Today the Government is releasing a number of Board of Taxation reports, as part of the national conversation on the future of the tax system.
These reports are an important input into the tax reform process. They will be carefully considered alongside the submissions we have received from all parts of the community in response to Re:Think, the tax discussion paper.
The Board’s report on the tax treatment of collective investment vehicles recommends tax changes that will enhance the ability of Australia’s funds management industry to export its expertise to flourishing markets in Asia and beyond. The Government has indicated that it will include a proposal to introduce a broader range of collective investment vehicles in the Options Paper to be released later this year.
The report on Division 7A includes a number of recommendations designed to ease the compliance burden associated with rules that govern distributions from private companies and to lower the cost of working capital for private businesses.
The Board’s report on thethin capitalisation arm’s length debt test provides a timely and valuable Australian perspective on issues around debt deductibility for multinational investors. The report recommends retention of the arm’s length debt test as it facilitates important investment in the services, resources and infrastructure sectors. The report also identifies reforms to simplify the administration of the regime.
The report on tax arrangements applying to permanent establishments explores options to reform Australia’s approach to the taxation of the business profits of permanent establishments and considers whether Australia should change its approach to negotiating its bilateral tax treaties.
The final report on the debt and equity tax rules builds on the recommendations contained in the accelerated reportwhich I released earlier this year. It identifies targeted legislative reforms and administrative improvements which will further reduce compliance costs and improve certainty.
The Government wishes to extend its thanks to the Board of Taxation and to the many members of the community who contributed to the reviews.
The Board of Taxation reports are available on the Board of Taxation website.