Australian International Income Taxation book and ebook

The Global Financial Crisis of 2008 left many economies with significant budgetary problems. In the search for revenue, the Organisation for Economic Cooperation and Development (OECD) and the Group of 20 Nations (G20) in 2012 charged the OECD with the ‘Base Erosion and Profit Shifting’ (BEPS) project, examining international tax planning by multinational groups. BEPS has been a major theme in international tax discussion since with the project being opened to non-OECD countries through its ‘inclusive framework’. Progress was rapid with the OECD producing an initial report and an Action Plan in 2013. Subsequently, several reports in OECD countries and in the European Union dealt with issues related to BEPS culminating in the publication of the Final BEPS Reports, the Multilateral Instrument and the 2017 update to the OECD Model Tax Convention.

The BEPS project, however, did not end there and remains a work in progress. The focus is now on what has become known as Pillar I and Pillar II which are concerned with tax issues arising from the digitisation of the economy and raise fundamental jurisdictional questions about the relative taxing rights of residence and source countries.

Although one of the insights of the BEPS project has been recognition of the need for co-ordinated responses by countries to cross-border tax planning strategies many of the recommendations in the BEPS Final Reports can only be implemented by national legislation. Hence, the need for this publication on Australian international income tax law that analyses the current domestic law and tax treaty provisions and takes into account the recommendations in the BEPS Final Reports.

After discussing international tax policy considerations and the historical development of current Australian rules in the introduction, three chapters examine Australian domestic law rules that apply in the absence of a double tax treaty. Australian double tax treaties and their effect on domestic law are then analysed in Chapter 5. The final two chapters discuss Australian international anti-avoidance provisions and administrative aspects of Australian international taxation. This book provides a thorough discussion of current Australian international tax rules and their implications for taxpayers.

Chapter One: Introduction

1. Policy Considerations underpinning Australian rules

2. History of and an introduction to the rules, principles and policies relevant to international income taxation in Australia

3. Outline of current basic Australian rules affecting cross border transactions

Chapter Two: Australia’s Jurisdiction To Tax

1. Policy issues

2. Australia’s jurisdiction to tax – the statutory law

3. Definition of the residence of the taxpayer

4. Source rules

5. Fringe Benefits Tax – international implications

6. Recent developments

7. Tax planning considerations

Chapter Three: Australian Taxation of Inbound Investment Where a Taxation Treaty Does Not Apply

1. Introduction

2. Taxation of passive income

3. Taxation of Capital Gains            

4. Thin Capitalisation Rules

5. Specialised tax regimes

6. Anti-avoidance rules                   

Chapter Four: Australian Taxation of Outbound Investment Where  a Taxation Treaty Does Not Apply

1. Introduction

2. Basic Australian rule in taxing foreign source income of residents

3. Non-Assessable Non -Exempt foreign source income

4. Foreign income tax offset system

5. Reduction in foreign capital gains on non-profit interests in foreign companies – ITAA 1997 Subdivision 768-G

6. Foreign accruals tax regimes

7. Outward thin capitalisation rules

8. Tax policy observations and practice considerations

Chapter Five: International Tax Anti Avoidance

1. The history and development of international tax anti avoidance in Australia

2. Part IVA of the Income Tax Assessment Act 1936

3. The Multinational Anti-Avoidance Law

4. The Diverted Profits Tax

5. Transfer Pricing

6. Hybrid Mismatch provisions

Chapter Six: Tax Treaties

1. Introduction

2. Overview of Australia’s tax treaties

3. Australian tax treaty policy and practice

4. Interpretation of tax treaties

5. Comparing the 2017 OECD Model Convention and Australia’s Tax Treaties

6. Future developments in tax treaties

Chapter Seven: International Tax Administration

1. Taxation of foreign source income received by a resident

2. Taxation of Australian sourced income received by a foreign resident

3. Foreign investment in Australia – compliance requirements