Non-resident tax issues - the 2018 SA Private Business Day

The operating environment for private companies is increasingly competitive and complex, and for those looking to expand their operations overseas, particularly fraught.

One of many important considerations is how the Australian taxation system will apply to income generated via an off-shore investment vehicle, such as a non-resident trust entity. What’s more, complying with the rules around transfer pricing can be onerous, despite efforts by the ATO to simplify record keeping.

At July’s SA Private Business Day in Adelaide, Talia Begley, ATI, looks at some of the issues in her session ‘Non-resident tax’. She tells us about some of the challenges facing businesses and their advisers in this post. 

“Expanding a business beyond Australian shores is complex. Transfer trust rules and transfer pricing are both highly technical aspects of the taxation law matrix – either subject could easily fill an entire day!  As such, I will really be aiming to boil them down to some key practical takeaways. I will be looking at two of the complex taxation issues that face SMEs looking to expand their operations offshore – in particular expansion via a foreign resident trust and the impact of the transferor trust provisions, and application of the simplified transfer pricing record keeping options by SMEs.”

The first part of Talia’s session will provide an overview of when the transferor trust provisions will apply, looking at carve outs and exemptions and the calculation of attributable income, as well as the interaction with other taxing provisions.

“In regard to the transfer trust rules, I will cover the core considerations of trust residency, the attributable taxpayer, listed and non-listed countries and attributable income.  But in the end, we will ask, ‘in what circumstances would you recommend your client expand via a non-resident trust estate’?”

This session will then touch on other important traps and tax strategies for SMEs expanding overseas, before looking at transfer pricing and the simplified transfer pricing record keeping options.

“Complying with transfer pricing rules in the current climate is a daunting and onerous task for any multinational, but particularly so for SMEs who may be only considering expanding operations overseas. Any ‘simplification’ on the tax sides of things is useful, but taxpayers who can fit within one of the ATO’s eight transfer pricing safe harbours still need to keep their eye on the fact this does not relieve them of the substantive transfer pricing obligations – that is, their international dealings must still reflect arms’ length terms.”

Talia Begley, ATI
“I’ll be looking at what’s involved with the eight simplified safe harbour options and the very specific criteria that go with them, and what it means for taxpayers who are eligible.”

Talia is a commercial practitioner at JL Lawyers with a taxation law focus. Prior to joining JL Lawyers, she was a Senior Associate in the Corporate Advisory and Tax Team at Gadens Lawyers, Melbourne. With over 12 years’ experience advising commercial, property and not for profit clients in connection with corporate governance, structures and restructures and acquisitions and divestments, Talia’s corporate practice is supported by her expertise in advising on taxation matters in connection with stamp duty, land tax, GST, income tax and small business tax issues in particular. 

“Now that I’m back in my home town of Adelaide, I love working closely with our private SME clients and their accountants at all stages of their business development – from start-up structuring to succession planning and sale/exit strategies. And when I’m not doing that, I’m spending time with my two young daughters. Otherwise I am usually at the (ballet) barre or absorbed in a podcast!”

Other sessions at the 2018 SA Private Business Day, look at the issues faced by a growing business, maximising the use of global tax rates, issues with inter-generational wealth transfer and transitions, re-organising a privately held business into a company, and more.

View the full program on our website, and join us Adelaide Convention Centre on Friday, 27 July.


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