Australian R&D tax incentives â another reason for ... - PwC

TaxTalk 

Electronic Bulletin of 

Australian Tax Developments 

Issue 96: February 2008 

Australian R&D tax incentives – another 

reason for multinationals to undertake R&D 

in Australia 

Australian tax law has included a broad-based 

incentive for research and development (R&D) since 

1985. In late 2007, a new incentive was introduced 

aimed specifically at taxpayers with international 

operations, being a tax concession to encourage 

such groups to locate R&D functions in Australia. 

Australia has been a favoured location for some 

multinationals to establish technical and/or research 

centres on the basis of available skills, connectivity 

to universities and other public research bodies 

– the Commonwealth Scientific and Industrial 

Research Organisation (CSIRO) in particular – 

and for cost reasons. 

In an effort to build on R&D activity and the 

attractiveness of Australia as a base for such work, 

the Government has passed new tax legislation which 

received Royal Assent on 25 September 2007. This 

allows certain companies that conduct R&D wholly 

or primarily on behalf of qualifying foreign companies 

in the same group to take advantage of new tax 

incentives. The aim of this new program is to increase 

expenditure on R&D in Australia by international 

groups and to improve Australia’s integration into 

global R&D value chains. 

The new R&D law allows a 100% deduction for the 

R&D base cost and a 75% additional deduction 

for the expenditure incurred in excess of the prior 

three-year running average. Where an international 

group already has a presence in Australia, it can 

immediately access the 175% R&D tax concession 

for undertaking research on behalf of an offshore 

related party, assuming certain qualification tests are 

met. In the transitional year, being the income year 

for a company commencing after 30 June 2007 and 

ending before 1 July 2008, the expenditure history for 

these groups for the three prior years is deemed to be 

90%, 80% and 70% respectively of the transitional 

year spend, thus delivering a notional historical 

running average equal to 80% of that spend. This 

incentive is potentially attractive and beneficial to 

some taxpayers. International groups who only have 

a ‘distribution’ function in Australia might consider 

locating some R&D in Australia to access this benefit. 

If a company with existing presence in Australia 

cannot or does not make an R&D tax claim under 

these transitional rules, the company will have to 

‘earn’ its three year R&D history and will not get 

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Inside this issue... 

Australian R&D tax incentives – another reason for 

multinationals to undertake R&D in Australia 1 

Corporate tax developments 2 

International developments 5 

Goods and services tax (GST) developments 7 

State taxes 8 

Personal and expatriate taxes 9 

Other tax news 11

TaxTalk – Electronic Bulletin of Australian Tax Developments 

access to the additional 75% 

deduction until at least 2012. 

Where neither a company nor any 

associate has been present in Australia 

for at least 10 years (including a 

branch operation), the prior history is 

deemed to be zero and therefore all of 

the R&D expenditure in the first year 

could be claimable at the 175% rate. 

To illustrate this, if such a company 

spent $10 million on qualifying R&D 

in a technical centre, it would get an 

additional tax deduction of $7.5 million 

in year one, which is a tax benefit of 

$2.25 million. This treatment presents 

opportunities to those international 

groups who have not previously been 

in the Australian market, or at least not 

at any time during the past 10 years. It 

could be attractive, for example, if such 

a group wished to establish a technical 

centre in Australia to carry out R&D 

for the wider group. For a period of 

years, the effective Australian tax rate 

could be quite low, thus benefiting the 

international group overall. 

This tax break adds to the 

attractiveness of Australia as an R&D 

centre in terms of new entrants, as 

it represents a very competitive tax 

outcome. Setting up new R&D facilities 

in Australia is a win-win situation 

for international groups shifting 

R&D to Australia, as well as for the 

Australian economy. 

For further information, please contact your 

usual PricewaterhouseCoopers adviser, or: 

Gary Waugh, Partner 

PricewaterhouseCoopers Tax 

Research & Development 

Phone: +61 7 3257 8694 

gary.waugh@au.pwc.com 

Sandra Mason, Partner 



Phone: +61 2 8266 0470 

sandra.mason@au.pwc.com 

Tony Baxter, Partner 



Phone: +61 3 8603 4209 

tony.baxter@au.pwc.com 

Corporate tax developments 

Thin capitalisation: how 

safe is the safe harbour? 

Draft Taxation Determination 

TD 2007/D20 issued on 28 November 

2007, discusses the inter-relationship 

between the ‘transfer pricing 

provisions’ and the thin capitalisation 

(TC) rules in relation to ‘debt 

deductions’ i.e. the price of debt that 

may be deductible for tax purposes. 

The Draft Determination states that the 

transfer pricing provisions cannot be 

applied where they would defeat the 

operation of the TC provisions which 

allow an entity to select a statutory 

safe harbour debt amount. The transfer 

pricing provisions cannot be applied 

to completely deny deductions for 

funding costs on debt that is not 

“excess debt” for TC purposes merely 

because those deductions relate to 

a portion of the total debt funding 

that might be considered excessive 

when compared to the debt levels that 

would be required for the entity to be 

regarded as an independent entity 

dealing wholly independently in respect 

of its debt funding arrangements. 

However, the Commissioner’s view 

is that where an entity does not have 

excess debt for TC purposes, that 

does not mean that the transfer pricing 

provisions cannot be applied to adjust 

the pricing of the associated costs 

with reference to what is considered 

to be the appropriate debt/equity level 

if the company had been ‘financially 

independent’. The Determination 

illustrates this scenario by way of 

an example. 

In the example, a company (not being 

an authorised deposit-taking institution) 

has a debt level of $300 million with a 

20% per annum interest rate applying. 

The loan has been provided by the 

foreign parent, which is resident in a 

country which has a double tax treaty 

(DTA) with Australia. The company 

has equity of $100 million and a safe 

harbour debt amount under the TC 

provisions of $300 million. The interest 

rate on the debt has been set to 

reflect the fact that, by reference to 

industry standards, the company is 

thinly capitalised. 

Additional facts from the example 

are that if the company had been 

‘financially independent’, the interest 

rate payable by the company on 

its debt would have been 10% per 

annum, because the company would 

have had less debt and more equity. 

Thus the draft Determination states 

that the interest deduction for the year 

should be reduced under the ‘transfer 

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pricing provisions’ from $60 million 

to $30 million before applying the TC 

rules. Since the company’s debt level 

is not greater than the TC safe harbour 

debt amount, there would not be a 

disallowance of any part of the $30 

million deduction under the TC rules. 

The Commissioner appears to have 

formed the view illustrated by the 

example by effectively incorporating 

provisions of Australia’s DTAs (namely 

the Business Profits Article and 

Associated Enterprises Article) into 

the transfer pricing provisions in the 

Income Tax Assessment Act 1936. 

In the opinion of 

PricewaterhouseCoopers this approach 

is contrary to long-established and 

publicly stated administration of the 

transfer pricing provisions by the ATO 

as well as the arm’s length principle 

supported by the OECD. Furthermore, 

the proposed approach would appear 

to be contrary to the policy intention 

behind the TC regime. 

PricewaterhouseCoopers have raised 

these concerns in representations 

made to the Australian Taxation 

Office (ATO) with regard to the 

draft Determination. 

When the final Determination is issued, 

it is proposed to apply both before and 

after its date of issue. 

Reconsideration of 

consolidation uplift 

involving scrip for 

scrip arrangements 

In our November 2007 edition of 

TaxTalk, we reported that the Minister 

for Revenue and Assistant Treasurer, 

Peter Dutton, had announced that the 

Government intended to change the 

tax consolidation rules. This change 

is to ensure that when an entity joins 

a consolidated or a multiple entry 

consolidated (MEC) group following 

a capital gains tax (CGT) roll-over 

affecting the membership interests of 

the joining entity, the tax cost setting 

rules will not apply to uplift the costs of 

the joining entity’s assets. 

With the change in Government, 

the new Assistant Treasurer, Chris 

Bowen, made an announcement on 

11 January 2008 stating that the new 

Government would now be moving to 

allay concerns in industry regarding 

Mr Dutton’s previous announcements, 

given the disruption they have had 

on the operation of Australian capital 

markets, and in particular scrip for 

scrip transactions. 

Mr Bowen said - “It is quite clear that 

there was insufficient consultation 

with the private sector by the previous 

Government in relation to this decision. 

I have asked the Treasury to consult 

with the private sector about how 

this situation will be resolved. This 

situation is quite urgent, it is necessary 

that this consultation be conducted 

expeditiously, and be completed 

by mid-February. It is necessary 

to ensure that the changes protect 

public revenue while not having the 

unintended consequence of hindering 

the operation of scrip for scrip 

transactions. Accordingly, I have asked 

that the consultation focus on ensuring 

non-contrived commercial takeovers 

involving an exchange of scrip are not 

affected by the changes”. 

With capital markets already in the 

midst of ‘sub-prime’ concerns, 

it is hoped that this matter can be 

expeditiously and sensibly resolved. 

Convertible notes and the 

debt and equity rules 

Draft Taxation Ruling TR 2007/D11, 

issued on 28 November 2007, sets out 

the Commissioner’s preliminary view as 

to whether the issuer of a convertible 

note has an ‘effectively non-contingent 

obligation’ to provide ‘financial 

benefits’ for the purposes of the debt 

test in the tax law in circumstances 

where the issuer can, at any time of 

its choosing, exercise a discretion to 

convert the note into an equity interest 

in the issuer company. TR 2007/D11 

replaces draft Taxation Determination 

TD 2004/D76, which is withdrawn on 

and from 28 November 2007. To the 

extent that the Commissioner’s views 

in that draft Taxation Determination still 

apply, they have been incorporated 

into TR 2007/D11. 

TR 2007/D11 applies to issuers of a 

convertible note where the convertible 

note is issued by a company to a 

lender for a fixed or indefinite term, 

with the following features: 

• for the purposes of the debt and 

equity provisions, the convertible 

note is issued under a scheme that 

is a financing arrangement for the 

issuer and is issued by a company 

for an issue price 

• the issuer has the right to terminate 

the convertible note at any time by 

providing shares that are ‘equity 

interests’ in the issuer, and 

• alternatively, the issuer must 

return the issue price to the 

lender at the end of the life of 

the convertible note. 

The draft Ruling states that the issuer 

of a convertible note that can be 

converted at any time, at the issuer’s 

discretion, into a share that is an 

equity interest in the issuer, will not 

have an effectively non-contingent 

obligation to provide financial benefits 

for the purposes of the debt test, 

unless that option to convert should 

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be disregarded in light of the full 

consideration of the pricing, terms 

and conditions under which the note 

was issued. Since generally there 

would be no effectively non-contingent 

obligation to provide financial benefits, 

the convertible note issue would not 

satisfy the debt test and would be an 

‘equity interest’. 

Once finalised, the Ruling will apply 

both before and after its date of issue. 

Australian Tax Office 

position on s45B and 

capital reductions 

On 20 December 2007, the 

Commissioner issued draft Practice 

Statement PS LA 1552, outlining the 

Commissioner’s proposed application 

of the anti-capital streaming rules in 

s45B of the Income Tax Assessment 

Act 1936 (ITAA 1936) to capital 

reductions. Draft PS LA 1552 explains 

that s45B was introduced because of 

changes in 1998 to the Corporations 

Law which removed some of the 

restrictions on share capital reductions 

by giving companies the ability 

to return capital, subject to the 

reduction being fair and reasonable 

to shareholders as a whole and not 

prejudicial to creditors. As a result of 

these changes to the Corporations 

Law, the tax law was amended to 

include a general anti-avoidance 

provision concerned with providing 

a framework that would prevent 

companies from distributing what 

are effectively profits to shareholders 

as preferentially-taxed capital rather 

than dividends. 

Since its introduction, s45B has been 

a continuing concern for corporate 

Australia, and more so with the 

provision being extended to non-share 

equity interests with effect from 1 July 

2001. The Commissioner has now 

issued this draft Practice Statement as 

a starting point in providing guidance 

to corporate Australia on the way in 

which the Commissioner considers the 

provision applies. On this aspect, the 

draft Practice Statement provides a 

number of examples. 

Importantly, the Commissioner states 

that s45B is not a “profits first” rule but, 

rather, it is a sanction against schemes 

to provide shareholders with capital 

benefits, including distributions of 

share capital, which were entered into 

or carried out for a significant purpose 

of enabling the shareholder to benefit 

from receiving preferentially taxed 

capital rather than profit. However, the 

Commissioner goes on to state that 

although s45B does not apply on a 

“profits first” basis, by implication it 

does presuppose some objective nontax 

basis for distributing capital rather 

than profits, where both are available. 

Comments on draft PS LA 1552 were 

due by 29 January 2008. 

Private companies and 

deemed dividends 

Taxation Determination TD 2008/1, 

issued on 16 January 2008, sets out 

the Commissioner’s views regarding 

failure by a shareholder (or their 

associate) to repay a trade debt 

owed to a private company within 

the agreed payment term and the 

operation of the deemed dividend 

exclusion in s109M of Division 7A of 

the ITAA 1936. The Commissioner is 

of the view that such a failure does not 

prevent the exclusion from applying, 

where the private company deals with 

the failure to pay in the same manner 

in which it deals with defaults on 

similar loans made to parties at arm’s 

length. This Determination sets out the 

same position as that reflected in its 

predecessor draft, TD 2007/D17. 

Share issues and 

clarification on cost 

base rules 

Draft Taxation Ruling TR 2008/D1, 

issued on 16 January 2008, sets 

out the Commissioner’s preliminary 

views on the tax consequences 

for companies of issuing shares as 

consideration for acquisition of assets. 

In particular, the Draft Ruling expresses 

the preliminary view that: 

• A company issuing shares to acquire 

assets incurs no loss or outgoing for 

the purposes of s8-1 of the Income 

Tax Assessment Act 1997 (ITAA 

1997). However, TR 2008/D1 states 

that the availability of a deduction 

under s8-1 for a loss or outgoing 

incurred to acquire assets is not 

affected by the company “setting 

off” its obligation in satisfaction of 

an independently arising obligation 

of the vendor of the assets to 

subscribe for shares in the company. 

In this event, the company may be 

entitled to claim a deduction for 

the loss or outgoing it incurred to 

acquire the asset, notwithstanding 

that it pays for the asset by way of 

set-off against the consideration due 

to it for the issue of the shares. 

• Trading stock acquired by issuing 

shares will ordinarily have no cost 

for income tax purposes, since there 

can be no cost for trading stock 

where there is no loss, outgoing or 

expenditure incurred to acquire the 

stock. However, where the disposal 

of the trading stock is outside the 

ordinary course of the vendor’s 

business, the company is treated 

as having acquired the stock for 

the amount included in the vendor’s 

assessable income and therefore 

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as having incurred expenditure of 

that amount. Accordingly, the assets 

will have a “cost” for income tax 

purposes in these cases. 

• A company issuing shares as 

consideration for the acquisition of 

depreciating assets, has a cost of 

those assets for the purposes of 

Division 40 of the ITAA 1997 equal to 

the market value of the shares at the 

relevant time. 

• For capital gains tax (CGT) 

purposes, the market value of shares 

issued as consideration to acquire 

an asset will be a component of the 

CGT cost base of the assets. In this 

respect, although when a company 

issues shares as consideration for 

assets, the provision of the shares 

is not money paid or required to be 

paid, and does not involve a liability 

to pay money, it is the provision 

of property given, or required to 

be given, in respect of acquiring 

the assets. 

The Draft Ruling does not deal with 

the tax consequences for taxpayers of 

receiving shares for assets. 

Comments can be made on the Draft 

Ruling until 29 February 2008. Once 

finalised, the Ruling will apply both 

before and after its date of issue. 

International developments 

Revised double tax treaty 

(DTA) with Finland 

According to the Department of 

Treasury website, the revised Australia- 

Finland DTA entered into force on 10 

November 2007. This revised DTA 

reduces withholding tax on certain 

dividend, interest and royalty payments 

in line with Australia’s tax treaties 

with the United States and the United 

Kingdom, and the more recent DTAs 

with France and Norway. 

For Australian tax purposes, the 

revised DTA with Finland has effect 

on income derived by a non-resident 

to whom the DTA applies from the 

following dates: 

• in relation to withholding tax - on 

income derived by a non-resident, 

including dividends, royalties and 

interest, on or after 1 January 

2008, and 

• in relation to other Australian tax 

on income, profits or gains - any 

income year beginning on or after 

1 July 2008. 

For Finnish tax purposes, the DTA 

will have effect in respect of taxes 

as follows: 

• in relation to taxes on income 

withheld at source - derived on or 

after 1 January 2008, and 

• in relation to other taxes on income 

- where taxes are chargeable in any 

income year beginning on or after 

1 January 2008. 

Additionally, the new DTA will have 

effect in relation to the exchange of 

information (Article 25) between the 

two countries from 10 November 2007, 

and in relation to the assistance in 

collection of taxes (Article 26), the DTA 

has effect from a date, presently not 

known, agreed in an exchange of notes 

between Australia and Finland. 

Canadian goods and 

services tax rate reduction 

As expected, on 31 December 2007, 

the Canadian Government announced 

the reduction of the goods and 

services tax rate to 5% effective 

from 1 January 2008. The reduction 

in the rate is part of a two-stage 

process announced as part of the 

Government’s 2005-2006 election 

campaign. The reduction from 6% to 

5% builds on the Government’s initial 

cut from 7% to 6% on 1 July 2006. 

New Zealand proposes 

changes to the taxation 

of foreign dividends 

The New Zealand (NZ) tax authorities 

released an Issues Paper proposing 

significant changes to the taxation of 

foreign dividends under the proposed 

reforms to NZ’s international tax 

rules that include an active income 

exemption for controlled foreign 

companies (CFCs). The Paper 

also discusses transitional and 

consequential matters related to the 

repeal of the “conduit rules” and the 

treatment of existing attributed CFC 

losses and carried forward foreign 

tax credits. 

Key proposals include: 

• ordinary dividends received by NZ 

companies from CFCs and nonportfolio 

foreign investment funds 

(FIFs) will be exempt from NZ tax 

• the treatment of dividends when the 

interest held is a “fixed-rate share” 

will be dealt with in a later review of 

the non-portfolio FIFs. In the interim, 

these dividends will continue to 

be taxable 

• dividend withholding payment 

(DWP) will be repealed for most 

foreign dividends derived by NZ 

resident companies in the 2009- 

2010 and later income years. As a 

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consequence, the underlying foreign 

tax credit (UFTC) rules will become 

redundant and will also be repealed 

• most foreign dividends from portfolio 

interests received by companies will 

be exempt. Dividends derived from 

entities that are exempt from the FIF 

rules will continue to be taxed 

• with the repeal of the conduit rules, 

conduit tax relief account balances 

as at the start of the 2009-2010 

income year will be cancelled, 

subject to a transitional antiavoidance 

rule, and 

• attributed CFC net losses and 

foreign tax credits accrued under 

the current rules can be carried 

forward into the new system, but will 

continue to be reduced by reference 

to total CFC net income (including 

non-attributable income). 

The taxation of foreign dividends 

received by persons other than 

companies (such as individuals 

and trustees) is not affected by 

the proposals. 

The suggested changes would apply 

from the start of the 2009–2010 

income year. 

The deadline for commenting on the 

proposals is 15 February 2008. 

New Zealand: review 

aimed at reducing 

compliance costs 

A NZ Government Discussion Paper 

released on 5 December 2007 seeks 

feedback on a range of ideas aimed at 

reducing tax-related compliance costs 

for small and medium-sized enterprises 

(SMEs). Measures suggested include: 

• raising business tax thresholds 

for certain Pay As You Earn, fringe 

benefits tax (FBT) and goods 

and services tax (GST) filing and 

registration requirements, and 

introducing a single threshold for 

certain concessions 

• simplifying the rules for deducting 

entertainment and legal expenses 

• for FBT purposes, introducing a 

single category of restricted private 

use motor vehicles for SMEs 

and simplifying record-keeping 

requirements for the private use of 

motor vehicles 

• simplifying GST invoice disclosure 

requirements, and 

• for tax administration purposes, 

allowing the correction of minor 

errors in subsequent returns and 

reviewing certain other rules. 

Some of the measures would generally 

apply from 1 April 2009 and are 

proposed to be included in the next 

available taxation Bill (eg the thresholdrelated 

amendments). The more 

complex measures will be included in a 

later tax Bill, with the likely application 

date being 1 April 2010. 

Closing dates for submissions are 

31 January 2008 for submissions on 

thresholds, and 29 February 2008 for 

submissions on all other matters. 

For further information please contact your 


Peter Collins, Partner 


International Tax and 

Transaction Services 

Phone: +61 3 8603 6247 

peter.collins@au.pwc.com 

Norah Seddon, Partner 




Phone: +61 2 8266 5864 

norah.seddon@au.pwc.com 

United Kingdom (UK) 

proposal to tax interest 

like returns 

On Thursday 6 December 2007, the 

UK Revenue published a consultation 

document detailing proposed draft 

legislation in relation to “financial 

products tax avoidance”. In the 

past, the UK Government has often 

responded to avoidance by setting out 

detailed rules which target a specific 

arrangement. In a departure from 

this approach, the UK Government 

proposes to introduce “principlebased” 

legislation as follows: 

• The disguised interest principle: A 

return designed to be economically 

equivalent to interest is to be taxed 

in the same way as interest. 

Where a UK company is party 

to an arrangement designed to 

produce an interest-like return that 

is not taxed or not wholly taxed, 

the proposed rules may tax returns 

as if they were returns on a loan 

relationship (ie tax returns on the 

arrangement like interest income 

which is taxed on an accruals 

basis). Targeted schemes will be 

those which seek to convert taxable 

interest into an exempt dividend or 

capital gain. 

For example, a UK company holding 

redeemable preference shares 

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issued by a UK or foreign company 

might result in a tax liability to the 

holder without any deduction to 

the issuer. 

• The principle for income stream 

transfers: Receipts which are 

derived from a right to receive 

income and do not involve any loss 

of capital are economic substitutes 

for income and are to be treated for 

tax purposes as income. 

Targeted schemes will be those 

which are designed to turn 

economic income into a return that 

is treated by tax law as capital. 

The consultation document invites 

detailed comments on the proposed 

legislation by the end of February 2008. 

Legislation is intended to be introduced 

in Finance Bill 2008 (ie effective 

1 April 2008). 



Neil Fuller, Partner 




Phone: +61 2 8266 2025 

neil.fuller@au.pwc.com 

Germany: tax amendments 

for 2008 

The 2008 Annual Tax Bill was enacted 

on 29 December 2007. From an 

international tax structuring point 

of view, the most relevant changes 

brought by the Bill are: 

• the non-deductibility of losses 

connected with inter-company 

loan receivables 

• the re-written general anti-abuse rule 

• the taxation of previously untaxed 

profits (so-called ‘EK 02’) 

• the non-applicability of German 

controlled foreign company 

(CFC) rules within the European 

Union/European Economic 

Community, and 

• the reduction in the non deductible 

amount of certain finance costs for 

trade tax purposes. 

The new rules will generally apply 

to assessment periods from 

2008 onwards. 



Christian Holle, Partner 


International Tax 

Phone: +61 2 8266 5697 

christian.holle@au.pwc.com 

Goods and services tax 

(GST) developments 

New exempt taxes, fees 

and charges determination 

Division 81 of the A New Tax System 

(Goods and Services Tax) Act 1999 

(GST Act) provides that GST applies 

to payments of taxes, fees and 

charges, except those taxes, fees 

and charges that are excluded by 

a determination of the Treasurer. 

A New Tax System (Goods and 

Services Tax) (Exempt Taxes, Fees and 

Charges) Determination 2008 (No.1), 

registered on 16 January 2008, lists 

the fees, taxes, and charges that are 

excluded from the scope of GST by 

a determination of the Treasurer (in 

accordance with Division 81). The 

Determination replaces the former year 

2007 Determination and is effective 

from 17 January 2008. 

High Court grants special 

leave in Reliance Carpet 

In our August 2007 edition of TaxTalk, 

we reported that the Full Federal 

Court in Reliance Carpet Co Pty Ltd 

v Commissioner of Taxation [2007] 

FCAFC 99 (5 July 2007) had held 

that there was no taxable supply in 

circumstances where a deposit for the 

sale of land was forfeited, and thus 

there was no GST liability payable 

by the vendor. Not surprisingly, the 

Commissioner sought special leave 

from the High Court for this matter to 

be appealed, and on 14 December 

2007, the High Court granted this 

special leave request. The outcome 

of this appeal is eagerly awaited. 

For further information, please contact your 


Patrick Walker, 

National GST Leader 


Goods & Services Tax 

Phone: +61 2 8266 1596 

patrick.walker@au.pwc.com 

Kevin O’Rourke, Partner 



Phone: +61 2 8266 3114 

kevin.orourke@au.pwc.com 

Ken Fehily, Partner 



Phone: +61 3 8603 6216 

ken.fehily@au.pwc.com 

Michelle Tremain, Partner 



Phone: +61 8 9238 3403 

michelle.tremain@au.pwc.com 

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State taxes 

New duty legislation in 

Western Australia (WA) 

Proposed legislation was introduced 

into the Western Australian Parliament 

on 28 November 2007 to replace 

the Stamp Act 1921 (WA). If passed 

by Parliament, the proposed 

commencement date of the new 

legislation is 1 July 2008. 

This proposed legislation represents 

substantial changes to the existing 

stamp duty law in WA. These 

substantial changes include 

measures to: 

• Introduce a new landholder 

regime that imposes duty on 

relevant acquisitions of interests 

in companies and unit trusts that 

directly or indirectly own interests 

in land in WA valued at $2 million 

or more. 

This measure will replace the 

existing landrich regime. Broadly, 

under the existing landrich regime, 

relevant acquisitions of interests in 

companies that directly or indirectly 

own Western Australian land valued 

at $1 million or more and where the 

value of all direct or indirect interests 

in land represent 60% or more of 

the value of all property to which 

the company is directly or indirectly 

entitled (excluding certain asset 

categories) are subject to duty. 

This measure represents a 

broadening of the tax base 

notwithstanding the increase in the 

land value threshold from $1 million 

to $2 million. 

• Extend the availability of exemptions 

from stamp duty for intra-group 

transfers of property. 

Currently, existing corporate 

reconstruction exemptions require 

the parties to be associated for 

3 years before the transfer and 

to remain associated for a 5 year 

period after the transfer, and 

exemption is not available if one 

of the entities is a trust. Under the 

new provisions, the pre-transfer 

association requirement will 

be abolished, the post-transfer 

association requirement will be 

relaxed and the exemption will be 

extended to allow transfers to and 

from unit trusts. 

• Provide that duty is not payable 

on acquisitions of units in a private 

unit trust scheme unless the trust is 

a landholder (as described above) 

and 50% or more of the units (in 

total) are acquired. Currently, the 

acquisition of any units in a private 

unit trust scheme that owns property 

in WA can be subject to duty. 

• Reduce stamp duty rates by 

approximately 5%, with the 

maximum rate of duty applying to a 

transfer of property being reduced 

to 5.15%. The maximum rate is 

currently 5.4%. 

• Introduce a general anti-avoidance 

provision to apply to transactions 

that are blatant, artificial or contrived 

for the sole or dominant purpose of 

eliminating, reducing or postponing 

a liability to duty. Currently, a general 

anti-avoidance provision does 

not exist. 

Australian Capital Territory 

(ACT) duty amendments 

The ACT Duties Act 1999 has been 

amended with effect from 5 December 

2007 in respect of long-term leases 

which are dutiable, and also in respect 

of transitional provisions for other 

leases where duty is abolished from 

1 July 2009. The amendments include 

the following: 

• the definition and commencement of 

a long-term lease has been clarified 

and ensures that, where either a 

new lease granted on surrender 

of another lease to the same or 

associated person, or an extension 

of an existing lease, result in a 

term greater than 30 years, it is 

to be treated as if it were a longterm 

lease 

• there is clarification that an option 

to renew a lease granted before 

1 July 2009 may be included in the 

duty base if the option is executed 

after 30 June 2009, where the main 

purpose is to defer execution of the 

instrument to avoid lease duty, and 

• where a lease has been granted 

on surrender of another lease, 

and the lease results in a longterm 

lease, the duty that is payable 

at conveyance rates is to be 

reduced by the amount of any 

duty already paid under the original 

lease. The same position will also 

apply where the term of a lease 

is extended, or further extended. 

ACT payroll tax changes 

On 6 December 2007, changes to the 

ACT’s payroll tax laws were introduced 

into Parliament. In introducing the 

changes, the Chief Minister stated that 

the “changes will make administration 

more consistent and reduce red tape 

and compliance costs for businesses 

across State and Territory borders. 

The changes are a result of an 

agreement in March by all State and 

Territory Treasurers to overhaul payroll 

page


tax arrangements. It was agreed 

that the States and Territories would 

focus on simplifying and harmonising 

payroll tax provisions, while retaining 

control over rates of tax and 

tax‐free thresholds”. 

According to the Chief Minister, the 

new Bill will implement the remaining 

agreed items and amend the existing 

payroll tax legislation to: 

• adopt an exemption to payroll 

tax for wages paid in the ACT for 

employees who work in another 

country for a continuous period of 

six months or more 

• adopt exemption rates for 

motor vehicle allowances and 

accommodation allowances 

linked with those set annually by 

the Australian Taxation Office for 

income deduction purposes 

• adopt a single ‘gross up’ factor 

for the purpose of calculating the 

amount to be taken as wages for 

payroll tax purposes of benefits that 

attract a fringe benefits tax (FBT) 

liability, and 

• adopt the New South Wales 

and Victorian payroll tax 

grouping provisions. 

There are also a number of transitional 

provisions and consequential 

amendments to other existing pieces 

of legislation. 

The changes are expected to take 

effect from 1 July 2008. 

Queensland (Qld) 

payroll tax relief for 

emergency services 

The Qld Treasurer has announced 

that employers whose workers are 

deployed as emergency services 

volunteers will be exempt from paying 

payroll tax for the hours they spend 

away from their jobs in the field. The 

Treasurer said the exemption would 

apply for employers if staff are involved 

in bushfire fighting activities as a 

volunteer or in emergency activities 

as a volunteer emergency worker. The 

exemption will not apply to wages 

for recreation leave, annual leave, 

long service leave or sick leave. It 

is proposed that the exemption will 

take effect from 1 July 2008. 



Barry Diamond, Partner 


Stamp Duty 

Phone: +61 3 8603 1118 

barry.diamond@au.pwc.com 

Angela Melick, Partner 


Stamp Duty 

Phone: +61 2 8266 7234 

angela.melick@au.pwc.com 

Personal and expatriate taxes 

Legal costs were related 

to employment 

The Full Federal Court in Federal 

Commissioner of Taxation v Day 

[2007] FCAFC 193 has held that legal 

expenses incurred by a Customs 

officer were tax deductible. The costs 

were incurred by the taxpayer in 

defending charges brought against 

the officer under the Public Service 

Act 1922 (Cth). The taxpayer, a senior 

officer with the Australian Customs 

Service (ACS) was charged on three 

separate occasions for various alleged 

breaches of the relevant statute, 

namely for breaching the standards 

of conduct for ACS officers (“the 

first charge”), for failing to accurately 

record attendance in connection with 

his employment (“the second charge”) 

and for failing to fulfil his duties as an 

officer of the ACS (“the third charge”). 

In respect of the first charge, the 

taxpayer had been demoted, but as 

a result of legal action, this demotion 

was overturned. The taxpayer incurred 

legal costs in instigating this legal 

action. In respect of the second 

charge, the taxpayer was initially 

required to pay an amount to the ACS, 

but this position was amended on 

an appeal to the relevant Disciplinary 

Committee, which ordered that the 

taxpayer be transferred to another 

position and paid accordingly. This, 

in effect, was a demotion. The taxpayer 

incurred legal costs in respect of 

advice regarding the appeal. In respect 

of the third charge, the taxpayer took 

legal action seeking orders from 

the Court including orders that the 

charges be set aside. The taxpayer 

was unsuccessful in this regard and 

incurred substantial legal costs. 

At first instance, the Federal Court 

held that only the legal fees incurred 

in respect of the second charge were 

tax deductible, and the deductibility 

of these fees was not required to 

be reconsidered by the Full Court. 

The issue before the Full Court was 

whether the fees relating to the first 

and third charges were deductible 

under the general deduction provision 

of the tax law, and specifically, whether 

the amounts were incurred in gaining 

or producing assessable income. 

In a majority decision (Justice Dowsett 

dissenting), the Full Court held that 

the fees were tax deductible. In the 

view of Justice Edmonds, it was the 

taxpayer’s employment which was 

“the occasion of the expenditure 

and the taxpayer’s performance 

and observance of the duties of 

page


that employment is undoubtedly 

productive of assessable income”. 

His Honour noted that “In both cases, 

the taxpayer is incurring expenditure 

(legal expenses) defending, in the first 

case, his performance of duties of 

his employment, and in the second 

case, his observance of duties of his 

employment. The performance of one 

kind of duty and the observance of the 

other kind of duty equally contribute to 

the taxpayer’s continued employment 

which is productive of assessable 

income, and expenditure incurred 

in defence of either performance or 

observance of a duty is, in my view, 

occasioned by that employment.” 

Justice Spender was of a similar view. 

In contrast, Justice Dowsett held that 

none of the costs were deductible 

and stated that “where the conduct 

in question is quite beyond anything 

contemplated as being involved in the 

taxpayer’s duties, it will be very difficult 

to apply the test established in Payne 

[a reference to the High Court decision 

in Commissioner of Taxation v Payne 

(2001) 202 CLR 93] in such a way as to 

render the outgoings deductible”. 

With a number of recent high profile 

Court cases alleging breaches of 

employment and director duties, 

this is an important decision for 

those involved. 

Personal services business 

not carried on 

In IRG Technical Services Pty Limited 

v Deputy Commissioner of Taxation 

and KD Owen as trustee for Owen 

Family Trust v Deputy Commissioner of 

Taxation [2007] FCA 1867 (5 December 

2007), the Federal Court agreed with 

the Commissioner that the applicants 

were not entitled to a “‘personal 

services business determination’ in 

respect of income derived by each 

applicant. As a result, the income of 

each applicant was required to be 

returned as assessable income in the 

tax return of the individual from whose 

skill or personal efforts the income 

was derived. 

In this case, a resource company 

engaged labour procurement 

companies to obtain skilled engineers 

for a project. These procurement 

companies contracted with each 

applicant to procure the services of 

(in each case) a named individual, 

who was to provide services to the 

project. Thus each applicant’s income, 

paid to each applicant by the relevant 

labour procurement company, was 

effectively derived from the services 

provided to the project by the relevant 

named individual. 

Under the tax law, this income of the 

entity is to be treated as income of the 

relevant individual unless the income 

is from a ‘personal services business’ 

of the entity. In the cases under 

consideration, this meant that each 

applicant was required to show that, 

in respect of the activities from which 

the income was derived, the ‘results 

test’ was or would be satisfied. That 

test is that generally at least 75% of 

the relevant income is for producing a 

result, the entity is required to supply 

the tools of trade necessary to produce 

the result, and the entity is liable for 

rectifying any work performed. 

In concluding that the ‘results test’ 

was not satisfied, the Court found 

that the amounts paid by the resource 

company were not paid for results, but 

were paid for the time spent by each 

skilled individual as part of a team 

of workers engaged in the project. 

Importantly, the Court said that the 

‘deliverables’ were the product of 

the work of the team. In the Court’s 

view, the commercial arrangement 

was that payment would be made by 

the hour for 45 hours per week, paid 

each fortnight. There was no payment 

which was made for the production of 

a deliverable. 



Rohan Geddes, Partner 


International Assignment Solutions 

Phone: +61 3 8603 3844 

rohan.geddes@au.pwc.com 

Jim Lijeski, Partner 



Phone: +61 2 8266 8298 

jim.lijeski@au.pwc.com 

Tony Halcrow, Director 



Phone: +61 2 8266 7279 

anthony.halcrow@au.pwc.com 

page 10


Other tax news 

No FBT on loan repayments 

In our April 2007 edition of TaxTalk, we 

reported that the Federal Court at first 

instance had held in Commissioner 

of Taxation v Slade Bloodstock [2007] 

FCA 188 that based on the particular 

facts of the case the repayments of 

loans to employees of a unit trust were 

subject to fringe benefits tax (FBT). 

In deciding against the employer and 

agreeing that FBT applied, Justice 

Heerey had made the observation that 

the particular employees had received 

no remuneration for their services to 

the employer, and the fact that the 

payments were made to extinguish an 

existing liability owed by the employer 

did not preclude the loan repayments 

from being classified as fringe benefits 

for FBT purposes. 

On appeal to the Full Federal Court, 

in a surprising development, the 

Commissioner agreed with the 

appellant taxpayer that FBT should 

not apply to the repayments, and both 

the taxpayer and the Commissioner 

applied for an order from the Court 

that the appeal should be allowed. 

In this respect, the Commissioner 

acknowledged that the repayments 

were not remuneration provided to the 

employees and that the repayments 

had arisen from the loan contract 

entered into by the parties, and that 

this loan contract was independent of 

any employment contract entered into. 

In making the consent orders 

requested, the Court agreed with the 

correctness at law of this position, 

stating that “our views on these issues 

are consistent with the policy and 

purpose underlying the fringe benefits 

tax legislation of which the FBT Act 

forms an integral part. Fringe benefits 

tax was only ever intended to tax the 

provision of benefits where, if the 

benefit had been provided in cash, 

there would have been a derivation of 

income. It is true that it was also the 

policy and purpose of the legislation 

to tax benefits which might not be 

income of the employee because the 

benefit was provided to an associate 

of the employee or because the benefit 

could not be converted into money. 

But it was never intended to apply 

to a repayment of a loan made by 

an employee to his employer; such a 

repayment could never be a derivation 

of income by the lender/employee”. 

The Commissioner’s view of the 

law, as evidenced by his decision to 

request consent orders from the Court, 

puts at ease the concern of many 

taxpayers who simply finance the 

activities of their business enterprise 

with debt, and obtain repayment of 

the debt when funds allow. There is 

clearly no remuneration from receiving 

repayment of one’s own funds, and the 

Commissioner’s agreement with this 

position is welcome news. 

Deductibility of 

management fees 

In two test cases (Spriggs v Federal 

Commissioner of Taxation [2007] 

FCA 1817 and Riddell v Federal 


FCA 1818), the Federal Court at first 

instance has held that management 

and agency fees incurred by two 

professional sport-persons were tax 

deductible. The cases involved football 

players in the Australian Football 

League and the Australian Rugby 

League, respectively. In deciding that 

the fees were tax deductible under 

the general deduction provision of the 

tax law, the Court was satisfied that 

the fees were incurred as part of the 

income-producing business carried 

on by each taxpayer, and were not 

incurred on capital account to secure a 

capital asset (as the Commissioner had 

argued), but rather, were incurred for 

services provided by the agent on an 

ongoing basis to the taxpayer. 

In rejecting the Commissioner’s 

arguments, the Court distinguished 

each case from the High Court 

decision in Federal Commissioner of 

Taxation v Maddalena (1971) 45 ALJR 

426, where the taxpayer, a professional 

page 11


footballer, had claimed legal fees and 

travel costs incurred by him in securing 

a new playing contract. These costs 

were held to be non-deductible as they 

were incurred at a ‘point too soon’ to 

be considered as having been incurred 

in gaining assessable income. In the 

Spriggs and Riddell cases, Justice 

Gordon found that the costs were 

incurred only upon the footballer 

entering into the contract negotiated 

by the agent. The further matter upon 

which Justice Gordon distinguished 

these cases from Maddalena was the 

fact that, in Maddalena, the taxpayer 

was not a full-time professional 

footballer, whereas the taxpayer in 

both Spriggs and Riddell derived 

all their income from professional 

football activities. 

Not surprisingly, the Commissioner 

has appealed both decisions to the 

Full Federal Court. 

Bluebottle stung in a win for 

the Commissioner 

In Bluebottle UK Limited v Deputy 


HCA 54 (5 December 2007), the High 

Court has unanimously found in the 

Commissioner’s favour by rejecting 

the taxpayer’s appeal. This case 

concerned whether the assignment of 

an entitlement to dividends meant that 

a notice issued by the Commissioner 

Trust cloning may be ineffective 


Commissioner released a document 

(media release) on the Australian 

Tax Office (ATO) website titled 

Trust Cloning. The document is 

designed to alert tax professionals 

and taxpayers that certain ‘trust 

cloning’ arrangements entered into 

purportedly in reliance on Taxation 

Ruling TR 2006/4 may be ineffective. 

Taxation Ruling TR 2006/4 deals with 

a capital gains tax (CGT) exception 

that applies when an asset is 

transferred between two trusts that 

have the same beneficiaries and 

trust terms – commonly referred to 

as ‘trust cloning’. The Ruling says 

that even minor differences between 

the two trusts may prevent the 

exception from applying, though the 

trusts can have different trustees and 

settlors. The ATO’s understanding 

of the original legislative policy is 

that the exception was designed to 

apply only in respect of the transfer 

of an asset as a result of a change 

of trustee of a single trust. That is, 

the exception was not intended to 

apply in respect of the transfer of 

an asset between two separately 

existing trusts. Nevertheless, the ATO 

has acknowledged that the law was 

drafted and applies more broadly 

than suggested by the original policy, 

and can literally apply in relation to 

two trusts. However, the ATO states 

that the exception can only apply 

where the requirements that the terms 

and beneficiaries are the same are 

strictly satisfied. 

Since issuing TR 2006/4, the ATO has 

become aware of situations where 

trusts, particularly discretionary trusts, 

may not be ‘the same’ and therefore 

assets transferred between the trusts 

will trigger CGT. In other words, 

the exemption does not apply. The 

Commissioner expresses concern 

in this media release that some 

practitioners may not appreciate 

what is required for the exception 

to be satisfied. The media release 

provides certain examples where the 

exception will not apply. For example, 

the media release states that it may 

not be possible to clone a trust with 

named beneficiaries and a clause that 

also includes as a beneficiary any 

trust in which a named beneficiary 

has an interest (including as a 

potential object). Including this same 

clause in both trusts will result in the 

trustee of the new or ‘cloned’ trust 

being a beneficiary of the original 

trust and the trustee of the original 

trust being a beneficiary of the new 

trust. Therefore, according to the 

Commissioner, the beneficiaries of 

the original trust will be the named 

beneficiaries and trustee of the new 

trust, and the beneficiaries of the new 

trust will be the named beneficiaries 

and the trustee of the original trust. 

But because it is not possible for a 

trust to be a beneficiary of itself, the 

two trusts do not have exactly the 

same beneficiaries and the exception 

therefore would not apply. 

The Commissioner is currently 

considering the representations 

made by practitioners and their 

implications. The media release states 

that taxpayers or their advisers who 

have relied on the exception to ‘clone’ 

trusts, but who are now concerned 

that the exception test was not 

satisfied are encouraged to contact 

the ATO [on 132 866] or to lodge a 

private ruling request in respect of 

their circumstances. 

page 12


to the dividend paying company, 

such notice requiring the company to 

pay dividends to the Commissioner 

to satisfy certain tax liabilities of the 

shareholder, operated with the effect 

that the Commissioner’s notice was 

ineffective in respect of the dividends 

paid. The taxpayer argued that the 

effect of the assignment was that the 

company had no obligation to pay 

dividends to the shareholder (but had 

an obligation to pay the dividends 

to the assignee) and thus the notice 

issued by the Commissioner had 

no application. This was because, 

according to the taxpayer’s argument, 

the company paying the dividend was 

not in receipt or control of monies 

owing or due to the taxpayer. 

The High Court rejected this argument 

and held that the company was 

in control of money owing to the 

shareholder and that this money 

was required to be paid by the 

Commissioner in accordance with 

the notice issued. 

The Court considered a number 

of matters in reaching its decision, 

including the effect of provisions in the 

Corporations Act 2001 (Cth) governing 

the declaration of dividends, the 

interaction of those provisions with 

a company’s Constitution, and the 

nature of the assignment entered into. 

Ultimately, the Court concluded that 

the contract between the company and 

its members required the company to 

pay the dividends to the shareholder 

registered on the relevant record date. 

This meant that, notwithstanding that 

the company had been given notice 

of the assignment entered into by the 

shareholder, and had been directed by 

that shareholder to pay the dividend 

to the assignee, the company was not 

obliged to do so. It had a contract to 

pay the dividend to the shareholder, 

and this contract was unaffected by the 

assignment or by the direction given to 

it by the shareholder. The assignment 

did not alter the contractual obligation 

to pay the dividends, and the 

company, which was thus liable under 

company law to pay the dividends 

to the shareholder, was in receipt of 

money due to the shareholder and 

was thus obliged to comply with the 

Commissioner’s notice. 

High Court to hear transfer 

pricing issue 

In our August 2007 edition of TaxTalk, 

we reported that the Full Federal 

Court had held, in WR Carpenter 

Holdings Pty Ltd v Commissioner of 

Taxation [2007] FCAFC 103, that the 

Commissioner’s decision to apply the 

transfer pricing provisions of the tax 

law was not a reviewable decision. 

This was because the objective criteria 

authorising the making of the decision 

had been satisfied. 

The taxpayer has now been granted 

special leave to appeal the matter to 

the High Court and many taxpayers 

will no doubt await the outcome of that 

appeal with interest. At issue is whether 

the Commissioner’s determination to 

apply the transfer pricing rules where 

the relevant statutory criteria are 

satisfied must be made in accordance 

with administrative law principles, 

including the requirement that the 

determination be made only after 

taking into account all relevant matters 

and not taking into account irrelevant 

matters. An illustration of a taxpayer 

succeeding in administrative law 

litigation can be found in the decision 

in BHP Billiton Direct Reduced Iron Pty 

Ltd v Duffus, Deputy Commissioner of 

Taxation [2007] FCA 1528 which was 

featured in our November 2007 edition 

of TaxTalk. 

Star City appeal 

The Commissioner has appealed to the 

Full Federal Court against the decision 

at first instance of Justice Gordon in 

Star City v Federal Commissioner of 

Taxation [2007] FCA 1701. The decision 

of Justice Gordon was reported in our 

December 2007 edition of TaxTalk. 

Ruling on wash sales 

On 16 January 2008, the 

Commissioner issued Taxation Ruling 

TR 2008/1, which deals with so-called 

“wash sales”. This is the term used 

to describe the sale and purchase 

of the same, or substantially the 

same, asset within a short period 

of time of each other, with the sale 

and purchase cancelling each other 

page 13


out. In TR 2008/1, the Commissioner 

expresses concern with arrangements 

which have the effect of causing a 

disposition to happen which enables 

a taxpayer to incur a loss to offset 

against a gain already derived, or 

expected to be derived, in certain 

circumstances. These circumstances 

are where, owing to the manner, 

substance and timing of the events, 

it may be questioned whether the 

loss making event is mainly to be 

explained by reference to the purpose 

of obtaining a tax benefit from the loss. 

The Ruling includes a number of 

examples which provide guidance 

as to the circumstances in which the 

Commissioner would likely apply the 

general anti-avoidance provisions of 

the tax law to deny the taxpayer the 

benefit of the loss. 

Taxation Ruling TR 2008/1 replaces 

draft Taxation Ruling TR 2007/D7 and 

is to be applied both prospectively 

and retrospectively. 

Use of substantial 

equipment in Australia 


Commissioner issued Taxation Rulings 

TR 2007/10 and TR 2007/11 and 

Tax Determination TD 2007/31, each 

dealing with the tax consequences to 

non-residents of certain arrangements 

involving the use of substantial 

equipment in Australia. 

The Rulings and Determination deal 

with the following: 

• TR 2007/10 deals with the treatment 

of shipping and aircraft leasing 

profits of United States and United 

Kingdom enterprises under the 

deemed ‘substantial equipment’ 

permanent establishment provision 

of the respective double tax treaty 

with Australia 

• TR 2007/11 deals with withholding 

tax and related implications for a 

non-resident head lessor or hirepurchase 

provider of ‘substantial 

equipment’, where the equipment 

is obtained by another non-resident 

entity that subleases, sub-provides 

or leases it for use in Australia, and 

• TD 2007/31 deals with the question 

of whether a non-resident enterprise 

that under a hire-purchase 

agreement hires out substantial 

equipment to another entity that 

uses the equipment in Australia 

is deemed to have a permanent 

establishment in Australia under 

Article 4(3)(b) of the tax treaty 

between Australia and Singapore 

or equivalent provisions in other tax 

treaties entered into by Australia. 

Further information 

If you have any queries about issues raised in this edition or would like to be 

placed on the mailing list for TaxTalk, please contact one of the following: 

TaxTalk 

Adelaide 

Scott Bryant, Partner 

Phone: +61 8 8218 7450 

Fax: +61 8 8218 7812 

scott.a.bryant@au.pwc.com 

Brisbane 

Tom Seymour, Partner 

Phone: + 61 7 3257 8623 

Fax: + 61 7 3031 9312 

tom.seymour@au.pwc.com 

Melbourne 

David Wills, Partner 

Phone: +61 3 8603 3183 

Fax: +61 3 8613 2880 

david.a.wills@au.pwc.com 

Editor 

Rebecca Presta 


Phone: + 61 3 8603 1125 

rebecca.presta@au.pwc.com 

Technical Editor 

Geoff Dunn, Director 

Tax Technical Knowledge Centre 


Phone: +61 2 8266 5220 

geoff.dunn@au.pwc.com 

Perth 

Frank Cooper, Partner 

Phone: +61 8 9238 3332 

Fax: +61 8 9488 8771 

frank.cooper@au.pwc.com 

Sydney 

Ian Farmer, Partner 

Phone: +61 2 8266 2802 

Fax: +61 2 8286 2802 

ian.farmer@au.pwc.com 

Media enquiries 

Nina Anderson 

Phone: +61 3 8603 3573 

Mobile: 0400 033 937 

nina.anderson@au.pwc.com 

© 2008 PricewaterhouseCoopers. PricewaterhouseCoopers refers to the individual member firms 

of the worldwide PricewaterhouseCoopers organisation. All rights reserved.The information in this 

publication is provided for general guidance on matters of interest only. It should not be used as 

a substitute for consultation with professional accounting, tax, legal or other advisers. 

This document is not intended or written by PricewaterhouseCoopers to be used, and cannot be 

used, for the purpose of avoiding tax penalties that may be imposed on the tax payer. 

Before making any decision or taking any action, you should consult with your regular 

PricewaterhouseCoopers’ professional. No warranty is given to the correctness of the information 

contained in this publication and no liability is accepted by the firm for any statement or opinion, 

or for any error or omission. TaxTalk is a registered trademark. Print Post Approved PP255003/01192. 

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