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Tax Planning

Since our publication of the Tax module in March 2020, the global covid-19 emergency and its fallout have presented a range of new challenges and considerations for large scale joint venture ("JV") projects in the infrastructure sector.

David Taylor

Group Commercial Director, Costain Group PLC

Tax planning will be important at the initial stages of any JV and the choice of vehicle will largely determine the tax issues that may arise throughout the project

The tax impact of how the JV project is structured has never been more important. Here we provide an overview of some of the major tax considerations facing projects and for JV participants in the delivery of these strategic investments.

JV Tax Context

As markets face continued uncertainties over the impact of the covid-19 pandemic, public and private investment in large-scale infrastructure is likely to continue to be a priority. Given the global economic impact of the pandemic, cash and financing capacity is likely to continue to be constrained, resulting in an increasing trend towards JVs for large scale and cross-border infrastructure projects.

Amidst the increasing business risks and financial constraints facing parties when delivering infrastructure projects, tax considerations will remain paramount. Some key tax themes are likely to emerge – from tax considerations posed within distressed projects that may require restructuring, refinancing and recapitalization; to challenges thrown up by priority areas for new government-backed infrastructure investment as a direct consequence of covid-19.

JV partners are likely to find themselves navigating new or heightened business risks in increasingly unpredictable economic conditions in different markets across the world and therefore ensuring that the JV is structured correctly from a tax perspective remains vital.

Where to focus tax work

Here are some key themes to consider when embarking on a new JV infrastructure project or restructuring or refinancing an existing one: 

  • Remember that the vehicle used to structure a JV will have different consequences from a tax perspective. Depending on the structure vehicle, tax may be payable where assets are transferred into the JV and also where profits are distributed amongst JV partners.

  • If you are looking to restructure an existing JV, will a different vehicle be used? - There are likely to be tax consequences from the restructuring, particularly if assets need to be transferred into a new JV vehicle. Where this is the case, JV partners will need to ensure that there is sufficient cash available to pay any tax, despite the fact that profits may not be available for distribution.

  • If the JV is structured as a partnership and the partnership is looking for an investment of capital, there may be tax consequences for the JV partners if their existing share is diluted. This could give rise to chargeable gains, with tax payable despite no distribution of cash being received. 

  • If the parties are looking to terminate a JV arrangement, it will be important to consider how profits are going to be extracted, since there may be different tax consequences depending on how profits are distributed amongst the JV partners.



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Meet the team

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Borja Martín Ariza


Borja has extensive local and international experience in M&A and projects focusing on energy, infrastructure, and real estate.

Martin Borja
Ewan Robertson


Qualified in Australia and the UK and with US and other international experience, Ewan's expertise covers national and cross border mergers and acquisitions and other corporate transactional matters including joint ventures and strategic partnerships as well as equity fundraisings and private equity, reorganisations and reconstructions and general commercial advisory work.

Robertson Ewan
Eloise Walker

Partner, Global Head of Corporate Tax

Eloise is global head of the Corporate Tax team, specialising in corporate tax, structured finance and investment funds for a wide range of corporate and financial institutions.

Walker Eloise
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