Complexities of the loss carry-forward provisions
Publication date: 01 Oct 11
Source: "THE TAX SPECIALIST" JOURNAL ARTICLE
Abstract:
Australia has a policy of taxing company profits and losses asymmetrically: profits are taxed immediately, while losses must be carried forward and offset against future income. This policy is achieved via the loss carry-forward provisions. While these provisions have always been complex, recent amendments to the provisions and additions to other areas of tax law, such as consolidations, have resulted in increased criticism. In addition, economic instability has exacerbated pre-existing tensions between the varying stakeholders. Taxpayers' desire for clarity and the tax professional's desire for efficiency has conflicted with increased ATO scrutiny which is driven by government's need for revenue.
This article analyses the loss carry-forward provisions for evidence of complexity in order to evaluate whether these criticisms are indeed justified.
Author profile:
Bernard Kent FTIABernard is a Tax Adviser with Chevron Australia Pty Ltd.
Current at 01 October 2011
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