Companies

Dec 18, 2009

ATO decision to tax TPG on Myer is on the money

Despite the claims of self-interested private equiteers and their hired help, the ATO’s decision to tax TPG’s billion-dollar Myer windfall was the right one.

Adam Schwab — Business director and commentator

Adam Schwab

Business director and commentator

The chaos surrounding the Australian Tax Office’s desperate bid to tax the profits earned by Texas Pacific Group (TPG)  after its successful float of Myer continues. Earlier this week, the tax office released a series of draft rulings specifying that gains made by private equity firms are taxable as ordinary income and that it would apply the general anti-avoidance provisions to prevent “treaty shopping”. The ATO is endeavoring to prevent companies from avoiding the intent of international tax agreements by setting up complicated offshore holding company structures in tax havens such as the Cayman Islands or Luxembourg.

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