If you are an Australian with income or operations abroad, or an overseas entity with income or operations in Australia, you will be confronted by an array of international tax issues in addition to your local tax obligations. Enslin and Associates provide the full spectrum of tax services for our corporate and individual international tax clients.

Contact us for advice on:

Structuring international transactions, operations and investments;

Maximising foreign tax credits

Advising on withholding tax

Cross border movement of business owners, executives and retirees.

Structuring International Transactions, Operations, and Investments

If you are planning a cross-border transaction, operation, or investment, into or from Australia, you may have to deal with a daunting array of Australian and foreign tax rules. The structure you choose will have both immediate and long-term tax consequences, some of which are immediate and obvious and others which are indirect and may only arise some time in the future. Your choice of entities, their location and management structure can be critical to your success and directly affect your bottom line.

At Enslin and Associates, we work with you, your accoutant and legal advisor on to determine the tax consequences of international transactions, operations, and investments.  We advise taxpayers on tax consequences of cross-border investments, application of tax treaties, utilising foreign tax credits, appropriate entities and timing considerations. We also advise companies with established international operations on the tax aspects of cross-border reorganizations, as well as the year-by-year management of international tax exposures.

Our Services

If you are planning an international transaction, expansion offshore or an acquisition or disposal Enslin and Associates can:

• Advise on the tax implications of various structures for cross border operations
• Advise on choice of entity and jurisdiction 
• Prepare corporate or trust or partnership documents
• Review your entitlement to foreign tax credits 
• Obtain advance rulings to ensure approval by relevant tax authorities
• Aid with restructuring as business considerations or foreign tax rules change
• Work to ensure that acquisitions, dispositions, and expansions are achieved in the most tax-efficient manner. 

Maximizing/Substantiating Foreign Tax Credits

Australian taxpayers operating abroad and foreign taxpayers with Australian operations who are concerned about avoiding double taxation and seek to minimize their worldwide tax liability must be able to interpret and apply the multiple local and foreign tax rules which could apply to their operations.

In relation to foreign tax credits it is necessary to determine which foreign taxes qualify as foreign tax credits in Australia, the entity entitled to the credit, and the mechanics of calculating and applying the credit. Despite the self assessment system Australian taxpayers must also be prepared to substantiate foreign tax payments.

At Enslin and Associates we assist our clients to deal with foreign tax credit qualification and substantiation issues. We have helped many taxpayers, and can help you, to structure operations to make the most of the foreign tax credit rules on a prospective basis, or to defend your entitlement to foreign tax credits previously claimed.

Our Services

To make sure you get the most out of the foreign tax credit rules, Enslin and Associates can:

• Evaluate which taxpayer, and which foreign taxes, will qualify for foreign tax credits in Australia  
• Guide you through the foreign tax credit categorization and calculation rules
• Devise appropriate strategies to maximize your credits and to access excess credits
• Advise you of the type of substantiation issues likely to arise
• Defend your entitlement to claimed foreign tax credits at all stages of proceedings
• Where necessary seek Competent Authority assistance to support the creditability of a foreign tax and your entitlement to the credit

Advising on Withholding Issues

If you are a foreign corporation or individual investing in Australia, or an Australian entity making payments to a foreign person, Australia’s withholding tax rules may apply to you. Where applicable the withholding tax rules must be considered in conjunction with tax treaty provisions and with various anti-avoidance rules.

Recent international tax reform initiatives allow appropriately structured entities a withholding tax- free flow-through of foreign sourced income to foreign shareholders, making Australia a conduit country with similar advantages to those traditionally offered by a low tax jurisdiction.

If you are a foreign corporation or individual investing in Australia, we can help you understand the rules, structure your investments to eliminate or minimize withholding tax, and satisfy documentation requirements.

If you are an Australian entity with a withholding obligation we can help you plan for and comply with your withholding obligations and avoid exposure to withholding liability.

Our Services:

• Analyze how the withholding tax rules apply to your facts.
• Structure your investments so as to eliminate or minimize withholding tax.
• Analyze how treaties impact your withholding obligations
• Determine whether and how the conduit rules affect your withholding obligations.
• Ensure that you comply with relevant documentation requirements.

Interpreting and applying Australia’s double tax treaties

If you have offshore operations you may be able to benefit from treaty provisions designed to avoid double taxation. Australia has a large and developing double tax treaty network with over 40 countries. Some important treaties including those with the UK and USA have recently been substantially re-negotiated and revised, with new concessions for both treaty partners. These revisions have also clarified Australia’s right to impose capital gains tax on certain disposals. 

Interpreting and applying these treaties can be a complex exercise as notwithstanding some effort to conform to the OECD model, Australia’s double tax treaties differ from each other in important, often subtle, respects. And even seemingly simple questions common to all treaties -- such as what is a permanent establishment - can give rise to contentious and potentially costly disagreements with the tax authorities not only of Australia but also the other treaty partner.

The Australian Taxation Office has also published several public rulings on the manner in which it intends to interpret controversial treaty provisions, such as how it intends to apply capital gains tax to transactions involving countries with so-called pre-CGT treaties. These views may need to be taken into account in any planning which involves a person or entity in a treaty country.

Australia’s double tax treaty network plays an important part in planning for and structuring offshore operations.   Enslin and Associates advises clients on the substantive tax issues arising from dealings in or income arising from treaty countries. Low tax jurisdictions generally do not have treaties with Australia and it is often necessary to compare the relative advantages and disadvantages of offshore structures in treaty jurisdictions compared with low tax jurisdictions. 

Our Services

If you are operating in a foreign jurisdiction within the Australian tax treaty network, Enslin and Associates can help:

• Interpreting residence issues and taxing rights to income streams;
• Using or avoiding permanent establishments
• Advise on treaty interpretation and the applicability of treaty provisions to your transaction
• Ensure that you satisfy any filing or information reporting requirements necessary to take advantage of treaty benefits
• Invoke the Competent Authority process under a treaty
• Make your concerns or the concerns of your industry known to the government officials who are negotiating or renegotiating a particular treaty

Cross border movement of senior executives, retirees and employees

If you are an executive who is being sent overseas by your company or you intend to independently seek employment in another jurisdiction, you need to consider the tax implications of your move. If you are coming to Australia for work, business or to retire you may need assistance to plan your affairs to avoid unnecessary tax liabilities. Persons entering and leaving Australia need to be aware of the Australian tax rules affecting them and the interaction of these rules with the jurisdiction to which they are going, or from which they are coming.

Australia taxes residents on their world wide income – many people are under the impression that tax residency only commences if they are present in Australia for more than 183 days in a tax year – however this statutory rule is secondary to the “ordinary residence” test and one can become tax resident in Australia on arrival or in a very short time if you become ordinarily resident here. However, residency can also be planned and timed to take advantage of concessions and defer tax liability.

A range of tax concessions were introduced in 2006 for persons holding temporary residence visas – tax planning for these individuals will have a different emphasis and may give rise to significant opportunities during the period of temporary residence.

If you are an Australian resident it can be difficult to become a non-resident for tax purposes. Domestic tax laws of Australia and the country of origin or destination need to be applied together with any applicable tax treaty designed to reduce double taxation. Assets located or income sourced in third countries may also need to be considered.

Our services

At Enslin and Associates we analyse your circumstances (often in co-operation with your overseas advisors) and work out the best way to plan for your tax liabilities and ensure you enjoy the advantages of double tax relief under any relevant treaty. Timing of your move, the sequence of events and choice of entity in restructuring your interests can be crucial, so the earlier you start the planning process, the more likely your move will take place with the minimum adverse tax consequences.

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