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Taxation

Having taxation matters dealt with by a trustworthy and knowledgeable team that understands the inner workings of your business allows you to focus on achieving results.

Tax Disputes

GST Groups and ITSFAs

Tax Consolidation& TSFAs

 

Led by industry recognised tax professionals and technical tax commentators, the Sladen Legal taxation team provides insightful and understandable commercial, tax advisory solutions to addressing complex and evolving State, Federal and international revenue laws.

We represent high wealth individuals, businesses on the BRW 200 Wealth List and BRW Fastest 100 List, unlisted public companies, private companies, closely held trusts and leading not for profit entities.

We work closely with our clients to ensure that they understand how ever-changing revenue laws will impact their interests and how to best meet their commercial and tax obligations. We provide advice on specific taxes and revenue laws and assist clients in efficiently managing tax disputes.

In addition to working directly with our clients we also work with many of Australia’s leading accounting firms and professional services advisers, providing them with specialised taxation advice and guidance to ensure that they are achieving the best outcomes for their clients.

The knowledge and technical expertise of our taxation team is widely recognised and they are regularly invited to present at industry events, forums and conferences. They participate in the consultative committees of the Australian Taxation Office and Treasury, which are responsible for the creation and interpretation of tax law.

We provide advice in the following areas of taxation:

  • Income tax
  • Capital Gains Tax
  • Goods and Services Tax
  • Employment Taxes including Fringe Benefits Tax

State Taxes such as Payroll and Stamp Duty

  • International taxation arrangements
  • Property taxes
  • Superannuation taxes

Contact

tax@sladen.com.au

+61 3 9611 0193

Taxation News

Tax Disputes

We are fierce advocates for private enterprise and apply our superior technical and procedural knowledge to strategically manage and resolve State and Federal tax office investigations, negotiations and litigation.

Our tax disputes team are experts in their field and are widely recognised for their commitment to developing innovative resolutions to tax disputes. They offer a wealth of experience and knowledge in substantive revenue laws, policies and procedures, taxation administrative law, judicial administrative law and tribunal and court rules.

In all tax disputes we adopt a collaborative approach to ensure that we remain dedicated to managing risk and minimising disruption to your business throughout conduct and life of the tax dispute.

We provide tax dispute advice and services in the following areas:

  • Questionnaire responses and audit activities
  • Informal and formal information and document exchange
  • Objections to taxation decisions
  • Penalty and interest remission applications
  • Settlement negotiations
  • Debt enforcement management
  • Freedom of Information applications
  • Administrative reviews and court appeals and litigation
  • Tax agent disciplinary activities

Tax Dispute News

Tax Consolidation and TSFAs

Sladen Legal has significant experience in guiding clients through every stage of the tax consolidation process.

Whilst tax consolidation can provide significant opportunities for wholly-owned groups, especially in the current economic climate, the tax consolidation legislation is extremely complex and evolving and requires careful application.

Our tax consolidation lawyers have previous experience in large accounting firms and understand the technical and accounting complexities associated with the consolidation process. This gives us the unique ability to provide our clients and their advisors with strategic and practical advice as well as prepare all requisite documentation.

We offer discounted rates to accounting and professional services firms that exclusively engage us to prepare tax sharing and funding agreements and other related documentation for their clients.

Our clients include large and mid-tier accounting and professional services firms, public companies, private corporate groups and their advisers.

Why consolidate?

Tax consolidation can provide significant tax efficiencies and savings when restructuring and administering corporate groups.

To consolidate, a group must consist of an Australian-resident holding (‘head’) company and at least one wholly-owned resident subsidiary (which may be a company, trust or partnership) (specific rules apply as to eligibility requirements for membership of a consolidated group).

A consolidated group is treated as a single entity for income tax purposes and the head company is generally liable for the income tax debts of the group. The head company would maintain a single franking account and accumulate any tax losses of the group.

The tax consolidation process requires careful planning, and the assistance and guidance of experienced professionals can be invaluable:

  •  the ability to continue to use the prior year tax losses of the members to offset against the consolidated group’s taxable income can provide cash-flow advantages to the group, provided that various tax loss transfer and utilisation rules are satisfied;
     
  • as intra-group transactions are disregarded for income tax purposes, tax consolidation can facilitate tax effective means for undertaking corporate restructures. Such opportunities must however be carefully reviewed in the context of the anti-avoidance provisions in the income tax legislation. Further, any stamp duty consequences from the transfer of business assets would depend on the nature and location of each asset and must also be carefully considered;
     
  • when a consolidated group is formed or members join an existing group, the tax cost of each subsidiary’s assets is reset at the relevant tax cost setting amount (TCSA) to recognise the cost to the head company of those assets. The TCSA of a subsidiary’s assets is based on a share of the allocable cost amount (Entry ACA) of each entity (being the cost of the head company’s interest in the subsidiary, adjusted for liabilities, undistributed profits, distributions and losses of each entity and tax deductions to which the head company would become entitled). ACA calculations are complex and require careful consideration of a number of technical concepts. With existing entities, we recommend that the tax impact of resetting the cost of assets be carefully reviewed prior to consolidating;
     
  • when an a subsidiary leaves a consolidated group, the head company is required to calculate the TCSA of its interest in that subsidiary by means of an Exit ACA calculation and allocate the ACA to its shares in that subsidiary; and
     
  • it is crucial to have the appropriate documentation in place to avoid unintended and unnecessary tax consequences. For example, if the head company fails to pay a group income tax liability by the due date, subsidiary members are jointly and severally liable for that liability. This situation can be avoided by group members executing a valid Tax Sharing Agreement which reasonably allocates the liability amongst the parties. A group member would then only be liable for their portion of the group debt, calculated in accordance with the terms of the Agreement. A Tax Sharing Agreement should also provide for the entry and exit of members to and from the consolidated group so as to ensure that:
     
    • when members join a consolidated group, the head company’s and the new member’s obligations are appropriately documented; and
       
    • when a member leaves the consolidated group, it obtains a ‘clear exit’ from income tax liabilities that are not due and payable at the time of the exit - this is especially reassuring for the third party purchaser of the shares in a subsidiary member of a consolidated group.

A Tax Funding Agreement can also provide an internal funding arrangement to ensure that the head company can fund the consolidated group's tax liability payments by members funding their proportion of the liability.

How we can help you

We can assist with preparing documentation for, and advising on:

  1. forming a tax consolidated group, including:
    a.     eligibility issues;
    b.     transferring prior year income tax losses from a subsidiary to the head company;
    c.     Entry ACA calculations;
    d.     Australian Taxation Office notification requirements; and
    e.     Preparing a comprehensive report for all members of the group.
  2. new members joining an existing group;
  3. members leaving an existing group;
  4. Exit ACA calculations;
  5. intra-group transactions;
  6. stamp duty consequences associated with intra-group transactions;
  7. restructures involving new and existing consolidated groups;
  8. Tax Sharing and Tax Funding Agreements; and
  9. varying an existing Tax Sharing Agreement and/or a Tax Funding Agreement.

Indirect Tax Sharing and Funding Agreements for GST Groups

Sladen Legal can assist GST groups with Indirect Tax Sharing and Funding Agreements.

GST Groups

The GST legislation provides that two or more entities can form a GST group if each satisfies the membership requirements, each agrees in writing to the formation of the group, and the entity nominated as the “representative member”, is an Australian resident, and notifies the Commissioner, in the approved form, of the formation of the group.

A GST group is generally treated as a single entity for the purposes of certain indirect tax laws (GST, wine tax, fuel tax, luxury car tax). Intra-group transactions between the members of the GST group are ignored for the purposes of the indirect tax laws. The representative member submits a GST return, and is liable for the group’s indirect tax law liabilities and entitled to the associated tax credits.

Indirect Tax Sharing and Funding Agreements

There are multiple complex taxation laws governing GST groups. Therefore, it is crucial to have the appropriate documentation in place to clearly define (and be able to determine) each member’s rights and obligations, and thereby avoid any adverse tax consequences.

For example, if the representative member fails to pay a group indirect tax liability by the due date, group members are jointly and severally liable for that liability. This situation can be avoided by group members executing a valid Indirect Tax Sharing Agreement which reasonably allocates the liability amongst the parties. A group member would then only be liable for their “contribution amount” (being that member’s portion of the group debt, reasonably allocated in accordance with the terms of the Agreement).

An Indirect Tax Sharing Agreement should also provide for the entry and exit of members to and from the GST group so as to ensure that:

  • when a member joins the group, the new member’s obligations are appropriately documented; and
  • when a member leaves the group, it obtains a ‘clear exit’ from indirect tax liabilities that are not due and payable at the time of the exit - this is especially reassuring for a third party purchaser of a former GST group member.

An Indirect Tax Funding Agreement can also provide an internal funding arrangement to ensure that the representative member can fund the GST group's tax liability payments by members funding their proportion of the group’s liability.

How we can help you

We can assist with preparing documentation for, and advising on:

  1. forming a GST group, including:
    ·         eligibility issues; and
    ·         Australian Taxation Office notification requirements.
  2. new members joining an existing group;
  3. members leaving an existing group;
  4. intra-group transactions;
  5. Indirect Tax Sharing and Tax Funding Agreements; and
  6. varying an existing Indirect Tax Sharing Agreement and/or a Tax Funding Agreement.

Our GST group clients include large and mid-tier accounting and professional services firms and private groups.

We offer discounted rates to accounting and professional services firms that exclusively engage us to prepare Indirect Tax sharing and Funding Agreements and other related documentation for their clients.

Taxation Lawyers