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Tax consolidation: proposed changes mean it's time for business to take action.

Publication date: 04 May 12 | Source: WEEKLY TAX BULLETIN

Issue: Issue 17, 27 April 2012

Abstract:

On 18 April 2012, the Assistant Treasurer released an exposure draft (ED) of the law to implement changes to the tax consolidation rules announced by the Government in 2011. The changes will alter tax consolidation in relation to:

  • Tax outcomes relating to rights to future income (RFI) and various revenue assets.
  • Interaction with the Taxation of Financial Arrangements (TOFA) rules.

The ED addresses Government concerns that the 2010 amendments to the tax consolidation RFI and revenue asset rules resulted in outcomes and revenue costs not anticipated by the Government. The changes repeal the relevant 2010 amendments and replace them with 3 sets of rules, depending on the time when entities joined consolidated groups.

The changes affect mergers, acquisitions and restructure arrangements, as well as prior year positions.

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Author profiles

Jonathan Rintoul CTA
Photo of author, Jonathan Rintoul Jonathan is a partner at EY in Melbourne. Jonathan’s experience includes providing corporate tax advice and compliance services to listed, government, private and foreign-owned entities, predominantly in the resources, energy and utilities sectors. This experience is complemented by two long-term secondments into senior “in-house” tax roles for listed entities, including during 2015 when Australian corporate taxpayers faced a range of new tax transparency demands in the face of increasing public interest in this issue. - Current at 30 August 2017
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Andrew Woollard CTA
Andrew Woollard FTIA is a Tax Partner with Ernst & Young, specialising in corporate and international tax. Andrew has over 15 years experience in advising clients on a broad range of corporate tax issues, including M&A transactions, restructuring, and business tax reform issues, including tax consolidation and tax loss issues. - Current at 30 August 2017
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