Australia Court Considers U.S. Treaty, Valuation, Compliance

The recent Federal Court decision in Resource Capital Fund IV LP v. Commissioner of Taxation, [2018] FCA 41 (RCF IV), dealt with Australia's right to tax profits of a Cayman Islands limited partnership (LP) on the sale of Australian shares. The case raises several important points for foreign i...

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Bibliographic Details
Published inJournal of International Taxation Vol. 29; no. 5; pp. 25 - 27
Main Authors O'Reilly, Mark, Thomas, Ellen, Morris, Chris, Follone, Ross, Pascoe, Adam, Morton, Magnus, Landsberg, Stuart, Crosland, Vanessa
Format Trade Publication Article
LanguageEnglish
Published Boston Thomson Reuters (Tax & Accounting) Inc 01.05.2018
Subjects
Corporate income tax
Federal court decisions
Foreign investment
General partners
Income taxes
International taxation
Investment policy
Leases
Limited partnerships
Mining
State court decisions
Tax assessments
Tax returns
Tax treaties
Taxation
Valuation
United States > US
Australia
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Summary:The recent Federal Court decision in Resource Capital Fund IV LP v. Commissioner of Taxation, [2018] FCA 41 (RCF IV), dealt with Australia's right to tax profits of a Cayman Islands limited partnership (LP) on the sale of Australian shares. The case raises several important points for foreign investors (particularly private equity investors) in Australian companies, and Australians investing overseas. RCF IV clarifies some difficult international tax issues confronting inbound investment structures (particularly from the US) by stating that US partners can access treaty benefits when investing in Australia through a foreign LP. It also provides some helpful guidance in respect of land valuation. However, the case potentially gives rise to some significant practical hurdles going forward, particularly in relation to determining the source of Australian-related transactions, and ensuring that investors are conscious of all of their tax compliance and tax payment obligations.
ISSN:1049-6378