Recently both the Senate and House Parliamentary Economics Committees reported with respect to their inquiries into the Transfer Pricing and Living Away From Home Allowance changes respectively.
Members may recall that The Tax Institute appeared before these Committees in order to express our strongly-held concerns.
With regards to the LAFHA changes, the House Committee recommendations essentially resulted in the legislation being sent back to the drawing board. Our arguments that the tax treatment of LAFHA should be determined either in the context of the income tax laws, or the FBT laws, but not both (as was proposed by the Bill) was accepted by the Committee. They also recommended clarification around the circumstances in which transitional relief would still be provided as we had suggested.
In recent days the Government has amended the legislation to take account of the Committee's concerns and the Bill has now passed the Lower House.
On Transfer Pricing, the Senate Committee did not support our arguments against the retrospective application of the legislation. The Bill was then debated in the Senate and despite the Coalition moving an amendment to scrap the retrospective application, the Bill passed without any changes. Unfortunately this is yet another step in the Government's sorry saga of retrospectivity.
Just as we have done with these Bills, The Tax Institute will continue to argue for the best outcome for the tax system as a whole. We look forward to members' ongoing support.
Robert Jeremenko CTA