In a media release issued on 8 November 2013, the Assistant Treasurer, Senator Arthur Sinodinos, announced that the Board of Taxation will extend its review of Division 7A of Part III of ITAA 1936 to include the broader tax framework in which private business operates.
“The Board’s examination of Division 7A highlights that complexities can arise because of the Division’s interaction with other areas of the tax code and its operation in the context of private group tax arrangements,” the Assistant Treasurer said.
The Board has canvassed three models for addressing Division 7A reform and advises that there are complexities associated with each of the options proposed.
“The Board will examine the tax implications of the way that small businesses choose to operate, giving particular consideration to areas where there may be inequitable outcomes and where the system could be simplified for the benefit of small business,” he said.
The Board will conduct the review in line with amended terms of reference (set out in the media release) and provide the Government with a final report by 31 October 2014.