Tax Report for 2016 Financial Year. YEAR ENDED 31 December 2016

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Franklin Perry
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1 Tax Report for 2016 Financial Year YEAR ENDED 31 December 2016

2 Table of contents 1. Introduction 2. Group overview 3. Tax payments / tax contributions 5. Effective tax rate and reconciliation of accounting profit to income tax payable 6 3

Introduction The ANZ Finance team is committed to meeting the highest standards of tax governance and are proud to present this report which details WSP Parsons Brinckerhoff Australia group s (WSP PB

WSP PB Australia makes a wide range of tax related payments to tax authorities in the various jurisdictions in which it operates and pays the appropriate amount of tax in each jurisdiction.

In addition to internal measures, we regularly use a range of highly qualified external taxation advisers to provide specific advice on significant transactions.

3 Introduction The ANZ Finance team is committed to meeting the highest standards of tax governance and are proud to present this report which details WSP Parsons Brinckerhoff Australia group s (WSP PB Australia) tax contributions for the 2016 Financial Year. WSP PB Australia makes a wide range of tax related payments to tax authorities in the various jurisdictions in which it operates and pays the appropriate amount of tax in each jurisdiction. WSP PB Australia has appropriate systems, processes and controls in place to identify, monitor, manage and escalate tax risks. In addition to internal measures, we regularly use a range of highly qualified external taxation advisers to provide specific advice on significant transactions. This report provides a detailed explanation of our tax profile and follows the guidelines set out in the Tax Transparency Code recommended by the Australian Board of Taxation and adopted by Australian Federal Government. Tax payments / contributions The table and graph below summarise the taxes paid, collected and remitted during the 2016 financial year to the Australian (Federal and State) tax authorities. Description A$ 000 Corporate Income Tax1 1,189 Other Taxes Fringe Benefits Tax 1,053 Payroll Tax 12,09 Withholding taxes on dividend/royalties/other income 280 NET GST 26,660 2 Tax collected by WSP PB on behalf of others: PAYG/PAYE/Salary Withholding 63,506 TOTAL 10,737 Corporate income tax is net of carried forward tax losses/tax offsets/rebates such as research and development tax offset 1 2 Net GST is the GST collected on sales by WSP less GST paid on business inputs purchased by WSP PAID BY CATEGORY NET GST Fringe Benefits Tax Payroll Tax George McMillan, Finance & Operations Director Corporate Income Tax Withholding taxes on dividend/ royalties other income Group overview PAYG/PAYE/Salary Withholding This report has been prepared only for the Australian entities within the WSP PB Australia group of entities. For Australian tax law, WSP PB Australia has elected to form a tax consolidated group (TCG). The WSP PB TCG is made up of WSP Australia Holdings Pty Ltd (as the Head Company of the Tax Consolidated Group) and eight wholly owned Australian corporate subsidiaries. The Australian entities are ultimately owned by WSP Global Inc. in Canada. 5

Effective tax rate and reconciliation of accounting profit to income tax payable A reconciliation of accounting profit to income tax expense and the effective tax rate (ETR) is provided below for the

Usually, there will be differences between the ITE and the amount of tax paid for the period to relevant tax authorities.

4 Effective tax rate and reconciliation of accounting profit to income tax payable A reconciliation of accounting profit to income tax expense and the effective tax rate (ETR) is provided below for the 2016 financial year end. Income Tax Expense (ITE) is an accounting concept, which represents the amount of income tax accrued for accounting purposes. Usually, there will be differences between the ITE and the amount of tax paid for the period to relevant tax authorities. This is due to the ITE including amounts which are not likely to be paid/received in the current period (commonly referred to as deferred tax expense). Further, for accounting purposes, ITE includes only taxes on profits and excludes other types of taxes such as GST, FBT and PAYG tax paid on behalf of employees. The ETR is an accounting concept and reflects the income tax accrued on the profit for a particular year. The ETR differs from the actual income tax payable in that year due to timing differences (where the timing of income and expense recognition differs for accounting and tax purposes). WSP PB Australia reported ITE of $1,693 million in the 2016 financial year. The reported ETR of 7.5% constitutes the ITE as a percentage of WSP PB Australia s total profit before tax. Description A$ 000 Net Earnings / (Loss) Before Tax 22,680 Tax using the Company s statutory tax rate (30%) 6,80 Adjustments Non-deductible expenses -773 Tax offsets and other incentives -1,087 Other items -921 Recognition of tax losses carried forward -2,550 (Over)/under provision of income tax in previous year 219 Total income tax expense 1, % The key factors driving the ETR below the statutory rate of 30% is: WSP PB Australia incurred significant tax losses during previous years. Under tax law, companies can carry forward unused tax losses and offset those losses against income in the future years, provided strict legislative carry forward rules are satisfied. The 2016 income tax return is yet to be finalised, however a fraction of those losses are expected to be utilised against WSP PB Australia s taxable income, resulting in a lower tax payable amount for the 2016 year. Furthermore WSP PB Australia have Research and Development tax offsets carried forward, which may be utilised to offset the expected tax payable. In addition, the ITE is affected by temporary differences such as provisions and accruals of expenditures in accounts which are not deductible for tax purposes until the expenditure is paid. This is generally in the subsequent financial year. 6 7

5 WSP Australia Pty Limited Level 27, 680 George Street Sydney, NSW 2000 wsp.com WSP is one of the world s leading engineering professional services consulting firms. We are dedicated to our local communities and propelled by international brainpower. We are technical experts and strategic advisors including engineers, technicians, scientists, planners, surveyors, environmental specialists, as well as other design, program and construction management professionals. We design lasting Property & Buildings, Transportation & Infrastructure, Resources (including Mining and Industry), Water, Power and Environmental solutions, as well as provide project delivery and strategic consulting services. With 2,500 talented people in 22 offices across Australia and New Zealand, we engineer projects that will help societies grow for lifetimes to come.

TAX REPORT For the year ended 30 June December 2016

TAX REPORT For the year ended 30 June December 2016 TAX REPORT 2016 For the year ended 30 June 2016 9 December 2016 TABLE OF CONTENTS 1. CHIEF FINANCIAL OFFICER S INTRODUCTION... 2 2. DOWNER GROUP OVERVIEW... 3 3. TAX STRATEGY AND GOVERNANCE... 4 4. TAXES