The Australian Taxation Office and the Myer float
18 November 2009
Professor Michael Dirkis comments on the Australian Taxation Office's unprecedented action against TPG over the $2.4 billion Myer float.
The ATO claims TPG owes it over $450 million from the proceeds of the Myer share sale and has hit the firm with an additional $226 million in penalties, alleging tax avoidance.
In an interview for an article in the Weekend Australian, Professor Dirkis says the ATO action brings to a head a long-running battle with overseas investors, which it attempted to end in December 2006 when it closed a number of loopholes in Australian law.
"From 1997 it became very optional for foreign investors in Australia to pay capital gains tax on their profits.
"Under the old rules, if you were not disposing of an Australian asset, you were not liable for CGT.
"The rules under the 2006 revamp have been cast so the authorities can trace through a chain and make a claim on the ultimate owner.
"However, it is still very hard for Australian authorities to reclaim money offshore."
Contact: Greg Sherington
Phone: +61 2 9351 0202