Today, the Minister for Revenue and Financial Services, Kelly O’Dwyer, released the Treasury Laws Amendment (2017 Measure No. 9) Bill 2017: Consolidation along with an explanatory memorandum for public consultation.
The Bill aims to restore integrity to the tax consolidation rules, making sure they are operating as intended and providing appropriate tax outcomes.
The Bill contains six measures that address concerns raised in the Board of Taxation’s post-implementation review of the consolidation rules.
The measures are designed to remove anomalous tax outcomes that arise under the tax cost setting rules when an entity leaves or joins a tax consolidated group.
It includes measures to prevent a double benefit from arising in relation to deductible liabilities when an entity joins a consolidated group, ensure that deferred tax liabilities are disregarded and remove anomalies that arise when an entity holding securitised assets joins or leaves a consolidated group.
Further measures aim to prevent unintended benefits from arising when a foreign resident ceases to hold membership interests in a joining entity in certain circumstances, clarify the outcomes that arise when an entity holding financial arrangements leaves a consolidated group, and clarify the treatment of intra group liabilities when an entity leaves a consolidated group.
The government is accepting submissions until 6 October 2017.