Are electricity prices in Australia being driven by an excessive tax allowance?

Are electricity prices in Australia being driven by an excessive tax allowance?

AU Energy Compliance
The Australian Energy Regulator (AER) recently announced a review on how much estimated tax it will allocate when making revenue decisions for network businesses.[1] This is, in part, a recognition that network costs have been the key driver of rising electricity prices over the last decade or so.[2] As part of that review, AER has released an issues paper for consultation. We summarise this below. By Dr Drew Donnelly, Regulatory Specialist, Compliance Quarter Estimate of tax payments When setting revenue allowances for network businesses (i.e. deciding how much revenue monopoly distributors are allowed to make), the AER estimates expected tax payments for electricity and gas distributors. By reviewing the current approach to estimating tax, the end result may change the total revenue allowance for network businesses, and thereby contribute to…
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Combating base erosion and profit-shifting: A primer on the new multilateral tax convention

Combating base erosion and profit-shifting: A primer on the new multilateral tax convention

Uncategorized
On 7 June in Paris, 68 nations signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS)(the new Convention). Australia was one of the signatories. The new Convention sets minimum standards to be incorporated in tax agreements between nations. Some provisions in the new Convention are mandatory for signatories, while others are optional. In many cases, the provisions of the new Convention are intended to remedy the ‘OECD Model Tax Convention’. Today we offer a primer on the new Convention. We summarise the underlying rationale, some key components and the next steps for Australia. For the new Convention itself, go to http://www.oecd.org/tax/treaties/multilateral-convention-to-implement-tax-treaty-related-measures-to-prevent-BEPS.pdf. Base Erosion and Profit Shifting (BEPS) The new Convention arises from the OECD/G20 Base Erosion and Profit Shifting Project. Through…
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