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Beware Stamp Duty on Your M&A Deal


When GST was first introduced the States and Territories agreed to stamp duty reform. The broad intention of that reform was to reduce the stamp duty base. However, in the M&A space, the reality is quite different. The opposite has occurred. The stamp duty base has expanded. Taxand Australia examines the tax implications for taxpayers involved in M&A activity in Australia.

To demonstrate this, statements that could previously be made about how stamp duty applies to mergers and acquisitions of companies are no longer valid. For example there were assumptions that duty is not charged on acquisitions of:

  • listed companies
  • companies that do not own freehold land
  • companies not having substantial land assets

These assumptions are no longer valid. There has been a transformation in the key head of duty that now applies to M&A deals. That head of duty has two models: "land rich" duty and "land holder" duty. Under both models, if there is an acquisition of shares, duty is charged on the unencumbered market value of land in the jurisdiction owned directly or indirectly by the target company.

Taxand Australia analyses the stamp duty reform in greater detail

Taxand's Take

In the result, the stamp duty implications for an M&A deal need to be assessed very early in the process. Stamp duty efficiency is critical. The potential for multiple incidences of duty for setting up the acquisition structure and on any post acquisition restructure needs to be properly managed.

Your Taxand contact for further queries is
Gary Chiert
T. +61 2 9210 6155

Taxand's Take Author