9 June 2009 - 14 September 2010
New Rules to Improve Calculation
of Income Tax Liabilities from Consolidated Groups
The Rudd Government will amend income tax law to improve the operation of rules relating to the calculation and collection of income tax liabilities from consolidated groups and multiple entry consolidated groups (MEC groups).
The Assistant Treasurer, Senator Nick Sherry, said the measure will allow an entity in a tax sharing agreement to leave a consolidated group or MEC group clear of any future income tax liabilities relating to the group.
For consolidated groups and MEC groups, the changes will clarify that:
- Pay-As-You-Go (PAYG) liabilities can be recovered under the liability for payment rules in the income tax law, with effect from today; and
- an entity which pays its contribution amount under a tax sharing agreement can leave a group clear of any further liability, with effect from the 2004‑05 income year.
Additional changes for MEC groups will ensure that:
- the liability for payment rules apply to those groups, with effect from today; and
- where there is a change in the provisional head company during an income year, any PAYG instalments paid by the former provisional head company on behalf of the group are attributed to the group, with effect from 1 July 2002.
"These changes will overcome technical difficulties with the operation of the current law and will primarily ensure that the law is consistent with current practice," Senator Sherry said.
Initial consultation will be take place on the design of the amendments to implement these changes. Details will be released on the Treasury website at www.treasury.gov.au by the end of this month.
11 May 2010