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Foreign resident CGT reforms expand taxable Australian real property, withholding and renewables discount.

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On 30 October 2025, the Federal Court (Hespe J) handed down its decision in YTL Power Investments Limited v Commissioner of Taxation, finding for the Applicant and providing important guidance on the interpretation of ‘taxable Australian real property’ under Division 855 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997).

On 9 August 2024, the ATO sought to appeal a decision exempting PepsiCo from RWHT, highlighting its focus on taxing embedded royalties, IP, and applying DPT.

Treasury is taking steps to ensure fairer tax treatment for foreign resident investors by tightening Australia's foreign resident Capital Gains Tax (CGT) regime. Proposed changes aim to broaden the CGT base and enhance integrity, impacting infrastructure, energy, agriculture, and more.

For renewable energy companies, understanding the implications of the new thin capitalisation rules is crucial. These rules will apply for income years starting on or after July 1, 2023.

The Australian Federal Government is ambitiously targeting 82 per cent renewable energy by 2030, currently at 30-35 per cent. Support mechanisms span grants, loans, and equity investment, nurturing diverse sectors from critical minerals to clean energy technologies.

PepsiCo appealed a court decision that found it owed the ATO AUD 3.6m in royalty withholding tax for FY 2018 and 2019.