As the lead for the Private Capital Program, I want to share some important information with public and multinational businesses involved in private capital markets, about our focus areas and compliance approach.
We commenced our Private Capital Program in recognition of the continued growth and sophistication of private capital investments in Australia over the past decade. This growth has increased the volume, complexity and sophistication of tax issues arising across all areas of our program:
- private equity
- infrastructure and business fragmentation
- foreign funds
- collective investment vehicles (CIVs).
We're now examining isolated transactions as well as tax risks, and the participants involved in them, across the entire investment lifecycle: preacquisition, acquisition, holding period, pre-disposal and disposal.
This approach enables us to identify issues early, which reduces the likelihood of disruption at the disposal stage, when transaction timeframes are often compressed and capital may be leaving Australia. When capital is at risk of leaving Australia untaxed, we may seek to enter security arrangements to protect Australian tax revenue.
Our engagements across private equity, infrastructure and foreign fund investments increasingly involve:
- holding-period reviews
- early engagement on acquisitions and disposals
- firm-level reviews for private capital investment managers with multiple Australian investments.
Our focus for the next 12 months is:
- disposal and asset dissipation risks
- rolling out the holding-period and firm reviews from the private equity work to the other areas in the program
- considering whether broader market guidance is needed, as we identify issues.
I encourage you to read our new web content to:
- understand the behaviours and risks that attract our attention across the investment lifecycle
- access helpful links to our public advice and guidance products that explain our approach to collective investment vehicles, foreign funds, infrastructure, private equity and security arrangements
- understand how we align our work with the public and multinational business three-tier model – this model helps us understand the tax system in operation and guide what areas we focus on for our compliance work.
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