In this document you’ll find detailed information about Frasers
Property Australia and Frasers
Property Industrial Australia’s tax affairs including our attitude towards managing tax, our tax governance processes and how much tax we paid during the year ended 30 September 2022.
Frasers Property Australia (FPA) and Frasers Property Industrial Australia (FPIA) are two of Australia’s leading property groups, active in the residential, retail, commercial, industrial, and build-to-rent sectors. FPA and FPIA are part of the Australian platform of Frasers Property Limited, a multi-national real estate company with assets of approximately S$40.2 billion as at 30 September 2022 and operations across 70 cities and 20 countries worldwide.
With nearly 100 years of experience, FPA has built over 145,000 homes for Australians in award-winning communities that are diverse, connected, and sustainable, including the internationally acclaimed Central Park Sydney and Ed.Square in NSW, Burwood Brickworks and Freshwater Place in VIC, and is a JV partner in the ~A$3 billion Central Place Sydney development in NSW. FPA’s operations cover the development of residential land, housing, and apartments; build-to-rent, commercial, retail and mixed-use properties. FPA have assets under management valued at A$1.9 billion in Australia as at 30 September 2022.
Frasers Property Industrial (FPI) owns and manages industrial and logistics properties in Australia and Europe, and its portfolio includes logistics facilities, warehouses and production facilities in strategic locations. FPIA is the Australian operations of FPI. FPI has approximately S$11.2 billion of assets under management as at 30 September 2022.
FPI and FPA provides property management services to the commercial, logistics and industrial properties owned by Frasers Logistics & Commercial Trust (FLCT). FLCT is a SGX-listed REIT with a S$6.7 billion portfolio comprising 105 logistics, industrial and commercial properties in five developed markets – Australia, Germany, Singapore, the United Kingdom and the Netherlands. FLCT is sponsored by the Frasers Property Limited Group and is managed by Frasers Logistics & Commercial Asset Management Pte. Ltd.
FPA and FPIA have certified over 7.2 million square metres of Green Star space across our communities, and our commitment to reduce carbon has been approved by the global Science-Based Targets initiative. FPA and FPIA are also certified by the Australian Government’s Climate Active initiative.
Together, FPA and FPIA employ over 600 staff across Australia, with offices located in Sydney, Melbourne, Brisbane, Perth, and Hong Kong, and are recognised as an Employer of Choice for Gender Equality by the Australian Government’s Workplace Gender Equality Agency.
Frasers Property Australia Pty Limited (FPAPL) and Frasers Property Industrial Australia Pty Limited (FPIAPL) are members of the FPAPL multiple entry consolidated group (FPAPL MEC Group). The FPAPL MEC Group and the Frasers (FPA) Pty Limited (FFPA) MEC Group (FFPA MEC Group) comprise the majority of the entities of the Frasers Property Limited Group’s Australian operations.
FPAPL, FPIAPL and FFPA prepare financial accounting information in accordance with standards issued by the Australian Accounting Standards Board (AASB) and are audited annually by an external independent auditor.
The Risk Appetite & Tolerance Statement is a Statement endorsed by the FPA Board and FPI Board and sets out the level of risk (including tax risk) which the group is prepared to accept. Overall, the statement provides that the group has no tolerance for a material breach (that is, an infringement with a fine in excess of $50,000 or any criminal penalty).
The FPA Board and FPI Board is also committed to ensuring that any non-routine transactions or arrangements undertaken by the group are:
• Not tax driven and supported by genuine commercial activity.
• Supported by a reasonably arguable position where it is unclear how tax legislation would apply.
• Assessed in terms of the likelihood of contravening any tax anti-avoidance rules.
The FPA Board and FPI Board also have no tolerance for transfer pricing benefits to arise in respect of significant international related party dealings with any other Frasers Property group entities.
The FPA Board and FPI Board Tax Governance Policy sets out our tax strategy as follows:
• To comply with all State and Federal tax obligations and pay or account for the correct amount of tax.
• To ensure that the FPA and FPIA tax positions adopted are consistent with what the FPA and FPI Directors authorised or believe is prudent.
• To assess tax effective opportunities but ensure they are in line with the commercial objectives of the business and within the boundaries outlined in our Risk Appetite & Tolerance Statement.
• To foster good relationships with State and Federal tax authorities through proactive management of FPA and FPIA tax affairs in ‘real time’ (where possible).
• To collaborate with our related parties in relation to international reporting obligations.
The FPA Board and FPI Board is also committed to the identification, assessment, monitoring and management of risks across the organisation. The overall risk management process is governed by the Risk Management Policy and specific to tax, senior management developed the Tax Risk Management Procedure.
The FPA and FPI tax risk management and governance is depicted in the following diagram:
Consistent with our Tax Governance Policy, we seek to engage with the Australian Taxation Office (ATO) on a ‘real time’ basis by actively engaging and being transparent.
FPA and FPIA is part of the multi-national Frasers Property Limited group. Our related party dealings predominantly comprise of financing arrangements and transactions with our Hong Kong subsidiary used to market and sell our properties.
The international related party dealings between the FPAPL MEC Group and its overseas related parties are risk assessed in accordance with the internationally recognised ‘arm’s-length principle’ and in compliance with Australian transfer pricing laws supported by contemporaneous transfer pricing documentation.
Country-by-Country (CbC) reporting is part of a wide range of international measures aimed at combating tax avoidance through more comprehensive exchanges of tax information between countries.
The FPAPL MEC Group and FFPA MEC Group’s FY 2022 CbC reports were lodged with the ATO at the same time as the income tax return for that period.
A high level summary of the FPAPL MEC Group and FFPA MEC Group’s FY 2022 tax results are presented below:
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carried forward tax losses
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In prior years, the ETR in the Voluntary Tax Transparency Report have been calculated in respect of tax payable (E) which relates to corporate taxes divided by accounting profit (C). However, the ETR will be calculated based on accounting standards going forward. The Australian Accounting Standards Board (AASB) has provided guidance to assist taxpayers meet the Tax Transparency Code (TTC) recommendations for calculating effective tax rate. Broadly, TTC ETRs are defined as `company tax expense’ divided by `accounting profit’ for Australian operations, where `company tax expense’ is interpreted by reference to the meaning provided in the Australian accounting standards. On this basis, company income tax expense is calculated as accounting profit multiplied by Australia’s corporate tax rate of 30% adjusted for `non-temporary’ differences between accounting and tax.
In FY 2022 the FPAPL MEC Group had an accounting profit of $508.3 million (C) and taxable income of $21.4 million (D). The FPAPL MEC Group ‘non-temporary’ differences are predominantly from revenue gain on disposal of units in Ivanhoe Trust and accounting restatement of non-interest bearing loan from FFPA to FPA under IFRS 9. These temporary differences resulted in an ETR of 30.95%.
In FY 2022, the FFPA MEC Group had an accounting profit of $7.3 million (C). The FFPA MEC Group did not have any permanent differences, which resulted in an ETR of 30%.
During FY 2022 the FPAPL MEC Group and FFPA MEC Group paid $131.7 million in various taxes and levies in Australia at the State and Federal level.
A summary of the taxes paid is summarised below:
Note 1: Corporate Taxes
Corporate taxes in Australia are paid by companies on ‘taxable profits’ at the rate of 30%. The term ‘taxable profits’ refers to the accounting profit (i.e. total income less expenses) adjusted in accordance with the ITAA 1936 and the ITAA 1997 to arrive at the ‘taxable income’ that is taxed at the corporate rate of 30% (i.e. ‘income tax’). This amount represents the Australian group’s payments made in respect of the financial year from 1 October 2021 to 30 September 2022. This figure also includes withholding tax paid (additional to the tax paid on company tax profits).
Note 2: Employment Taxes
Employment taxes include Payroll Tax, Pay-As-You-Go withholding, superannuation guarantee and Fringe Benefits Tax.
Note 3: State Taxes
State taxes include Land Tax, Stamp Duty and Car Park Levies payable in each Australian state.
Note 4: Net Goods & Services Tax (GST)
The GST figure shown is the net GST amount paid. Net GST amount represents the GST collected on outputs (i.e. sales) less GST claimed on expenses.
Note 5: Council Rates
Council Rates are local government charges payable in respect of each development held around Australia.
If you require further information, please contact Frasers Property: Email: tax@frasersproperty.com.au
Cover image: Frasers Landing, WA
Back image: Huhtamaki Tailored Packaging, QLD