The discussions in Australia seem to be moving away from tax reform. The Treasurer in a speech yesterday emphasised the need for restraint on public expenditures.
At this time, goods and services tax (GST) reform has been taken off the table. There has been no action on corporate taxes. It is believed that a long-term plan of company tax reductions is needed.
Mergers and acquisitions outlook: Also in Australia, there appears to be increasing anxiety over the use of complex multinational structures, such as hybrids, to facilitate global investment. Companies have been observed to be wary, given likely tax reforms that could unfold both in Australia and elsewhere as a result of the Organisation for Economic Co-operation and Development's (OECD’s) base erosion and profit shifting (BEPS) recommendations.
Concern over the growing differential in the Australian corporate tax rate compared to the majority of the developed world/OECD countries (with United States being an obvious exception) is also evident. Yet, Australia’s domestic tax reform process seems currently in a state of uncertainty.
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