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What are the income tax implications of the carbon tax?


A package of Bills to implement the Commonwealth government's carbon pricing system or mechanism, as part of the government's climate change plan, has been introduced into the Commonwealth Parliament. The plan, if enacted, will have effect generally from 1 July 2012. Quite apart from the direct aspects of the system, the legislation makes extensive amendments to income tax laws. Clearly, the plan and the tax implications are vast; there is much legislation that tax practitioners will need to understand, and in a relatively short period of time. Although some of the income tax concepts are based on established rules (eg trading stock), many aspects of the income tax rules are unfamiliar due to the new aspects of the plan.

In this article, the author first presents a summary of the key aspects of the plan. The article then considers the proposed income tax impacts and some of the uncertain tax outcomes arising from the new rules.

Author profile

James Newnham
James Newnham, CTA is a Partner in DLA Piper's Tax Team with over 16 years' experience consulting to leading Australian companies and multinational groups. He provides practical direct tax advice with consideration to his clients specific business needs. James' tax structuring experience stems from advising on various transactions including mergers, demergers, capital restructures, IPOs, private equity acquisitions, share buy-backs, and cross-border expansions. He works with emerging and mature technology clients who have specific industry based tax issues. His areas of experience include drafting the tax aspects of legal documents, tax consolidation, international tax, capital gains tax, the debt/equity rules, debt forgiveness rules, and the employee share schemes. - Current at 09 May 2016
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