Scott Farrell, Ed Tong, and Harsh Sinha, Corporate Tax Specialists, discusses current developments in infrastructure investments and stapled structures.
There has been considerable discussion within the infrastructure sector following the ATO’s release of the Taxpayer Alert 2017/1 and the Privatisation and Infrastructure – Australian Federal Tax Framework (January 2017 Draft).
KPMG hosted a number of forums with representatives from the ATO, Treasury and industry to facilitate the sharing of perspectives regarding infrastructure investments, with the key themes emerging:
It is clear that the ATO needs to further articulate its views on the use of stapled structures.
One could argue that this will result in the death of stapled structures in the infrastructure and renewable energy industry, irrespective of whether such structures are owned by Australian or non-Australian investors. This, however, would be an overreaction based on the limited guidance. In our view, the continued use of stapled structures in the infrastructure sector will be heavily dependent on the facts and circumstances of the specific investment.
It is critical to review existing positions adopted in current investments, including:
The Taxpayer Alert and Framework are currently subject to a consultation period with the ATO which concludes on 28 April 2017, for which KPMG is preparing a submission.
Read more for a summary of the key messages arising from these forums.