Foreign Resident Capital Gains Withholding – Three Years On – Where Are We Now?

Three years after the introduction of the Foreign Resident
Capital Gains Withholding rules there have been some evolution in the practice
and some surprising instances where the rules can apply.
We spoke with David Earl and Lynn Koh ahead of their presentation
at the upcoming VIC
7th Annual Tax Forum
on 17-18 October 2019.
The good and the not-so-good

“This session is aimed at briefly revisiting the
introduction of the rules, an outline of what they were trying to achieve and
the practices that have since developed in the market – both good and not so
good” says David.
“We’ll try to help attendees understand when the foreign
resident capital gains withholding rules apply and what potential options might
be for dealing with the rules” adds Lynn.
Attendees will learn what to look out for in different
transaction scenarios, some practical steps,
as well as what the ATO’s current views and expectations are, and the risks to
be managed from these rules.
 David says, “The
ATO have amazing resources and guidance sheets available, so whilst there are
few ‘blind spots’ for the uninitiated, there are a number of surprising
obligations and expectations that still remain.
“Especially on tax advisors in order to navigate
transactions or restructures without having a purchase unwittingly needing to
withhold 12.5% of purchase price.”.
“Foreign Resident Capital Gains Withholding can apply to
internal group restructures even where the relevant Australian business may be
far removed from the transaction taking place” adds Lynn.
David is a Partner within PwC Melbourne’s corporate tax
practice where has been practising tax since joining PwC as a graduate in the
year 2000. He is a member of The Tax Institute’s National Council and Victorian
State Council. He mainly advises inbound multinational groups with respect to
their investment in Australia, and predominately focusses on M&A tax and
International Tax matters. 
During his time with PwC, David has also spent time
on secondment to PwC Netherlands, where he provided a mix of Dutch, Australian
and European tax advice to a broad range of international clients. Outside of
tax, he enjoys family time, cycling up mountains in summer and skiing down them
in winter.
Lynn is a Director within PwC’s Global Tax practice in
Melbourne and has over 12 years professional experience as a corporate tax
advisor. With a keen interest in cross-border tax issues, her focus is on
helping multinational business invest and grow in Australia, and Australian
businesses expand offshore. Lynn’s core expertise is in providing international
tax, structuring and M&A tax advice to Australian businesses operating
offshore and foreign groups investing into Australia. Apart from navigating the
dynamic international tax landscape in Australia, she enjoys spending time with
her two young children.
The Vic 7th Annual Tax Forum is the leading taxation
conference in Victoria. With three dedicated streams, corporate, SME and hot
topics, over 45 expert presenters and 34 sessions to choose from, there is
something for everyone. Find out more about David and Lynn’s session, and the
rest of the program on
our website


See all

Follow Us