The Australian Income Tax Assessment Act, 19S6 (the Act) has recently been amended by the inclusion of a full foreign tax credit system (FTCS) to replace the partial and exempt system previously existing. In view of this change, and the increase in Australian participation in Papua New Guinea (PNG), petroleum exploration re-consideration of conventional corporate structuring into PNG is warranted.In considering the form of a tax effective structuring, it will be necessary to consider matters such as the following:obtaining an appropriate mix of debt and equity with the debt provided in a form so that the service fee will not qualify as interest for FTCS purposes;structuring the PNG operations through a subsidiary incorporated out of Australia, e.g. PNG;ensuring that the shareholding in the company is appropriate to enable a full credit for 'underlying taxes'; andobtain any 'tax sparing relief available due to the PNG treatment of interest and dividends.These aspects and the many other relevant planning points require consideration of complex legislation. In the absence of direct legal precedent, proper and full consideration is warranted if all intended financial benefits are to be obtained.
Exploration on Teaching Management Reform in Applied Undergraduate Colleges under the Full Credit System
