Chartered Accountants ANZ has lodged a submission on the exposure draft legislation (ED) and explanatory materials (EM) to implement the measure to deny deductions for payments relating to intangible payments relating to intangible assets connected with low or no tax jurisdictions.

Our key concerns are:

• Given there are various integrity regimes that capture the concerns that this measure is targeting, we question the necessity for another provision to target payments in respect of intangible assets.
• The proposed provisions are very broad in scope which adds significant uncertainty when dealing with payments relating to intangible assets.
• We query why taxes which apply to the income in the recipient entity other than just the normal corporate tax (especially any Qualifying Domestic Minimum Taxes which are naturally designed to ensure that such income is subject to a minimum 15% tax rate in the recipient country) are not being taken into account in an Australian legislative provision aimed at ensuring that such income is indeed subject to a 15% minimum tax burden.