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How tax can help infrastructure investment

Published on 01 Sep 14 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

New methods of financing infrastructure projects, including an emphasis on public–private partnerships (PPPs) as well as targeted tax reforms, are critical in ensuring future investment in Australian infrastructure. One of the private sector concerns with PPPs is the cost of bidding for projects. Complex taxation issues associated with PPPs, including the treatment of leases, deductibility of interest and depreciation of fixed assets, contribute to the cost burden. However, there are ways to resolve these issues within the current policy framework.

This article examines a number of possible tax-related reform opportunities designed to promote investment in Australian infrastructure. These possibilities include a code for the taxation of government-funded PPP infrastructure projects, greater promotion of foreign investment in Australian infrastructure projects through tax reform, flow-through investment vehicles, investment in infrastructure assets by superannuation, reforming the thin capitalisation rules, and aligning the rules for unit trusts and companies in various areas.

Author profile:

Mike Davidson
Mike is a Tax Partner with PricewaterhouseCoopers.
Current at 1 September 2014

 
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