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Consolidation integrity measures

Key documents

As part of the 2013-14, 2014-15 and 2016-17 Budgets, the Government announced changes to the tax consolidation rules to ensure the integrity of the system.

The Bill contains six measures designed to remove anomalous tax outcomes that arise under the tax cost setting rules when an entity leaves or joins a tax consolidated group. These changes remove these unintended outcomes.

Specifically, the Bill improves the operation of the tax cost setting rules by:

  • preventing a double benefit from arising in relation to deductible liabilities when an entity joins a consolidated group;
  • ensuring that deferred tax liabilities are disregarded;
  • removing anomalies that arise when an entity holding securitised assets joins or leaves a consolidated group;
  • preventing unintended benefits from arising when a foreign resident ceases to hold membership interests in a joining entity in certain circumstances;
  • clarifying the outcomes that arise when an entity holding financial arrangements leaves a consolidated group; and
  • clarifying the treatment of intra-group liabilities when an entity leaves a consolidated group.

These measures address concerns raised in the Board of Taxation’s post-implementation review of the consolidation rules.

Responding

You can submit responses to this consultation up until 6 October 2017.

Interested parties are invited to comment on this consultation.

While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment.

Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

How to respond

Post

Address written submissions to:

Steele Broderick
Senior Adviser
Corporate and International Tax Division
The Treasury
Langton Crescent
PARKES ACT 2600

Enquiries

Consolidation@treasury.gov.auSteele Broderick – 02 6263 3207