Published on 01 Jun 08
by "THE TAX SPECIALIST" JOURNAL ARTICLE
This paper considers draft Taxation Ruling TR 2007/D10 which indicates the ATO’s current view of the CGT implications for vendors and purchasers in earnouts and reverse earnouts. It compares the current ATO approach with that taken in previous rulings, and also considers and compares the tax treatment of such earnouts in comparable overseas jurisdictions. It concludes that the current approach is not always defensible by reference to statute or case law, and that it leaves practitioners and their clients in a state of considerable uncertainty. The paper suggests potential solutions to these problems, and argues that the final ruling will have to adopt a significantly different position in order to remove this uncertainty.
Chris is a Professor, School of Taxation & Business Law, UNSW Australia, Extraordinary Professor, Department of Taxation, University of Pretoria, and Senior Research Fellow, Tax Law and Policy Research Group, Monash University.
- Current at
01 October 2016