The partner also touches on the growing complexity of Australian and international tax regimes
For Clayton Utz tax controversy partner Rimma Miller, the increasing complexity of tax regimes in Australia and worldwide is proving to be a significant challenge for the legal profession – as evidenced by the volume of taxation cases in High Court. Thus, she encourages people to seek legal advice early in the game to save costs and limit negative publicity.
In the second part of this interview, Miller explains why it’s good for tax lawyers to be cautious, and discusses the impact of certain proposed changes to income tax law.
What's one misconception you think people have about lawyers, and how would you correct that misconception?
Lawyers may sometimes be perceived as too cautious, slowing down the pace of commercial transactions. However, the context is important and early consideration of, for example, tax risks and exposures can in fact avoid significant issues and save the clients time and money. While these things need to be balanced, careful assessment of the Australian tax risks in undertaking the transaction and early engagement with lawyers, can bring significant future cost savings and prevent adverse publicity.
What challenges are particularly pressing in the country's legal industry?
The growing complexity of Australian and international tax regimes and the fast pace of change present challenges for taxpayers and practitioners. Diverted profits tax, transfer pricing - including issues associated with the transfer of intangibles - permanent establishment rules, and tax residency are just some examples of the issues that continue to feed into this complexity. The number of taxation cases that make their way to the High Court and the number of the applications for a special leave in tax cases bear this out.
Additionally, there is a level of uncertainty resulting from measures announced but not yet enacted. One is the proposed changes to Division 855 of the Income Tax Assessment Act 1997, dealing with taxation of foreign investment into the assets that are considered to be “real property” in Australia. These proposed provisions seek to considerably expand the definition of “real property” with retrospective effect, going back to 2006. These proposed amendments, if passed, would also have direct implications for foreign investments into renewables in Australia.
Seeing legal advice early is important to enable lawyers to guide the decision making of the clients and enable appropriate tax risk management to be undertaken.
What are your thoughts on the current state of the rule of law worldwide?
We are fortunate in Australia to have strong support for the rule of law both in our legal system and in our community. Overall, however, it is important to remember that it is on us as lawyers to put in the hard work and advocacy to ensure this remains the case and to encourage the supremacy of the rule of law worldwide.
What are you looking forward to the most in the coming year?
Having joined a highly collaborative firm like Clayton Utz, I am working with market-leading partners and lawyers and expanding our tax controversy capability to deliver the best and most pragmatic outcomes for our clients.
With our tax controversy capability, Clayton Utz provides a complete tax offering for our clients, covering transactions, advice and dispute resolution, and I look forward to working with my tax and dispute resolution partners in further expanding and growing our offering.
