The acquisition or divestment of an entity (or a group of entities) can potentially give rise to income tax issues spanning almost the entire gambit of the income tax legislation. This paper provides an overview of a number of current taxation issues in M&A, with a focus on:
acquisition structuring issues (i.e. debt / equity mix, and other structuring considerations)
some recently noted acquisition diligence issues (such as availability of clear exits, RTFI, and employment taxes)
transaction documentation (including a discussion of industry best practice in relation to taxation warranties and indemnities).
Tax risk and corporate governance: The ATO's growing interest in taxpayers' self risk management
In 2010, the ATO announced that it would be placing increasing importance on taxpayers’ self-management and mitigation of their tax risks. This is otherwise known as good Tax Corporate Governance (TCG). This paper covers how to meet the ATO’s expectations for TCG and what to expect if the ATO reviews your risk management systems, including:
the ATO’s requirement for documented policies and procedures
creating or improving a TCG policy document – what does it look like and what would it include?
how to implement a robust TCG framework in your organisation
commercial and operational benefits an entity realises on implementation of a good tax risk management system
responsibilities for and interests in TCG for the Tax Manager, Tax Function and the Board
There is a long and onerous list of obstacles facing companies looking to answer this most fundamental of questions under the Australian imputation system. The last 12 months has seen some significant developments which impact on the answer. This paper looks at where we currently stand in relation to:
the requirement for “profit” and the ATO’s views in Taxation Ruling TR2012/5
treasury’s on–going review of the Corporations Law test for the payment of dividends
the Consolidated Media decision and the dividend component of a share buy–back
the Mills decision and the application of section 177EA
the many class rulings on pre–sale dividends and the “45 day” rule.