Risk as a measure in taxing financial arrangements
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Publication date: 01 Dec 11
Source: "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
Recent reform of the Australian laws for taxing financial instruments are expressed in terms of risk for the purpose of identifying the relevant taxpayer or characterising a financial arrangement, rather than using the traditional drafting terms of legal ownership by a taxpayer or legal form of the financial arrangements. Generally, this change in the way that the laws are expressed is for either efficiency reasons, as in the case of Div. 250, or for integrity reasons, as in the case of the debt/equity rules and the TOFA rules.
This paper reviews several of the changes to the way that the Australian legislation for taxing financial instruments is drafted where, previously, legal concepts for identifying the taxpayer were used and legal form was used for characterising a financial instrument, to the use of risk for both those purposes. It argues that risk is a better measure of who the taxpayer is and what the financial instrument is because that is consistent with the way that commerce operates.
Author profiles:Dr Alfred Tran CTA
Alfred is is an Associate Professor in the School of Accounting and Business Information Systems, College of Business and Economics, The Australian National University.
Current at 01 September 2013
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Gordon Mackenzie CTA
Gordon is a Senior Lecturer at is a Senior Lecturer at the Australian School of Taxation and Business Law, UNSW.
Current at 01 December 2011
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