Mersen Oceania and McLean Delmo Bentleys, Australia
August 21, 2024
In Australia, Mersen Oceania has operated for over 65 years, with Financial Controller Slobodan Brzica, who has 25 years of experience, overseeing the financial operations. Mersen, a global leader in electrical power and advanced materials, has been serving high-tech industries for over 130 years.
Mersen Oceania’s new auditor
When Mersen Oceania sought to appoint a new external auditor, they needed a partner who understood their complex business, provided expert auditing services, and offered value for money. The transition to a new auditing partner was critical, as it had to ensure continuity and compliance with the strict reporting deadlines set by Mersen’s global headquarters.
Choosing McLean Delmo Bentleys
McLean Delmo Bentleys was selected as the new auditing partner due to its robust auditing expertise. McLean Delmo Bentleys developed a detailed project plan that focused on conducting a comprehensive audit while adhering to the necessary reporting deadlines, incorporating technology to streamline the audit process and established clear timelines to meet all global reporting requirements efficiently. From the outset, McLean Delmo Bentleys demonstrated a deep understanding of Mersen Oceania’s operations and their approach provided valuable insights and recommendations that were well-received by Mersen’s Board of Directors. Slobodan Brzica commented: “Impressive. The team is dynamic and we are pleased with the recommendations and suggested actions.”
Ongoing support
A key factor in the success of this partnership has been the continuity of McLean Delmo Bentleys’ team, which has allowed for the retention and sharing of critical knowledge. This consistency ensures that even as team members change, the quality of the audit remains consistently high, supported by a strong technical foundation and an intimate knowledge of Mersen Oceania’s business. McLean Delmo Bentleys successfully met the tight global reporting deadlines, completing the audit within two months. Their efficient and effective service delivery continues to support Mersen Oceania’s commitment to innovation and excellence.
Slobodan Brzica concluded: “The transition was impressive and their understanding of our business was evident from the start. They are a team of real professionals and switched on.”
Australia’s ‘fair share’ tax reform hits multinationals after Australia’s tax system has a major shake-up. Australia’s tax system is going through much-needed reform. Critics say it simply cannot deal with multinational trade, increasing global competition for investment, the internet and the digital economy. It has also been criticised for being unfair, and one of the first areas that the government has focused on is multinational taxation.
Making Multinationals Pay Their Fair Share – Integrity and Transparency Bill 2023
The Bill aims to strengthen Australia’s thin capitalisation rules to combat what the government considers to be excessive debt deductions eroding the domestic tax base. It will limit the amount of debt used to fund Australian operations or investments and disallow debt deductions when debt used to fund Australian assets exceeds certain limits. It applies to most multinational businesses operating in Australia with at least AUS$ 2 million in debt deductions.
The Bill will affect Australian entities investing overseas and their associate entities; foreign entities investing in Australia; Australian entities with certain overseas operations and their associate entities; Australian entities that are foreign controlled; and foreign entities with operations or investments in Australia.
Australia’s ‘fair share’ tax deadline
Delays to the bill have meant that the new tax regime has been enacted only months prior to the income year to which it applies. Companies with a 30 June year-end had less than eight weeks to restructure their debt arrangements.
Regardless of year-end, this will create a lot of work for clients. Organisations will now have an obligation to trace and document the use of all related party loans to assess whether they are used for ineligible debt creation purposes. It may be worth restructuring debt, such as using working capital for ineligible debt creation purposes.
Clients will also need to satisfy their auditor that their interest expense does not give rise to a permanent tax difference. All companies need to take tax advice and at a minimum build a new thin capitalisation model, as 2024 tax return forms will require disclosure of the thin capitalisation method chosen and applied.
It cannot be underestimated how complex and challenging it will be to apply the new rules to such a wide variety of companies. It is going to require consultation with technical accounting and banking experts, and for some, the road to compliance will be a bumpy one. Some organisations may find themselves in a situation where genuine commercial arrangements result in debt deduction denials. Any uncertainty in tax positions that may require disclosures in financial accounts will have to be actioned as soon as possible.
The Bill requires the government to undertake a review of the thin capitalisation amendments to commence no later than 1 February 2026. This will provide an opportunity to assess the impact of these changes, including whether the amendments have had any effect on Australia’s ability to attract foreign investment.
Direct foreign investors
Australia is considered a very attractive option for foreign direct investment (FDI) by many companies across the globe, with a high ranking on the FDI confidence index in 2024, according to Statista. Foreign economies had a total of $4.7 trillion invested in Australia at the end of 2023.
While mining and energy still attract the lion’s share of investment, the technology sector is booming. Treasurer Jim Chalmers has said he wants to see tech companies pay their fair share of tax, and a recent tax victory over royalties will have major implications.
Case study: PepsiCo
The Federal Court of Australia on November 30, 2023, ruled in favour of the Australian Taxation Office in a dispute with PepsiCo. The ATO argued that certain portions of the payments made in relation to bottling agreements were royalties and so were subject to royalty withholding tax. It was also ruled that diverted profits tax would apply.
This is the first time a court has considered Australia’s diverted profits tax since its introduction in 2017. Multinationals will now come under increased scrutiny of embedded royalties that arise from intellectual property use and there may be possible changes to tax treaty interpretation.
It is clear that both indigenous and foreign multinationals will have to be rigorous in their reporting and will need a lot of outside help to ensure they do not fall foul of the new tax regime. If the Australian government wants to make large corporations the villain, companies have to make sure their reporting is as transparent as possible.
If you would like to speak to one of our experts in Sydney or Melbourne, please get in touch.
Global vacancies
Kreston Stanley Williamson [now part of SW Accountants and Advisors] (Correspondent)
April 11, 2024
News
A guide to setting up a business in Australia
February 28, 2024
In this guide to setting up a business in Australia, McLean Delmo Bentleys offers expert advice on establishing a business, complying with local regulations and understanding reporting obligations services to guide companies through the establishment process, ensuring successful market entry.
The guide to establishment services in Australia is an overview of the areas for consideration when setting up a business in Australia. For more detailed information on setting up a business in Australia, please get in touch.
When entering the Australian market, selecting the appropriate business structure is critical. Options include a representative office, branch, or subsidiary, each with distinct regulatory, tax, and operational implications. The guide covers Australian taxation issues, repatriation of profits, compliance with the Corporations Act, and financial reporting obligations, tailored to your long-term strategy and operational scale.
International taxation and strategic planning
Effective tax planning is essential for minimising liabilities and maximising returns. The international guide offers an overview of useful strategic advice on tax structuring, focusing on mitigating tax leakage and enhancing after-tax returns for shareholders.
Corporate secretarial and compliance duties
Understanding company secretarial requirements and maintaining compliance with Australian Securities and Investments Commission (ASIC) regulations is vital for operational integrity. Services you may need include registration, maintenance of company registers, and fulfilment of ongoing corporate secretarial obligations.
Taxation, accounting, and immigration services
This guide includes an overview of taxation compliance, accounting support, and immigration services, ensuring your business meets all legal requirements while focusing on growth. From obtaining an Australian Business Number (ABN) and Tax File Number (TFN) to managing fringe benefits tax and GST obligations, our team provides end-to-end support.
Setting up a business in Australia requires careful planning and expert advice. For more detailed advice please get in touch.
News
Laurent Le Pajolec
Member of Board EXCO A2A Polska, Kreston Global ESG Committee member
General Manager and shareholder of consulting companies with a Marketing/ business development and a Financial background with direct experience with several sectors (Real estate, Transport, Fintech, Legaltech, M&A, Import- Export, HR, Restructuring). Exco Polska Board Member.
Christina Tsiarta
Advisory services on sustainability, ESG & climate change
Christina is an experienced consultant specialising in ESG, sustainability, and climate change. She has over 13 years of expertise and has worked with various organizations, including local municipalities, national government agencies, the Directorates-General of the European Commission, and the private sector across different industries.
Call for systemic change in DEI through TCA
May 9, 2023
Our experts and ESG Committee members Laurent Le Pajolec and Christina Tsiarta recently collaborated on an article where they shared insights on why a firm should engage in Trade Cooperation Agreement (TCA) and why existing accounting methodologies are no longer sufficient for modern-day businesses.
Progress in DEI stalls globally
The Netherlands has overtaken Canada to become home to the world’s most diverse, equitable, and inclusive workplaces, as per Kantar’s Inclusion Index 2022. The index measures progress in developing inclusive and diverse workplaces globally, with personal services, non-profit, and professional services being voted as the most inclusive industries, while the entertainment industry remains among the least inclusive. Despite a growing appetite for systemic change in diversity, equity, and inclusion, progress in developing diverse and inclusive workplaces has stalled globally, with countries such as Canada, the USA, and Italy seeing a significant drop in their scores. Failure to take meaningful action impacts recruitment and retention, with one in four employees likely to leave their organisation due to a lack of inclusion.
Inclusion progress
The research indicates that although DEI has become more prominent in businesses’ agendas, there has been a lack of progress. The global score for the index remains at 55, the same as in 2020. In contrast, eight out of twelve markets surveyed have experienced a decline in their Inclusion Index score from 2019 to 2022. However, Mexico and Australia have made significant strides in DEI progress, with 15% and 7% increases in the last three years.
Industries are making varied progress in their efforts towards inclusion. Personal services (such as beauty salons), professional services (like legal and accounting firms), and non-profit organizations are leading the way. Financial services, ranking in the middle, and IT and marketing companies, in the lower half of the ranking, are taking steps to improve inclusion. However, industries like fashion, hospitality, security, entertainment, media, sports, publishing, and agriculture, ranked at the bottom, still have a lot of work to do to improve their inclusivity.
Read more from Laurent Le Pajolec and Christina Tsiarta here.
Global vacancies
Level 3, 302 Burwood Road
April 19, 2023
News
Kamal Thakkar
Partner, Kreston Stanley Williamson, Sydney Australia
Kamal leads the Audit & Assurance and Transaction Advisory Services at Kreston Stanley Williamson and the Kreston Global Regional Audit Director for Asia Pacific. Kamal is an experienced audit, assurance, and business advisory professional who has been in the accounting industry for 20 years. He has serviced a wide range of clients and industries both locally and internationally.
Michael Goodrick
Managing Partner, Kreston Stanley Williamson, Sydney Australia
Michael is the managing partner of Kreston Stanley Williamson and has been in the Tax and Accounting industry since 1983. He oversees the running of the firm and manages larger clients in areas such as structuring, tax compliance and planning, commercial issues, succession, and other exits from business, and general business strategy.
Investing in Australia
April 17, 2023
A highly skilled workforce and preferential regional trade agreements managed with robust tax planning are still make investing in Australia appealing, even with supply chain issues and inflation challenges.
Thriving sectors such as renewable energy, infrastructure, and real estate and sustainable investing, infrastructure, health care, and real estate are expected to shape the Australian investment landscape, providing potential opportunities. To shed light on these trends and insights, we spoke to Michael Goodrick, managing partner, and Kamal Thakkar, partner at Kreston Stanley Williamson in Sydney.
Asia Pacific investment trends
In recent research on global investors, India and China were highlighted as the countries with entrepreneurs who were most likely to expand. Does the data ring true for you in your international client profile?
Michael: Our client base has not had much exposure to the Indian market. Larger corporates still have a large presence in India with outsourced offshore customer service, administration and finance centres prevalent, but the SME market in our client base does not trade as much with India as other countries around the world. However, there are signs of this changing with increased trading and business ties with India in recent times.
China is still a very important trading partner with Australia and other Asian countries. They provide a lot of products as a supplier to our commercial and manufacturing businesses. China as an export destination has, due to some cross-border and relationship issues, not been as strong a trading partner to a number of countries in the Asia Pacific area as it once was. I am sure these issues will subside and the demand from China for goods and resources from the Asia Pacific region will increase again.
Australia inward investment
Kamal: With a highly skilled workforce and supportive government, the renewable energy, infrastructure and real estate sectors continue to see significant investment.Australia has been increasing its footprint in trade and other ties with its Asia Pacific neighbours, whilst maintaining its strong ties with the US and UK – these alliances are seeing a greater number of businesses willing to do business in Australia given its skilled workforce and drive for innovation. An area that will compel such inward investments will be the relatively higher tax rates compared to other jurisdictions – careful consideration is therefore needed in terms of the business investment structures and related tax planning.
How has the economy changed in the last 12 months?
Kamal: Like the rest of the world, the Australian economy has undergone significant changes in the past 12 months as it recovers from the impacts of the pandemic and associated lockdowns. The challenges posed by COVID-19 still persist, with continued disruptions in the supply chain and business closures. However, despite all of this Australia has demonstrated resilience and economic recovery in recent months.
Some of this resilience is likely to be from the continued strength of Australia’s mining sector which then provides a peripheral effect on business in related industries. Having said this, recent times have seen significant interest rate rises in a relatively short period of time to tackle inflation. Whilst its most likely warranted, the lack of foresight shown by the Reserve Bank of Australia has caused uncertainty in the economy, the effects of which are likely to still ripple through over the short to mid-term. This is demonstrated by the consistently weak consumer sentiment in the same period.
Australia sector growth
Michael:The mining and technology industries in Australia continue to do well, as reflected by our firm’s and clients’ growth in these sectors. Cybersecurity has emerged as a major growth area, with continued innovation and investment being driven by the latest security breaches of public companies in this past year.
What advice are you giving clients to secure growth in the next 12 months?
Kamal: The core advice has been to manage cash flows and investment decisions carefully so as not to over-reach. Rising interest rates combined with local and global uncertainty are like to impact even Australia’s so-far resilient economy. However, when opportunities present themselves, and if care has been taken in capital management, clients will be able to invest in such opportunities to secure growth.
Australia future trends
Michael: Based on our observations, sustainable investing, infrastructure, health care and real estate are expected to continue shaping the Australian investment landscape. Gaining momentum over most is sustainable investing with a greater emphasis on ESG factors, impacting renewable energy infrastructure and real estate investment considerations.
What new services have clients been requesting?
Kamal:Rather than new services, we have seen an increase in the demand for advisory services, ranging from budgeting and forecasting, and management control, to due diligence and valuations with businesses looking for strategic options for the next stages of their life cycle.
What does the next 12 months look like for your firm?
Michael: Despite the high inflation, high-interest rate environment, and the possible risk of recessionary pressures, our firm expects good growth in the next 12 months.With good growth in our audit division as we bolster the standard and size of audits we are now capable of attending to, as well as our clients growing appetite for cross-border tax and commercial advice, the demand for our services has increased and will continue to do this over the coming 12 months.
Our clients increasing need for outsourced CFO, management account and bookkeeping has also underpinned growth in our management accounting division as well.
If you would like to find out more about setting up a business in Australia, please get in touch or fill out the enquiry form below and one of the team will contact you.
News
The International Entrepreneur Podcast
October 26, 2022
We have a brand new episode – and brand new guests to go with it – from our podcast, The International Entrepreneur.
Join JohnMarcarian, founder of both Expatland Global Network and CST Global Tax Advisers, and Boon Tan, Managing Director of CST Tax Advisers Singapore to dig a little deeper into what makes a successful interpreneur, and why courage and resilience are the two most important traits for those looking to expand their business.
The two new members are now both group leaders in their e-teams, Kreston Egypt now specialising in individuals moving in or out of Cairo and McLean Delmo Bentleys now responsible for the same in Melbourne.
The two firms are working with our two global mobility partners; Expatland, who co-ordinate the e-teams all around the world, offering one-stop service, organising everything from expatriate tax to finding a school, for their clients. andHarmony Relocation, a global relocation expert.
If you are moving abroad or looking to move staff overseas, the Kreston Global mobility network can offer tax advice and co-ordinate all other services, from organising a visa to moving your house contents to another country.
Learn more about our network and how we can help you and your employees move country.
News
Blackdot Consulting Pty Ltd, Australia
July 14, 2021
This prestigious consulting firm focuses on implementing strategic change for its clients that results in lasting customer-centric growth. Its clients include HSBC, JP Morgan, Deutsche Bank, eBay, AstraZeneca and Samsung among many other high-profile businesses.
Since it was founded in 2001, Blackdot has helped enterprises globally solve complex customer challenges, improve operational efficiency, and transform how they go‑to-market.
In 2011, the firm was looking to expand its services out of Australia to other parts of the world, starting with North America and Europe. Its management team met with Sydney-based Kreston Stanley Williamson (KrestonSW) and explained that they were seeking advisers who could not only deal with the basics but help them through the tax complexities involved with international growth and ensure they remained tax-efficient and compliant.
We worked with them to define and document the service relationships between their proposed offices in various countries. As part of this, we introduced them to Kreston US member CBIZ, James Cowper Kreston in the UK and Ardent Business Advisory in Singapore.
The co-ordinated approach between all the parties meant Blackdot received a seamless global service, and we are delighted that their overseas businesses have enjoyed strong growth in recent years.
Blackdot’s CEO Marty Nicholas said: “We had ambitious plans to grow internationally and were guided every step of the way by our Kreston partners. Our international expansion has been a great success and we, of course, continue to work closely with Kreston Global during the next stage of our journey.”
“We’ve enjoyed a long-term and successful relationship with Blackdot over the years which has led to a deep understanding of the business and its aims. We were very pleased to introduce them to the Kreston Global network which proved so valuable.”
Darren O’Malley Head of the Taxation division at Kreston Stanley Williamson
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