International Tax Newsletter - Spring 2011 - Australia - Taxation of Private Equity Investments
The question of whether a gain made by a nonresident from the disposal of equity investments in an Australian entity is on capital account or revenue account is currently being tested by the Australian Taxation Office (ATO). Generally, Australia does not tax nonresidents on capital gains unless the asset is "taxable Australian property" (generally this is limited to direct and indirect real estate and resource investments).
However, the ATO has issued a tax determination that indicates the disposal of Australian equity investments in Australian companies will be taxed as ordinary income where the investment was made with the intention of building up the value of the investment and divesting it within a short to medium timeframe. The Tax Office says capital treatment only applies to the disposal of Australian equity interests where the investment is made and held on a longer term basis where the gain made on the ultimate disposal of the investment was not the main purpose of the investment.
International Tax Newsletter - Spring 2011
- Editor's Note
- AUSTRALIA - Taxation of Private Equity Investments
- CANADA - U.S. LLC Entitled to Benefits even under prior Treaty
- CHINA - Corporate Income Tax
- INDIA - Recent International Tax Decisions
- ITALY - New Transfer Pricing Rules
- NETHERLANDS - Selected International Tax Developments
- SINGAPORE - New DTAs and Swap Decision
- SOUTH AFRICA - International Tax Developments
- UNITED KINGDOM - DTAs and International Tax Proposals
- UNITED STATES - Key International Tax Developments