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Tax compliance in life sciences: The new order

Tax compliance in life sciences: The new order

Watch a short snapshot video from KPMG Director Kelly Chong, where she provides an overview of recent changes impacting tax compliance obligations, as well as her full presentation in the recording of our Life Sciences Tax Update webinar held on 28 August 2019.

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Kelly Chong

Director, Tax Advisory Services

KPMG Australia

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Also on home.kpmg

There are many forces currently shaping the Life Sciences industry – patient consumerism, tight margins, and increasing regulation. We are likewise witnessing a period of immense change to how tax is done in Australia and overseas.

Examples of recent changes

  • A foreign incorporated company may be an Australian tax resident if central management and control is in Australia, regardless of whether trading occurs in Australia.
  • Tightening of the rules around identifying a taxable presence (permanent establishment) of a foreign enterprise in Australia (or vice versa).
  • The Australian Taxation Office (ATO) is reviewing related party international arrangements which are considered to mischaracterise intangible assets – the concern being whether there is appropriate arm’s length compensation under the arrangement, and whether part of the payment consists of a royalty that should be subject to withholding tax.
  • For income years ending on or after 30 June 2019, the ATO now requires taxpayers to self-assess whether they are required to file the Reportable Tax Positions Schedule (RTPS).

Key actions that taxpayers need to take now

  1. Ensure compliance processes are in place to assess and manage tax compliance obligations.
  2. Establish clear communication with the business and offshore counterparts to enable identification of potential issues.
  3. Undertake proactive and continuous demonstration of due diligence and supporting documentation.

Presentation slides

View a copy of the slide presentation from the webinar.

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