted valuation methodologies of land and chattels (including mining tenements) for landholder duty purposes.
The Supreme Court of Victoria has handed down its first decision relating to the recently introduced 'economic entitlement' provisions of the landholder duty rules contained in the Victorian Duties Act. The case, BPG Caulfield Village Pty Ltd v Commissioner of State Revenue provides important judicial guidance for investors and property developers dealing with Victorian land holding companies and trusts.
The Victorian 2016-17 Budget handed down on 27 April has confirmed the pre-announced significant increases to stamp duty and land tax surcharges for 'foreign purchasers' and 'absentee owners' of Victorian property. These are some of the changes that have been introduced into the Victorian Parliament under the State Taxation and Other Acts Amendment Bill 2016 (Vic).
On 22 April, the Senate Economics References Inquiry released Part II of its report on Corporate Tax Avoidance, ‘Gaming the System’. The report highlights increasing concern with the conduct of multinational companies ‘gaming the system’ through lack of transparency of their corporate tax structures and their unwillingness to be forthcoming with information about those structures not only to the Inquiry but also to the Commissioner of Taxation.
Yesterday, a number of news outlets reported on the investigation by the Australian Taxation Office of over 800 Australian clients of Mossack Fonseca, a Panamanian law firm. Given the ATO's previous offshore voluntary disclosure initiatives, taxpayers who have now come to the ATO's attention will likely face an investigation of amplified intensity.
Broker handling fees are a well established tool that takeover bidders sometimes use to encourage acceptances and achieve all important acceptance momentum. However, recent 'future of financial advice' reforms have significantly curtailed their use. While there is still scope for these fees to continue to be used by bidders and received by brokers, understanding the permissible boundaries is critical.
The new 10% foreign resident capital gains tax withholding regime applies more broadly than many will expect, and both vendors and purchasers, whether Australian resident or not, will need to consider whether or not their transactions are affected.
The Treasurer today announced that on and from 31 March 2016, the foreign investment rules will be amended so that all foreign investors need to seek and obtain prior Foreign Investment Review Board clearance before acquiring critical state-owned infrastructure.
Today, the Treasurer announced the implementation of a 'standard' set of tax-related conditions that will apply to foreign investment clearances. This announcement is significant from a foreign direct investment perspective as it likely requires additional or more detailed upfront tax structuring advice prior to submission of a FIRB application, as well as a higher level of engagement with the ATO on FIRB applications.
Late last year, the High Court handed down its decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq)  HCA 48. The ATO has recently issued a Decision Impact Statement (DIS) setting out its view of the consequences of the High Court's decision.
On 13 November 2015 the Treasurer and Minister of Finance jointly announced that a new double tax treaty had been negotiated with Germany, replacing the 1972 agreement. The text of the new treaty evidences Australia's Treaty policy response to recommendations made by the OECD as part of the base erosion and profit shifting (BEPS) project. In this Alert we summarise the BEPS treaty proposals made by the OECD, and draw attention to Australia's response as evidenced in the new Australia/Germany Double Tax Treaty.
The High Court's decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) held that, in the absence of an assessment, a liquidator is not required to retain funds from asset sale proceeds in order to meet a tax liability which could become payable as a result of a capital gain made on the sale. In doing so, the majority of the High Court affirmed the decision of the Full Federal Court and provided long awaited guidance to liquidators, receivers and administrators.
The Federal Government continues in its implementation of the reforms to Australia's foreign investment regime. The relevant Bills have been introduced into Parliament and a report on them has been handed down by the Senate Economics Committee.