Another issue that often causes difficulty is the requirement of many debt and equity providers for a binding tax ruling as to the tax effectiveness of the structure adopted for project delivery, before providing debt and equity. The Australian Tax Office will not provide a binding tax ruling until final executed documents are provided to it. This too creates a measure of uncertainty.
This risk can be partially addressed by government ensuring that any structure is not taxation aggressive. In addition, bidders can address this risk to some extent by obtaining a preliminary non-binding taxation ruling from the Australian Tax Office, where this is possible. Ultimately, tax risk is taken by the private party.