The draft QWBA considers whether a major change in the nature of a contractor’s business activities occurs when a PPP project transitions from the design and construction phase to the operation and maintenance phase, and whether such a change is a “permitted major change” under section IB 3(5)(d). The analysis concludes that while the transition may constitute a major change, it is a permitted one due to the close economic, legal, and financial connection between the two phases. This interpretation allows contractors to carry forward tax losses under the BCT, provided other requirements are met and avoidance provisions do not apply.

CA ANZ commends Inland Revenue for producing a well-written draft QWBA. The document clearly outlines the legislative framework, provides a practical example through a highway PPP scenario, and offers a robust explanation of the factors relevant to determining whether a major change has occurred. Overall, CA ANZ supports the publication of this QWBA in its current form.