Australian oil and gas: maximising inbound investments—tax risks and opportunities

Abstract

The ability for Australia to attract and retain foreign capital is crucial to the continued expansion and long-term development and sustainability of Australia’s oil and gas industry.

A well-known and accepted competitive advantage, which facilitates inbound investment into the Australian oil and gas industry, is the stability of Australia’s tax and regulatory system. Having said this, inbound investors are faced with numerous challenges in seeking to navigate and understand Australian tax issues associated with not only ensuring the successful completion of a transaction but to also manage their ongoing after-tax return on investment.

These investors are exposed to Australia’s complex international tax landscape, given the level of cross-border investment, financing, profit repatriation, transfer pricing and exit/sell down issues.

The key is for inbound investors to understand, monitor and pro-actively manage their international tax affairs as efficiently and effectively as possible.

This extended abstract is targeted on assisting inbound investors to understand key considerations associated with investment ownership in the Australian oil and gas industry, and to assist those investors in making strategic investment decisions and to better understand tax risks and opportunities. The topics covered will include:

1. Key tax drivers and considerations associated with executing transactions successfully.

2. Structuring inbound oil and gas investments into Australia.

3. Investment funding and profit repatriation strategies.

4. Transfer pricing and related company transactions.

5. Exit and sell down strategies.