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

TaxTalk – Electronic Bulletin of Australian Tax Developments
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
On 19 December 2007, the
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
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TaxTalk
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Scott Bryant, Partner
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david.a.wills@au.pwc.com
Editor
Rebecca Presta
PricewaterhouseCoopers Tax
Phone: + 61 3 8603 1125
rebecca.presta@au.pwc.com
Technical Editor
Geoff Dunn, Director
Tax Technical Knowledge Centre
PricewaterhouseCoopers Tax
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geoff.dunn@au.pwc.com
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