Tax Efficient Infrastructure Financing: Reducing Funding Costs

10 Pages Posted: 10 Sep 2010

See all articles by Gordon Mackenzie

Gordon Mackenzie

University of New South Wales - Australian Taxation Studies Program (ATAX)

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Date Written: September 8, 2010

Abstract

The way that the Australian tax system taxes infrastructure projects means that the tax losses that are created from the early stage expenses in a project are not used by the project sponsor until some time in the future. That means that the net present value of those losses is less than the rate of tax paid on the project income when it commences, and that increases the cost of funding these types of projects. The market has developed several ways for overcoming this loss in value but these are complex and expensive. The Australian Government has announced that it may fix the problem. This paper offers five alternate ways that the Government should consider, including copying that which is done in Canada, as a mean of fixing the problem.

Keywords: Taxation, Australia

Suggested Citation

Mackenzie, Gordon, Tax Efficient Infrastructure Financing: Reducing Funding Costs (September 8, 2010). UNSW Law Research Paper No. 2010-36, Available at SSRN: https://ssrn.com/abstract=1673695

Gordon Mackenzie (Contact Author)

University of New South Wales - Australian Taxation Studies Program (ATAX) ( email )

Sydney, NSW 2052
Australia

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