quote:Originally posted by Mick100

Question

Where does an ASX listed company with operations overseas (outside australia) fit into the scheme of things with regards to cap gains tax.
Firstly the new tax regime is NOT a capital gains tax. It is a Wealth tax In Lieu of a Dividend and Capital gain tax Above a Threshold. That makes it something entirely different, a 'WILDCAT' tax if you accept my acronym.

Secondly where a company is *listed* is not relevant. It is where the company is domiciled that matters. For example James Hardie has its primary listing and extensive operations in Australia but is domiciled in the Netherlands, and so comes under the new tax regime.

BHP Billiton is an interesting case because it is 'dual listed' in both Australia and the UK. If you hold UK domiciled BHP shares and receive your dividends in pounds then these shares fall under the new regime. If you hold the same shares in Australia and receive Aussie dollar dividends then these shares do not fall under the new regime.

The principal requirement for an Australian company to be exempt is that they run an Australian franking credits account. My interpretation is that if such an Australian company expands with overseas sales to the extent that their dividends are no longer fully franked, that does not disqualify them from being exempt from the new tax regime because principally they still pay their tax in Australia.
If however they were to relocate overseas, like Newscorp, then such a company would lose their tax exempt status.

Does that cover things?

SNOOPY